ipl-logo

The Glass-Steagall Act Analysis

688 Words3 Pages

An emergency legislative action that was taken to offset some of the detrimental economic factors during the Great Depression in 1933 as a result of the failure of around five thousand banks. The act was signed into law on June 16, 1933 by President Roosevelt. The two main purposes behind the legislation were to first, stop the run on banks and re-build confidence in people about the banking system again; and two, to demolish the link between investment and commercial banking, a factor that was largely thought to have contributed to the 1929 market crash. Therefore, the Glass-Steagall Act separated the two, commercial and investment banking and also prohibited these commercial banks from participating in any sort of investment business activities as well as stiffened the regulations on national banks overall. The legislation was developed by Senator Glass, former Treasury Secretary and Representative Steagall, chairman of the House Banking and Currency Committee. In addition to the previously mentioned purposed of this legislation, the two men also developed the creation of the Federal Deposit …show more content…

Therefore, interest in this remains strong in both party’s political agendas. Overall, Glass-Steagall as a whole once provided a large feeling of security for Americans in times of financial crisis and leveled some playing grounds, so to speak, which is understandable for its popularity gain in years since the 2008 economic crisis. Some argue a reinstatement of the Glass-Steagall could be detrimental to current economic growth and others feel it is necessary and will not be a hindrance, but rather a benefit to the American people and economy. The act has a strong history rooted in the benefit and protection of the people, so only time will tell what ground the idea gains from here on

Show More
Related
554 Words | 3 Pages

These banks issued Federal Reserve Notes. The Federal Reserve Act was mainly put into action because the government wanted more economic

Read More
259 Words | 2 Pages

In the era of 1837, was the starting point for the new establishment for banks all over the United State. In the beginning, banks were in the center of importing and exporting and funding paper bills (Foner 365). The banks funded businesses and other industry to trade, buy or sell opening the pathways to overseas. Thus, to a wider range of people who flavored western goods and in return helped western prospered. However, without a proper regulation and restriction of issuing out bills put a downfall in the economy, unbalance system that cause the Panic of 1837 (Foner 366).

Read More
449 Words | 2 Pages

The Great depression sent it affects all through the world. Though millions of Americans lost their jobs and homes. Soon “Hoovervilles” started to take over all over the country which were shacks of improvised housing for people who lost everything. When F.D.R came into office in 1932 he helped Americans and America start to recover with the passing of many laws and regulations . One change was the creating of the FDIC, which insured the peoples savings stayed in the bank.

Read More
1435 Words | 6 Pages

The Glass-Steagall Act of 1932 permitted the use of government securities to back Federal Reserve notes. It also separated personal and investment banking. During The Great Depression, many banks were involved in personal and investment banking. Investment banking is much riskier than personal banking so problems in the investment banking business effected the personal banking business. However, Glass-Steagall had much less impact than Hoover originally thought because it was too late.

Read More
728 Words | 3 Pages

This tragic event sent Wall Street into a complete frenzy and took out millions of investors. Over the next few years, consumer investment and spending decreased. This caused sharp declines in manufacturing production and rising levels of unemployment. By 1933, 13 plus million Americans were unemployed and nearly half of the country’s banks failed (Coker, 2005). Thanks to the reform and relief measures placed by President Franklin D. Roosevelt helped diminish the most horrible effects of the Great Depression.

Read More
450 Words | 2 Pages

During the 1930s, over 9,000 banks had failed, and people had lost their savings. In 1930, the government created the Smoot-Hawley Tariff, to protect American companies. The point of this was to charge a high tax for imports from foreign countries. Unfortunately, this led to less trade between America and foreign countries.

Read More
98 Words | 1 Pages

Hoover was not interested in the affliction caused by the Great Depression. In fact, people’s way of life started deteriorating as they had no support from the government. His inability to face national upcoming crisis was a mistake to the US economy and the way down to massive depression. Hoover marked into law the Smoot-Hawley Tariff Act, which prompted an emotional decrease in global exchange; and also consenting to impose increments on homes, organizations, and checks. His business profession, and individual convictions, made him ill-suited to giveaway effectively with a monetary calamity as desperate as the Great Depression.

Read More
1069 Words | 5 Pages

The Stock market Crash was one of the causes of the Great Depression. One cause of the Stock Market Crash was the stock exchange. This led thousands of Americans to invest in stocks and lose money. Many Americans borrowed money from the bank to buy stocks. Most of the time, people who lost money were unable to pay the banks back their debt; which caused banks to fail.

Read More
647 Words | 3 Pages

The Stock market crash of 1929 was one of the first reasons why the Great Depression began. The stock market crash lasted ten days where the value of stocks quickly dropped as investors sold off their stock in droves. Because the negative components from the Great Depression, President Franklin Roosevelt felt it was his job to cure America’s Great Depression. A small group of intelligent minds from leading American Universities, known as the Brain Trust, were hired by Roosevelt to come up with strategies to deal with the Great Depression crisis.

Read More
713 Words | 3 Pages

The transition between presidents Herbert Hoover and Franklin Roosevelt marked the transformation from a weak, to a strong form of government, which became directly involved in the lives of the people. This was primarily caused by the difference in the executive leaders ideologies, where Hoover was more focused on individual responsibility and capitalism, Roosevelt was more concerned with immediate action based on government intervention. Overall, the New Deal sacrificed the amount of personal responsibility that the people had with their own economic security. The power of the federal government was strengthened, but the long-lasting effects based on the social and economic policies was beneficial for the United States. Herbert Hoover began

Read More
1228 Words | 5 Pages

There were far too many independent banks during the period of the Great Depression, and the problem with the surplus of independent banks was the lack of support they could provide each other. The Run on the Banks resulted in the fall of banks, and an overall lack of confidence in the banking system. The overuse of credit in the economy helped trigger the run on the banks by people taking out loans from banks and then not being able to afford the continual payments, leading them to withdraw their money and shut down the banks. The Stock Market Crash was also a major factor in the start of the Great Depression. People who were buying into the stock market were gambling their money into the stock market in the hopes of making a quick profit (B).

Read More
1826 Words | 8 Pages

In contrast, supporters argue that protecting consumers and preventing another financial crisis was necessary. In this paper, I will analyze the reasons for the success of the Dodd-Frank

Read More
655 Words | 3 Pages

The Great Depression was a major turning point for the United States’s economy because it changed the relationship between the government and the economy. Before the Great Depression, the economy was a Laissez-faire style market where the government had no influence on private party transactions and businesses. After the Stock Market Crash of 1929, the people of the United States sought for reliefs from the government. The Government responded by creating tax reforms, benefiting the stock market, wheat prices, employment, and the number of bank suspensions, and providing comfort for the people. As a result of their disparity, the people put their trust in the government in hopes that they would repair the broken economy.

Read More
1863 Words | 8 Pages

The cause that lead to the Progressive era was the Gilded Age. Industrialization during the Gilded Age is what lead to urbanization and new ideas in the Progressive era. The Progressive era was a period of social activism and political reform across the United States during the 1890s-1920s. During this period, the Progressive movement was focused on eliminating corruption within the government. It covered social reform issues relating to female suffrage, education, working conditions, unionization, urbanization, industrialization and child labor.

Read More
750 Words | 3 Pages

And to cover up the expense the banks have to get the money from the interests they get on loans. The banks also gave loans to the stock market brokers and as the stock markets failed the bank couldn’t get the moneys back as a result they failed. And this bank failure along the stock market crash caused a great harm to the Us economy. During the mid 1920s the stock market went through

Read More

More about The Glass-Steagall Act Analysis

Related Topics

Open Document