Woodrow Wilson history Panic of 1907

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					Panic of 1907                                                                                                                                                              4/13/09 1:55 PM

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  Oregon                 In the summer of 1907, the American economy was showing signs of weakness as a
  Washington             number of business and Wall Street brokerages went bankrupt. In October, the
                         respected Knickerbocker Trust in New York City and the ¹Westinghouse Electric
                         Company both failed, touching off a series of events known as the Panic of 1907.
  Read and Post
  Comments               In the wake of the initial business collapses, stock market prices plummeted and
                         depositors made a massive run on the nation’s banks. The U.S. Treasury pumped
                         millions of dollars into weak banks in the hope of saving them, but the string of
                         collapsed institutions lengthened.                                                                           Ads by Google

                         In a reprise of his role during the second Cleveland administration when the gold     Top 10 Most Viewed Pages
                         standard was under assault, J.P. Morgan acted to restore order. He summoned the
                         leading bankers and financial experts to his home where they set up shop in his       1. The Progressive Movement
                         library. Over the course of the next three weeks, Morgan and his associates labored
                         to channel money from the strong institutions to the weaker ones in an effort to keep 2. Eastern Woodland Culture
                         them afloat.
                                                                                                               3. First Continental Congress
                         The joint effort of the government and the business leaders improved conditions
                         markedly over the course of several weeks. While the crisis passed, the finger-       4. Roaring Twenties
                         pointing began. Reform elements of both political parties believed that the American
                         banking system was fundamentally flawed and needed wholesale change. Business         5. Quartering Act
                         leaders, however, held that Roosevelt's progressive legislation had upset the natural
                         order of the economy and the government should stop its meddling.                     6. Historical Eras

                         Following the Panic of 1907, the reform elements gradually gained the upper hand.                      7. Stamp Act
                         An emerging consensus affirmed that thorough bank reform was necessary to
                         provide badly needed currency elasticity (a major issue in the Panic) and the general                  8. Proclamation of 1763
                         soundness of the banking system. Congress responded by passing stop-gap
                                                                                                                                9. Jacques Cartier
                         legislation, the Aldrich-Vreeland Act (1908), until more thorough actions could be
                                                                                                                                10. The Temperance Movement
                         With the passing of the Owen-Glass Federal Reserve Act of 1913, the Federal
                         Reserve System was created. The "Fed" was designed to be flexible and responsive
                         to the economy and independent of politics. The Fed has evolved through the years
                         by implementing many strict checks and balances. New departments, the General
                         Accounting Office, GAO, and the Office of Management & Budget, OMB, were
                         created to audit the Fed and most other government departments. As a result, the
                         American economy, and American society are more stable.

                         See other Theodore Roosevelt domestic activity.

                         1: Westinghouse Electric was the victim of foul business practices by J.P. Morgan. Morgan controlled
                         General Electric and Thomas Edison’s Direct Current, (DC) electrical patents. He contended with
                         Westinghouse Electric, who controlled Nicola Tesla’s Alternating Current, (AC) electrical patents.
                         Morgan and Edison strove for control of all electrical power in America. Edison used deceptive
                         demonstrations of the supposed increased dangers of AC and Morgan had spread rumors in Wall Street
                         that Westinghouse was insolvent, causing Westinghouse stock to collapse, along with the stock of the
                         Westinghouse backers.                                                                                                                                      Page 1 of 2
Panic of 1907                                                                                                 4/13/09 1:55 PM

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