manu/mldr-zoomed-100char-total-queries-documents

chunk_id stringlengths 3 9	chunk stringlengths 1 100
9851_193	wing of the party; Brandeis agreed with Bryan. Wilson convinced them that because Federal Reserve
9851_194	notes were obligations of the government and because the president would appoint the members of the
9851_195	Federal Reserve Board, the plan fit their demands. However, Bryan soon became disillusioned with
9851_196	the system. In the November 1923 issue of "Hearst's Magazine" Bryan wrote that "The Federal Reserve
9851_197	Bank that should have been the farmer's greatest protection has become his greatest foe."
9851_198	Southerners and westerners learned from Wilson that the system was decentralized into 12 districts
9851_199	and surely would weaken New York and strengthen the hinterlands. Sen. Robert L. Owen of Oklahoma
9851_200	eventually relented to speak in favor of the bill, arguing that the nation's currency was already
9851_201	under too much control by New York elites, who he alleged had singlehandedly conspired to cause the
9851_202	1907 Panic.
9851_203	Large bankers thought the legislation gave the government too much control over markets and private
9851_204	business dealings. The New York Times called the Act the "Oklahoma idea, the Nebraska idea" –
9851_205	referring to Owen and Bryan's involvement.
9851_206	However, several Congressmen, including Owen, Lindbergh, La Follette, and Murdock claimed that the
9851_207	New York bankers feigned their disapproval of the bill in hopes of inducing Congress to pass it.
9851_208	The day before the bill was passed, Murdock told Congress:
9851_209	You allowed the special interests by pretended dissatisfaction with the measure to bring about a
9851_210	sham battle, and the sham battle was for the purpose of diverting you people from the real remedy,
9851_211	and they diverted you. The Wall Street bluff has worked.
9851_212	When Wilson signed the Federal Reserve Act on December 23, 1913, he said he felt grateful for
9851_213	having had a part "in completing a work ... of lasting benefit for the country," knowing that it
9851_214	took a great deal of compromise and expenditure of his own political capital to get it enacted.
9851_215	This was in keeping with the general plan of action he made in his First Inaugural Address on March
9851_216	4, 1913, in which he stated:
9851_217	We shall deal with our economic system as it is and as it may be modified, not as it might be if we
9851_218	had a clean sheet of paper to write upon; and step-by-step we shall make it what it should be, in
9851_219	the spirit of those who question their own wisdom and seek counsel and knowledge, not shallow
9851_220	self-satisfaction or the excitement of excursions we can not tell.
9851_221	While a system of 12 regional banks was designed so as not to give eastern bankers too much
9851_222	influence over the new bank, in practice, the Federal Reserve Bank of New York became "first among
9851_223	equals". The New York Fed, for example, is solely responsible for conducting open market
9851_224	operations, at the direction of the Federal Open Market Committee. Democratic Congressman Carter
9851_225	Glass sponsored and wrote the eventual legislation, and his home state capital of Richmond,
9851_226	Virginia, was made a district headquarters. Democratic Senator James A. Reed of Missouri obtained
9851_227	two districts for his state. However, the 1914 report of the Federal Reserve Organization
9851_228	Committee, which clearly laid out the rationale for their decisions on establishing Reserve Bank
9851_229	districts in 1914, showed that it was based almost entirely upon current correspondent banking
9851_230	relationships. To quell Elihu Root's objections to possible inflation, the passed bill included
9851_231	provisions that the bank must hold at least 40% of its outstanding loans in gold. (In later years,
9851_232	to stimulate short-term economic activity, Congress would amend the act to allow more discretion in
9851_233	the amount of gold that must be redeemed by the Bank.) Critics of the time (later joined by
9851_234	economist Milton Friedman) suggested that Glass's legislation was almost entirely based on the
9851_235	Aldrich Plan that had been derided as giving too much power to elite bankers. Glass denied copying
9851_236	Aldrich's plan. In 1922, he told Congress, "no greater misconception was ever projected in this
9851_237	Senate Chamber."
9851_238	Operations, 1915-1951
9851_239	Wilson named Warburg and other prominent experts to direct the new system, which began operations
9851_240	in 1915 and played a major role in financing the Allied and American war efforts. Warburg at first
9851_241	refused the appointment, citing America's opposition to a "Wall Street man", but when World War I
