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History Of Central Banks Of America

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Abel Shiferaw Econ 201 Prof Emma Cummings 05/01/2015 History of Central banks in America Even though central banks can improve a nation’s economy and are beneficial to governments, the central banks of America had a very controversial history. Even before the establishment of the Federal Reserve, banks were used by the public just as we use them today. Bank notes were in use during this time and they were backed up by the guarantee that they can be traded for either gold or silver on demand. The history of central banking in America dates back to 1781 when the first bank of North America was chartered by the state of Pennsylvania with the help of Robert Morris. It was the first ban k in America’s history to receive deposits and issue its own banknotes. Four years later, two more banks were created that also issued their own bank notes: the bank of New York and the Massachusetts bank. (thismatter.com) Some were not very supportive of the formation of a central baking system because of England’s efforts to place the colonies under the control of the bank of England while others were strongly in favor of it. As stated in the articles of confederation, congress was given the power to print bills of credit and to establish a national bank similar to the bank of England but objections rose of “alarming foreign influence and fictitious credit” (Wikipedia.org) that hindered its ability to accomplish its intended role. On February 25 1791, following the bank of North America, the
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