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Story of Money


Section 15: The Fed and afterwards Previous | Next | Section Index
The Fed System
Initially the Fed’s role was primarily to prevent bank panics by creating an “elastic” currency—largely through making “discount” loans to banks. The Fed was also to establish a nationwide network for transferring money by check and wire, to keep fit currency and coin in circulation, and to supervise state-chartered banks that joined the Federal Reserve System. However, many banks chose not to join the Fed.
  
Reproduction of the Federal Reserve Act
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