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The Real Bills Views of the Founders of the Fed

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  • Robert L. Hetzel

Abstract

The founders of the Federal Reserve desired to end financial panics. In order to achieve this end, they created a decentralized collection of reserve depositories ? the Federal Reserve banks. They also wanted to remove control of the financial system from Wall Street. At the time, policymakers understood financial panics as resulting from speculative excess, especially on Wall Street. These \\"real bills\\" views of financial panic originated in the 19th century American experience. They influenced monetary policy significantly until the post-World War II period.

Suggested Citation

  • Robert L. Hetzel, 2014. "The Real Bills Views of the Founders of the Fed," Economic Quarterly, Federal Reserve Bank of Richmond, issue 2Q, pages 159-181.
    • Handle: RePEc:fip:fedreq:00018
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    References listed on IDEAS

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    4. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, March.
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    6. Wood,John H., 2005. "A History of Central Banking in Great Britain and the United States," Cambridge Books, Cambridge University Press, number 9780521850131.
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