9851_242	broke out he accepted. He was the only appointee asked to appear before the Senate, whose members
9851_243	questioned him about his interests in the central bank and his ties to Kuhn, Loeb, & Co.'s "money
9851_244	trusts".
9851_245	Accord of 1951 between the Federal Reserve and the Treasury Department
9851_246	The 1951 Accord, also known simply as the Accord, was an agreement between the U.S. Department of
9851_247	the Treasury and the Federal Reserve that restored independence to the Fed.
9851_248	During World War II, the Federal Reserve pledged to keep the interest rate on Treasury bills fixed
9851_249	at 0.375 percent. It continued to support government borrowing after the war ended, despite the
9851_250	fact that the Consumer Price Index rose 14% in 1947 and 8% in 1948, and the economy was in
9851_251	recession. President Harry S. Truman in 1948 replaced the then-Chairman of the Federal Reserve
9851_252	Marriner Eccles with Thomas B. McCabe for opposing this policy, although Eccles's term on the board
9851_253	continued for three more years. The reluctance of the Federal Reserve to continue monetizing the
9851_254	deficit became so great that, in 1951, President Truman invited the entire Federal Open Market
9851_255	Committee to the White House to resolve their differences. Eccles's memoir, Beckoning Frontiers,
9851_256	presents a detailed eyewitness account of this meeting and surrounding events, including verbatim
9851_257	transcripts of pertinent documents. William McChesney Martin, then Assistant Secretary of the
9851_258	Treasury, was the principal mediator. Three weeks later, he was named Chairman of the Federal
9851_259	Reserve, replacing McCabe.
9851_260	Post Bretton-Woods era
9851_261	In July 1979, President Jimmy Carter nominated Paul Volcker as Chairman of the Federal Reserve
9851_262	Board amid roaring inflation. Volcker tightened the money supply, and by 1986 inflation had fallen
9851_263	sharply. In October 1979 the Federal Reserve announced a policy of "targeting" money aggregates and
9851_264	bank reserves in its struggle with double-digit inflation.
9851_265	In January 1987, with retail inflation at only 1%, the Federal Reserve announced it was no longer
9851_266	going to use money-supply aggregates, such as M2, as guidelines for controlling inflation, even
9851_267	though this method had been in use from 1979, apparently with great success. Before 1980, interest
9851_268	rates were used as guidelines; inflation was severe. The Fed complained that the aggregates were
9851_269	confusing. Volcker was chairman until August 1987, whereupon Alan Greenspan assumed the mantle,
9851_270	seven months after monetary aggregate policy had changed.
9851_271	2001 recession to present
9851_272	From early 2001 to mid-2003 the Federal Reserve lowered its interest rates 13 times, from 6.25% to
9851_273	1.00%, to fight recession. In November 2002, rates were cut to 1.75%, and many rates went below the
9851_274	inflation rate. On June 25, 2003, the federal funds rate was lowered to 1.00%, its lowest nominal
9851_275	rate since July 1958, when the overnight rate averaged 0.68%. Starting at the end of June 2004, the
9851_276	Federal Reserve System raised the target interest rate then continued to do so 17 more times.
9851_277	In February 2006, President George W. Bush appointed Ben Bernanke as the chairman of the Federal
9851_278	Reserve.
9851_279	In March 2006, the Federal Reserve ceased to make public M3, because the costs of collecting this
9851_280	data outweighed the benefits. M3 includes all of M2 (which includes M1) plus large-denomination
9851_281	($100,000 +) time deposits, balances in institutional money funds, repurchase liabilities issued by
9851_282	depository institutions, and Eurodollars held by U.S. residents at foreign branches of U.S. banks
9851_283	as well as at all banks in the United Kingdom and Canada.
9851_284	2008 subprime mortgage crisis
9851_285	Due to a credit crunch caused by the subprime mortgage crisis in September 2007, the Federal
9851_286	Reserve began cutting the federal funds rate. The Fed cut rates by 0.25% after its December 11,
9851_287	2007, meeting, disappointing many investors who had expected a bigger cut; the Dow Jones Industrial
9851_288	Average dropped nearly 300 points that day. The Fed slashed the rate by 0.75% in an emergency
9851_289	action on January 22, 2008, to assist in reversing a significant market slide influenced by
9851_290	weakening international markets. The Dow Jones Industrial Average initially fell nearly 4% (465
9851_291	points) at the start of trading and then rebounded to a 1.06% (128-point) loss. On January 30,
9851_292	2008, eight days after the 0.75% decrease, the Fed lowered its rate again, this time by 0.50%.

