The Real Bills Views of the Founders of the Fed

23 Pages Posted: 31 Jul 2015

See all articles by Robert L. Hetzel

Robert L. Hetzel

Federal Reserve Banks - Federal Reserve Bank of Richmond

Date Written: 2014

Abstract

The founders of the Federal Reserve desired to end financial panics. In order to achieve this end, they created a decentralized collection of reserve depositories — the Federal Reserve banks. They also wanted to remove control of the financial system from Wall Street. At the time, policymakers understood financial panics as resulting from speculative excess, especially on Wall Street. These "real bills" views of financial panic originated in the 19th century American experience. They influenced monetary policy significantly until the post-World War II period.

Suggested Citation

Hetzel, Robert L., The Real Bills Views of the Founders of the Fed (2014). FRB RIchmond Economic Quarterly, vol. 100, no. 2, Second Quarter 2014, pp. 159-181, Available at SSRN: https://ssrn.com/abstract=2637456

Robert L. Hetzel (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

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