Exam 19: Financial Developments 1863–1914

According to Davis (1963),industrial firms need capital to expand,grow and develop.They will ?seek the most efficient means to finance this capital.In the U.S.during its period of industrialization,industrialists raised the resources needed to invest in capital accumulation by

Discuss the risks of using paper money to provide an adequate supply of money for the economy.Describe how a central bank,government regulation or coordinated actions by banks can help ?reduce these risks.

In 1912,the National Monetary Commission denounced the existing financial system of the U.S.and,in a report,detailed the levels at which it restricted domestic producers' abilities to function globally.

The report of the 1911 National Monetary Commission

Describe the concerns of private citizens over the ways in which local,state and federal governments,federally-chartered and state-chartered banks and the Bank of England attempted to maintain the stability of paper money at different times from 1700 to 1860.Chapter 12 complements Chapter 19?in providing information required to complete this essay.

The Greenbackers' demand to back the greenback issues with gold reserves was not practical in the late 1860s.

The National Banking System under the Bank Act of 1863 created a banking system comprised?of a mixture of

According to Hughes and Cain (2011),what did the Populists want?

During a banking crisis during the period of free banking,the unexpected surge in the demand for money in the form of specie would cause bankers to call in loans which would,in turn,squeeze credit,slow output and increase unemployment.

Today,financial intermediaries specialize in all of the following activities except

According to the Quantity Theory of Money,the excessive printing of currency (the issuance of greenbacks and national bank notes)generated the post-Civil War increases in

Explain why the Populists wanted the national banks to increase the stock of money by issuing greenbacks.Discuss their desire for inflation.

Borrowers rely on financial intermediaries to hold and find uses for their funds that promise a positive expected rate of return.

What is financial intermediation? Discuss how it contributes to economic growth.

Identify the entities that want inflation and explain why they want it.

The Federal Reserve Bank of 1914 permitted the Fed to compete with banks for profits.

What are demand deposits?

Banking failures result when

The Federal Reserve System began operating in 1914,finally

The "Crime of '73" did not stop the Federal Treasury from buying massive amounts of silver at above-market prices before 1900.