THE FEDERAL RESERVE SYSTEM ORIGINS, PURPOSE & FUNCTION 1950s EDUCATIONAL FILM 44154

The origins, purposes, and functions of the Federal Reserve System form the basis of this 1950 Encyclopedia Britannica Films, Inc., production. Made in collaboration with Columbia University Economics Professor James W. Angell, the black-and-white film opens with the narrator that a generation of Americans have grown taking the Federal Reserve System as much for granted as they do the US Postal Service. But there are also those who remember what life was like before the Fed. (The system was created in 1913 by the Federal Reserve Act in response to a 1907 financial crisis in which the New York Stock Exchange fell almost 50 percent from its peak the previous year. Panic occurred and there were numerous runs on banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy).

At the film’s opening, two men re-enact a common scene that would’ve occurred during the panic, as a local banker tells a grocery store owner that he would not be able to renew a promissory note and that it would be due in full. “I can’t lay my hands on $2,000,” the man pleads at mark 1:34, but to no avail. The banker then explains — with the assistance of graphics — how banks make their money by taking deposits and making loans and investments. A discussion of such fiduciary terms as portfolios, reserves, and liabilities follows, all of which are illustrated on the screen, as is a discussion of local banks and their relationship with correspondent banks.

“But if they can print bank notes, why are they short of money?” the businessman asks near mark 06:00. The answer, the banker explains, is that all of the notes possible against securities owned have already been printed. “Everyone’s scared. Nobody trusts anybody anymore.”

So what can be done? Perhaps a central reserve bank, the men wonder at mark 07:15. The narrator explains that Congress worked on developing the Federal Reserve System for five years, and by the time President Woodrow Wilson took office in March 1913, a preliminary draft of the legislation was ready. The film recreates a scene in which Wilson reviews the legislation along with Congressman Carter Glass, whose legislation created the Fed. “A bank called the Federal Reserve Bank,” he says at mark 09:19, “that will be in a very real sense a banker’s bank.” Additional graphics outline how local banks would do business with the Federal Reserve Bank, starting at mark 10:00. At mark 13:13, the narrator reads from the preamble of the legislation as the film shows “President Wilson” signing it into law.

“Today its main task is to promote stability in the country’s economy by using its influence to bring about increases or decreases in the country’s banking reserve,” it is explained beginning at mark 13:30. By 1929, the system had done well to curtail money shortages, until the Stock Market Crash and the Great Depression. During this period, a number of amendments to the Federal Reserve System were made through the Glass-Steagall Act of 1932, the Banking Act of 1933, the Securities Exchange Act of 1934, and the Banking Act of 1935, all of which are noted beginning at mark 16:42. The Federal Reserve System is applauded, starting at mark 20:50, with helping finance the United States’ involvement in World War II — as the film shows a number of quick cut battle scenes. “New times bring new problems, and we must always modify the Federal Reserve System to meet them,” the Glass character says as the film reaches its end.

We encourage viewers to add comments and, especially, to provide additional information about our videos by adding a comment! See something interesting? Tell people what it is and what they can see by writing something for example like: "01:00:12:00 -- President Roosevelt is seen meeting with Winston Churchill at the Quebec Conference."

[glocksnw]

THE BANKING CARTEL...THEY SHOULD BE KICKED OUT OF THE United States of America

[darkmath]

Priceless! People don't remember "the money panic of 1907". But boy do they remember -the money panic of 1929- The Great Depression, a panic the Federal Reserve System was created to prevent.
;-)

[anonymousAJ]

The real deal: the major east coast financial powers centered around JP Morgan and the Rockefellers were the dominant political forces of late 1800s/ early 1900s America. Both groups tried to cartellize and monopolize a wide range of industries. In the early 1900s the Morgans and Rockefellers agreed on a government cartel to control banking, standardizing rates of inflation so that more "sound" banks could not drive inflationary banks out of business through sounder practices which would gradually cause deposits to flee from the unsound to the sound banks (where would you keep your money?) However the Morgan group had the far stronger position and installed a Morgan man, Strong, as the head of the NY Fed, which pre-New Deal could run the Federal Reserve from New York. Morgan's deep ties to England and explicit and repeated cooperation with England's phony gold standard of the 1920s ultimately led to a world monetary crash and great Depression. Following this crash control of the Fed (and much of the world financial system) was moved to Washington DC but the Fed remains a bank-owned and operated institution. It is for some reason considered legal in this country for these bankers to buy distressed bank assets at overvalued rates and at public expense.

[david]

And everyone lived happily ever after and there was never a banking crisis ever again…

[TheWorldBelow]

Geezus that’s a lot of fancy jargon! This stuff must really work bcuz of the value of these highly intellectualized concepts! I could get a loan just by presenting these fabulous terms!

[chrispreston]

They can't loan other peoples money public law 73-10. They don't have any money invested themselves, that promissory note created the money. Even said so, and they charge interest on something you created.

[sahilhossian]

Lore of THE FEDERAL RESERVE SYSTEM ORIGINS, PURPOSE & FUNCTION 1950s EDUCATIONAL FILM 44154 momentum 100

[jlambc]

20:30- “The Federal Reserve shall not be subordinated to any OTHER government agency “

[burhan]

Why does the $2000 promissory note is being put under banks liabilities instead of asset?

[adelleroadto]

Oh no story of Jackly Island ? The evil is unreal .

[Cuffachick]

It's fun when you learn this ! I get a 10m home for about 30dollars

[andrewdr]

This video is so stupid. Banks can't lend depositors money

[QQQQ-QQQQR]

sounds cook a call in a set inviteskilling in a simple play of enter in a simple inframe to the simple the only in simple indecides a emuthy in a simple inset of one and two and into a sale tjhe sal.e wets over X into a O nd a AP a simple sale in states a open set of of old funds that are not saleing any in a bait to open tthe saling in a simple input of the simple cset the only simple set in simpleizes a single input in a set of open simple sal;es of old bounets the old sign in sakes old input shares the old put shares Equals A B CA A C in calls the open in a simple pay and the old simple pays an old emuunthhy and old sale of input tyhe only simple input into nthe simple one into a simple set a piont in a piont and into a simple piont of a simple time a simple A is a A into a old pale less ate pass cann cage ate O A and E the only dseryt in a number in a simple in set into the the simple set the E tyime in sets a old set into a new so everytime the sinlge set in paces a old input to the send and count of a sety in one into two three foour and five the set time in set theonly input into one the simple set input the old intpo a pld input in one the old in is C ain a B the time in one is two so the H in sales eight eight eihght and euight sets of noon names and only sales eight eight eight eigjht and eight set of one and sets of two the ony thi g that is only place inthe simple time of a only sale of curent placde of the the kimnd into the time of the only time of the only time of a ony is tnhe simple day of the cult is a sale in a poont of eat abnd tend and cost and simple and the only cvan not peal of orange so the day of old old old old old old old old old old old old old oild old old old old old old oirange can not be peal