9851_193

wing of the party; Brandeis agreed with Bryan. Wilson convinced them that because Federal Reserve

9851_194

notes were obligations of the government and because the president would appoint the members of the

9851_195

Federal Reserve Board, the plan fit their demands. However, Bryan soon became disillusioned with

9851_196

the system. In the November 1923 issue of "Hearst's Magazine" Bryan wrote that "The Federal Reserve

9851_197

Bank that should have been the farmer's greatest protection has become his greatest foe."

9851_198

Southerners and westerners learned from Wilson that the system was decentralized into 12 districts

9851_199

and surely would weaken New York and strengthen the hinterlands. Sen. Robert L. Owen of Oklahoma

9851_200

eventually relented to speak in favor of the bill, arguing that the nation's currency was already

9851_201

under too much control by New York elites, who he alleged had singlehandedly conspired to cause the

9851_202

1907 Panic.

9851_203

Large bankers thought the legislation gave the government too much control over markets and private

9851_204

business dealings. The New York Times called the Act the "Oklahoma idea, the Nebraska idea" –

9851_205

referring to Owen and Bryan's involvement.

9851_206

However, several Congressmen, including Owen, Lindbergh, La Follette, and Murdock claimed that the

9851_207

New York bankers feigned their disapproval of the bill in hopes of inducing Congress to pass it.

9851_208

The day before the bill was passed, Murdock told Congress:

9851_209

You allowed the special interests by pretended dissatisfaction with the measure to bring about a

9851_210

sham battle, and the sham battle was for the purpose of diverting you people from the real remedy,

9851_211

and they diverted you. The Wall Street bluff has worked.

9851_212

When Wilson signed the Federal Reserve Act on December 23, 1913, he said he felt grateful for

9851_213

having had a part "in completing a work ... of lasting benefit for the country," knowing that it

9851_214

took a great deal of compromise and expenditure of his own political capital to get it enacted.

9851_215

This was in keeping with the general plan of action he made in his First Inaugural Address on March

9851_216

4, 1913, in which he stated:

9851_217

We shall deal with our economic system as it is and as it may be modified, not as it might be if we

9851_218

had a clean sheet of paper to write upon; and step-by-step we shall make it what it should be, in

9851_219

the spirit of those who question their own wisdom and seek counsel and knowledge, not shallow

9851_220

self-satisfaction or the excitement of excursions we can not tell.

9851_221

While a system of 12 regional banks was designed so as not to give eastern bankers too much

9851_222

influence over the new bank, in practice, the Federal Reserve Bank of New York became "first among

9851_223

equals". The New York Fed, for example, is solely responsible for conducting open market

9851_224

operations, at the direction of the Federal Open Market Committee. Democratic Congressman Carter

9851_225

Glass sponsored and wrote the eventual legislation, and his home state capital of Richmond,

9851_226

Virginia, was made a district headquarters. Democratic Senator James A. Reed of Missouri obtained

9851_227

two districts for his state. However, the 1914 report of the Federal Reserve Organization

9851_228

Committee, which clearly laid out the rationale for their decisions on establishing Reserve Bank

9851_229

districts in 1914, showed that it was based almost entirely upon current correspondent banking

9851_230

relationships. To quell Elihu Root's objections to possible inflation, the passed bill included

9851_231

provisions that the bank must hold at least 40% of its outstanding loans in gold. (In later years,

9851_232

to stimulate short-term economic activity, Congress would amend the act to allow more discretion in

9851_233

the amount of gold that must be redeemed by the Bank.) Critics of the time (later joined by

9851_234

economist Milton Friedman) suggested that Glass's legislation was almost entirely based on the

9851_235

Aldrich Plan that had been derided as giving too much power to elite bankers. Glass denied copying

9851_236

Aldrich's plan. In 1922, he told Congress, "no greater misconception was ever projected in this

9851_237

Senate Chamber."

9851_238

Operations, 1915-1951

9851_239

Wilson named Warburg and other prominent experts to direct the new system, which began operations

9851_240

in 1915 and played a major role in financing the Allied and American war efforts. Warburg at first

9851_241

refused the appointment, citing America's opposition to a "Wall Street man", but when World War I

9851_242

broke out he accepted. He was the only appointee asked to appear before the Senate, whose members

9851_243

questioned him about his interests in the central bank and his ties to Kuhn, Loeb, & Co.'s "money

9851_244

trusts".

