August 1988

The Federal Reserve System:
An Overview of Times and Events

External Economic and Political Environment

1900-1919
Financial Panic/1907
Congress appoints National Monetary Commission
(Aldrich Commission)/1908
Report of National Monetary Commission submitted to Congress/ January 1912
Democrats win control of Congress and administration, reject Aldrich plan in party platform/January 1912
World War I/1914-1918
War and postwar boom, farm prosperity/1915-1919

1920s
Postwar collapse of farm prices/1920
Farm depression throughout most of 1920s
Stock market crash/October 1929

1930s
Nearly 10,000 bank failures nationwide from 1930 to 1933
Bank Holiday-banks closed by government order/March 1933
U.S. ends domestic gold standard
(convertibility of dollar into gold)/1933
Bottom of Great Depression/1933
World War II starts in Europe/1939

1940s
U.S. enters World War I/1941
End of World War II/1945

1950s
Korean War 1950-53

1960s
Kennedy-Heller tax cut/1962
Market interest rates move above Regulation Q ceiling/1965-69
Special Drawing Rates introduced as international settlements medium

1970s
Vietnam War/Early '60s through 1973
Large federal deficits over time, along with rising inflation
and interest rates
U.S. removes silver-backed paper dollar and eliminates silver in coinage
U.S. closes gold window, ends international link between gold and
the dollar/1971
First oil price shock/1973
Wage and price controls employed in early '70s
Stagflation: inflation accelerates, economy slows and market interest rates rise/Mid to late '70s
Second oil price shock/1979-80

1980s
International bank debt crisis/1982 and later
Substantial increase in number of bank failures begins by mid '80s
Stock market crash/October 19, 1987

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