The Federal Reserve--Whose Idea Was It Anyway?

Woodrow Wilson created the current central banking system of the United States by signing the Federal Reserve Act on December 23, 1913.  The Act created a Board of Governors to oversee twelve Federal Reserve Banks charged with controlling the cash flow in the United States and established a Federal Open Market Committee to oversee the buying and selling of government securities.  All national banks were required to join the Federal Reserve System, and other banks could join as they wished.  This important reform stabilized the nation's currency and financial systems, helping to control the cycle of economic panics, which periodically struck the country.
In this lesson, students will analyze primary source material as well as web resources to better understand the creation and structure of the Federal Reserve.  They will apply their knowledge to the interpretation of political cartoons and evaluate the effectiveness of the Federal Reserve at its inception and today. 

Essential Questions:

  • How does the government influence economic activity?
  • Does the Federal Reserve actually maintain a stable economy?

Through this Lesson the student will be able to:

  • Explain how the Federal Reserve regulates the money supply
  • •Summarize the reasons the Federal Reserve is considered a cause of the Great Depression
    •Identify the changes that occured after the Great Depression

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did you know?

Wilson was president throughout World War I. He attempted to keep America out of the war and even won reelection with the slogan "He kept us out of war." Nonetheless, after the sinking of the Lusitania, continued run-ins with German submarines, and the release of the Zimmerman Telegram, America became involved. with the Lusitania, the continued harassment of American ships by German submarines, and the release of the Zimmerman Telegram meant that America joined the allies in April, 1917.

Woodrow Wilson was President when the 19th amendment was ratified in 1920 giving women the right to vote.

Wilson piloted the ship that brought America onto the world stage. He made the first steps of leading us out of isolationism, violating Washington's tenet of avoiding foreign entanglements.

He led America during World War I. His fervent hope was for the US to join a League of Nations, the precursor to the United Nations.

A Woodrow Wilson Quote: "Life does not consist in thinking, it consists in acting."

A Woodrow Wilson Quote: "The Constitution was not made to fit us like a straitjacket. In its elasticity lies its chief greatness."

A Woodrow Wilson Quote: "I believe in democracy because it releases the energies of every human being."

The Seventeenth Amendment was formally adopted on May 31, 1913. Wilson had been president for almost three months at the time. The amendment provided for the direct election of senators. Prior to its adoption, Senators were chosen by state legislatures.

Wilson was the first president to receive a PhD which he got in Political Science from Johns Hopkins University. He had received his undergraduate degree from the College of New Jersey, renamed Princeton University in 1896.

Woodrow Wilson could not read during the first decade of his life. Though undiagnosed, he may have suffered from a learning disability

Woodrow Wilson was known as "Tommy" until his college years.

Woodrow Wilson during his boyhood, helped establish the "Lightfoot Baseball Club" with his friends. Wilson played second base and was an avid sport fan throughout his adult life.

Woodrow Wilson was the first president to attend the Major League Baseball Fall Classic. He saw the debut of a young 20 year old pitcher by the name of George Herman "Babe" Ruth.

Woodrow Wilson was a graduate of Princeton University and Johns Hopkins University and the only president to hold an earned doctoral degree.

Woodrow Wilson image is on the $100,000 bill although it is no longer in circulation