DECEMBER 23, 1913 – FEDERAL RESERVE ACT PASSES CONGRESS – CREATING FEDERAL RESERVE SYSTEM

1913 – FEDERAL RESERVE ACT PASSES CONGRESS – CREATING FEDERAL RESERVE SYSTEM
The Act created a largely corporate controlled national banking and currency system. It was a major coup for banking corporations through the establishment of a private central bank authorized to "monetize" government debt (i.e. to print their own money and exchange it for government securities or I.O.U.'s). The central banking system was composed of 12 regional private/corporate banks owned by participating commercial banks. All national banks were required to join the system. Banking corporations now controlled the issuance and circulation of our national currency. By controlling our national money faucet, they could create inflation and deflation. This corporate monopolization of our currency allowed for public regulation, but not control. It was now banking corporations, not the US government, that was in control of the national currency.