The Federal Reserve System

The Federal Reserve System Even before the conception of the Federal Reserve, banks were used by the public just as we use them today. Deposits were made into savings accounts. Loans were taken out to mortgage a home or finance a tardy business. Banknotes were issued and spent when the public borrowed from the banks. Borrowers spent these banknotes just as cover currency is spent today. These bank notes were valued as currency since they were backed by the promise that they would be exchanged on demand for either gold or notes.

There was the like a shot and then belief on behalf of the public that banks would not be able-bodied to, or outright refuse to honor their banknotes. This fear, if held by bountiful of a community, could lead to a run on the banks. In a single day, demands for exchange of banknotes for gold and silver would be made by a majority of the concourse if there was doubt concerning the ability of a bank to keep its notes. This worry wo...If you want to get a full essay, rewrite it on our website: OrderEssay.net

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