9851_245

Accord of 1951 between the Federal Reserve and the Treasury Department

9851_246

The 1951 Accord, also known simply as the Accord, was an agreement between the U.S. Department of

9851_247

the Treasury and the Federal Reserve that restored independence to the Fed.

9851_248

During World War II, the Federal Reserve pledged to keep the interest rate on Treasury bills fixed

9851_249

at 0.375 percent. It continued to support government borrowing after the war ended, despite the

9851_250

fact that the Consumer Price Index rose 14% in 1947 and 8% in 1948, and the economy was in

9851_251

recession. President Harry S. Truman in 1948 replaced the then-Chairman of the Federal Reserve

9851_252

Marriner Eccles with Thomas B. McCabe for opposing this policy, although Eccles's term on the board

9851_253

continued for three more years. The reluctance of the Federal Reserve to continue monetizing the

9851_254

deficit became so great that, in 1951, President Truman invited the entire Federal Open Market

9851_255

Committee to the White House to resolve their differences. Eccles's memoir, Beckoning Frontiers,

9851_256

presents a detailed eyewitness account of this meeting and surrounding events, including verbatim

9851_257

transcripts of pertinent documents. William McChesney Martin, then Assistant Secretary of the

9851_258

Treasury, was the principal mediator. Three weeks later, he was named Chairman of the Federal

9851_259

Reserve, replacing McCabe.

9851_260

Post Bretton-Woods era

9851_261

In July 1979, President Jimmy Carter nominated Paul Volcker as Chairman of the Federal Reserve

9851_262

Board amid roaring inflation. Volcker tightened the money supply, and by 1986 inflation had fallen

9851_263

sharply. In October 1979 the Federal Reserve announced a policy of "targeting" money aggregates and

9851_264

bank reserves in its struggle with double-digit inflation.

9851_265

In January 1987, with retail inflation at only 1%, the Federal Reserve announced it was no longer

9851_266

going to use money-supply aggregates, such as M2, as guidelines for controlling inflation, even

9851_267

though this method had been in use from 1979, apparently with great success. Before 1980, interest

9851_268

rates were used as guidelines; inflation was severe. The Fed complained that the aggregates were

9851_269

confusing. Volcker was chairman until August 1987, whereupon Alan Greenspan assumed the mantle,

9851_270

seven months after monetary aggregate policy had changed.

9851_271

2001 recession to present

9851_272

From early 2001 to mid-2003 the Federal Reserve lowered its interest rates 13 times, from 6.25% to

9851_273

1.00%, to fight recession. In November 2002, rates were cut to 1.75%, and many rates went below the

9851_274

inflation rate. On June 25, 2003, the federal funds rate was lowered to 1.00%, its lowest nominal

9851_275

rate since July 1958, when the overnight rate averaged 0.68%. Starting at the end of June 2004, the

9851_276

Federal Reserve System raised the target interest rate then continued to do so 17 more times.

9851_277

In February 2006, President George W. Bush appointed Ben Bernanke as the chairman of the Federal

9851_278

Reserve.

9851_279

In March 2006, the Federal Reserve ceased to make public M3, because the costs of collecting this

9851_280

data outweighed the benefits. M3 includes all of M2 (which includes M1) plus large-denomination

9851_281

($100,000 +) time deposits, balances in institutional money funds, repurchase liabilities issued by

9851_282

depository institutions, and Eurodollars held by U.S. residents at foreign branches of U.S. banks

9851_283

as well as at all banks in the United Kingdom and Canada.

9851_284

2008 subprime mortgage crisis

9851_285

Due to a credit crunch caused by the subprime mortgage crisis in September 2007, the Federal

9851_286

Reserve began cutting the federal funds rate. The Fed cut rates by 0.25% after its December 11,

9851_287

2007, meeting, disappointing many investors who had expected a bigger cut; the Dow Jones Industrial

9851_288

Average dropped nearly 300 points that day. The Fed slashed the rate by 0.75% in an emergency

9851_289

action on January 22, 2008, to assist in reversing a significant market slide influenced by

9851_290

weakening international markets. The Dow Jones Industrial Average initially fell nearly 4% (465

9851_291

points) at the start of trading and then rebounded to a 1.06% (128-point) loss. On January 30,

9851_292

2008, eight days after the 0.75% decrease, the Fed lowered its rate again, this time by 0.50%.