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Story of Money


Section 15: The Fed and afterwards Previous | Next | Section Index
The Great Depression and bank crisis in the 1930s led to reforms
The banking crisis of 1930–33 that followed the start of the Great Depression was the most severe in the nation’s history. Congress initiated measures to restore confidence in the banking system. It imposed restrictions on bank activities and chartered the Federal Deposit Insurance Corporation (FDIC) to insure deposit money. The government also withdrew gold from the circulating money supply. Finally, Congress centralized the Federal Reserve’s purchasing and selling of government securities to enable the system to have a more certain influence on banks’ reserves.

Photo courtesy of the Franklin D. Roosevelt Library Digital Archives
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