Banking+Industry

Banking Industry ntorrence/avolpe

Birth of Industry: Banking has been around since the beginning of time. Though, people did not use currency, but they traded essential items for survival. In 1883, most banks were private banks. They were small, and only for people who had money. Then, in 1891, First National Bank was established. First National Bank was different from private banks, it had prominent stockholders and a board of directors. The First National Bank was the only bank in the Midwest that had a gold currency. There were also other public banks like First National, like Farmer's Bank. Andrew W. Mellon had a large impact on the banking industry. He was born in Pittsburgh, Pennsylvania in 1855. He grew up to be a great banker with genius ideas. Mellon worked in the timber business with his brothers, and in 1874, the Mellon brothers and their father merged their companies. They became Thomas Mellon and Sons. Soon, Andrew became the sole owner. He was so successful that he founded the Union Trust Company of Pittsburgh and Union Savings Bank. What made Mellon so successful was that he invested in things he thought would prosper. He expanded his talents to fields like aluminum, oil, coal and coke. He kept up with new technologies and took over many companies because of his power. Though it's not said how much money Mellon made, he did leave to the American people, in his will, $25 million dollars in art- he was an avid collector. J.P. Morgan was a established fiancer and inherited the company formerly known as J.S. Morgan and Co. He bought troubled railroad businesses and made them successful. The way he bought and consolidated the railroads was soon known as Morganization. The largest interaction he was associated with was the US Steel Corporation. He bought mills from Andrew Carnegie and others to formed the first billion dollar corporation. Morgan's wealth was monumental. He had enough money to give the U.S. government at least $102 million dollars in bonds and loans. Morganization is the "monopolization techniques used by J.P. Morgan... Morgan "morganized" the railroad industry first, taking over small underfinanced companies. He then took over the steel, electricity and banking industries the same way. The solid, steady growth that resulted was successful in transforming the U.S. from a debtor nation to one that was able to lend money to others. " ([])
 * [[image:firstbankever width="230" height="179" align="right" caption="This is the first ever bank. It was located in Philadelphia and housed in Carpenter's Hall."]]When?
 * Founders

Federal Reserves Act was put into action in 1913 and is this here today. It helped stabilize the banking system, as well as making it more flexible and accessible. The Federal Reserves Act consist of: http://usgovinfo.about.com/library/weekly/aa081599.htm
 * Labor Relations[[image:fed_reserve.jpg width="162" height="222" align="right" caption="A newspaper about the Federal Reserves Act."]]
 * "Conducts America’s monetary policy.
 * Supervises and regulates banks and protects consumers’ credit rights.
 * Maintains the stability of America’s financial system
 * Provides financial services to the U.S. Government, the public, financial institutions, and foreign financial institutions."

The banking industry today is shaky. Currently, we are in a recession. Many people are out of work and the American dollar is low. The exchange rate for the American dollar to a Euro dollar is $1.47. Many large banking companies this year had to be bailed out by the government. One of this large companies is AIG, the American International Group Inc., which is widely known. The government feared a collapse which would severely hurt the financial system. Because of the recession, job are hard to find. According to the Bureau of Labor, in November 2009 the unemployment rate is 15.4 million people. This mean that less people are spending money, and because of this, the banking industry is taking a hit as well.
 * Banking Today

If the Federal Reserves Act hadn't been approved, what would the banking industry be like now? Better or worst?
 * Questions To Ponder

What was the problem with private banks?

What is the exchange rate for a Euro to an American dollar?

What influences did J.P. Morgan have on the banking industry? Can you think of any examples?

What year was the Federal Reserves Act put into action?

References: [] [] [] http://usgovinfo.about.com/library/weekly/aa081599.htm http://www.netstate.com/states/peop/people/ct_jpm.htm [] http://www.financial-inspiration.com/JP-Morgan-biography.html [] http://www.occ.treas.gov/exhibits/histor4.htm