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Instruments of monetary policy have included short-term interest rates and bank reserves through the monetary base. [1]With the creation of the Bank of England in 1694, which acquired the responsibility to print notes and back them with gold, the idea of monetary policy as independent of executive action began to be established. [2]
The Specie Payment Resumption Act of January 14, 1875 was a law in the United States that restored the nation to the gold standard through the redemption of previously unbacked United States Notes [1] and reversed inflationary government policies promoted directly after the American Civil War.
The monetary policy of the United States is the set of policies which the Federal Reserve follows to achieve its twin objectives of high employment and stable inflation. [1] The US central bank, The Federal Reserve System, colloquially known as "The Fed", was created in 1913 by the Federal Reserve Act as the monetary authority of the United States.
From 1811 to 1816, the United States had no central bank at all, then the Second Bank of the United States 1816-1836, and after that another period without a central bank from 1837 to 1862. Monetary reform during the 19th century in the US largely focused on the goal of keeping the local money and criticism of the central bank.
A wildcat bank is broadly defined as one that prints more currency than it is capable of continuously redeeming in specie. A more specific definition, established by historian of economics Hugh Rockoff in the 1970s, applies the term to free banks whose notes were backed by overvalued securities – bonds which were valued at par by the state, but which had a market value below par. [2]
A History of Money and Banking in the United States is a 2002 book by economist Murray Rothbard, released posthumously based on his archived manuscripts. [1] The author traces inflations, banking panics, and money meltdowns from the Colonial Period through the mid-20th century.
The United States and the United Kingdom signed the Treaty of Ghent on December 24, 1814, ending the War of 1812. [4] The British government effectively relinquished its effort to impose mercantilist policies on the United States, preparing the way for the development of free trade and the opening of America's vast western frontier.
The United States government, on the other hand, still had limited taxation capabilities and so had an interest in the seigniorage potential of a national bank. In 1846, the Polk Administration created a United States Treasury system that moved public funds from private banks to Treasury branches to fund the Mexican–American War. However, the ...