The Federal Reserve Charter began on December 23, 1913. This charter was good for 100 years, ensuring the Federal Reserve’s control over the United States currency.Prior to centralized banking, each commercial bank issued their own notes. The first institution with responsibilities of a central bank in the U.S. was the First Bank of the United States, chartered in 1791 by Alexander Hamilton. Its charter was not renewed in 1811. In 1816, the Second Bank of the United States was chartered; its charter was not renewed in 1836, after it became the object of a major attack by president Andrew Jackson. From 1837 to 1862, in the Free Banking Era there was no formal central bank, and banks issued their own notes again. From 1862 to 1913, a system of national banks was instituted by the 1863 National Banking Act. The first printed notes were Series 1914. In 1928, cost-cutting measures were taken to reduce the note to the size it is today.Today, the Federal Reserve prints the legal tender for the United States. It controls inflation of that currency, its worth and how much of it is in circulation at any given time. The currency is not backed by gold, silver or any other precious metal. It is fractionally created from the debt of the United States government to the privately owned and controlled Federal Reserve Bank. Each note printed by the central bank is worth roughly $ 0.80 cents (depending on the fluctuating currency rate). The debt mounts up as the federal no0tes are printed because as each is worth less, the value is lessend as well.In the case, the debt cannot be repaid because the legal tender is never worth more than the debt.
Posted on: Thu, 01 Aug 2013 12:53:20 +0000
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