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View Diary: Ten True Facts Guaranteed to Short-Circuit Republican Brains (197 comments)

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  •  Will we ever get over the Panic of 1907? (1+ / 0-)
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    Few people understand that the Federal Reserve was actually borne of the repercussions of the Panic of 1907.

    Our banking system was on the brink of failure. JP Morgan himself pledged his own money to help shore up the system and got other bankers to do the same.

    What a far cry from today's bankers than take rather than give.

    The Panic began with a failed attempt to corner the market of the United Copper Company. The banks involved in the scheme began failing including the Knickerbocker Trust company, one of New York's largest and then the dominos started tumbling.

    Yet ANOTHER scheme to borrow heavily using the stock of Tennessee Coal, Iron and RR Company threw the markets into a tailspin until JP Morgan took it over via US Steel and pumped it full of liquidity.

    The rollercoaster became a national calamity and put Roosevelt (Teddy) deeply in debt to Morgan for his actions. Though Teddy was anathema to monopolies, he was grateful for the economic stability.

    The US didn't really have a banking system. The next year Aldrich set out for his commission to create one, but it seems the origins of the Federal Reserve are lost in lots of myth.

    It is not a perfect system, and it could use some updating, but it is a GOOD system, and has helped keep our economy sound.

    What separates us, divides us, and diminishes the human spirit.

    by equern on Tue Sep 04, 2012 at 09:58:49 PM PDT

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