Explain why President Wilson proposed the establishment of the Federal Reserve System.
A: President Wilson proposed the establishment of the Federal Reserve System to restore public confidence in the banking system. The United States had not had a central bank since the 1830s. During the economic depressions that hit the country periodically after that time, hundreds of small banks collapsed, wiping out the life savings of many of their customers, who withdrew their trust. The Federal Reserve System, however, would force banks to keep a portion of their deposits in a regional reserve bank, which would provde a financial cushion against unanticipated losses.
1 answer
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