Explain how certain historical events have influenced the banking system and other financial institutions.
DefinitionExplanation should include historical events including the following:
- 1690-1776: Colonial Money and Banking
Shift from using European coins, barter, and commodity money to colonies minting coins and issuing paper money backed by land or precious metals; credit provided by merchants and individuals, not banks.
- 1791-1836: Early Central Banking
After War of Independence, controversial efforts to create a federal bank to provide credit to government and businesses, and to establish a national currency; First Bank of the United States (1791-1811) and Second Bank of the United States (1816-1836) were created, but each was not re-chartered.
- 1837-1863: Free Banking Era
American banking consisted of state-chartered banks without federal regulation (by 1860, an estimated 8,000 state banks issuing own notes); National Banking Act of 1863 ended Free Banking Era by establishing a national banking system and a uniform national currency backed by federal government bonds.
- 1873-1913: Financial Panics and the Creation of the Federal Reserve
Country still plagued by bank panics even after a national currency and banking system was established; Federal Reserve System created in 1913 as nation’s central bank to provide a flexible supply of currency to meet changing demand.
- 1929-1941: Great Depression
Longest and deepest economic downturn in U.S. history and a collapse of the banking system; banking reform established deposit insurance and created the FDIC and created the modern structure of the Federal Reserve’s monetary policymaking body.
- 1965-1982: Great Inflation
Persistently high inflation rates caused major U.S. economic disruption; reforms to the Federal Reserve made price stability an explicit national policy goal.
- 1982-2007: Great Moderation
Period of low, stable inflation and long economic expansion; financial system changes included consolidation in the banking industry and integration of financial services; technological advances in methods of payments.
- 2007-present: Great Recession and Aftermath
Significant economic downturn precipitated by severe financial crisis; subsequent wide-ranging financial reform (Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) aimed at increasing the stability of the financial system.
Related Standards of Learning
History and Social Science
The student will apply social science skills to understand early European colonization by
- evaluating the economic characteristics of the colonies;
- analyzing how social and political factors impacted the culture of the colonies; and
- explaining the impact of the development of indentured servitude and slavery in the colonies.
The student will apply social science skills to understand the issues and events leading to and during the Revolutionary Period by
- describing the results of the French and Indian War;
- evaluating how political ideas of the Enlightenment helped shape American politics;
- explaining how conflicting loyalties created political differences among the colonists concerning separation from Great Britain;
- analyzing the competing factors that led to colonial victory in the Revolutionary War; and
- evaluating how key principles in the Declaration of Independence grew in importance to become unifying ideas of American political philosophy.
The student will apply social science skills to understand the development of the American political system by
- examining founding documents to explore the development of American constitutional government, with emphasis on the significance of the Virginia Declaration of Rights and the Virginia Statute for Religious Freedom in the framing of the Bill of Rights;
- describing the major compromises necessary to produce the Constitution of the United States, with emphasis on the roles of James Madison and George Washington;
- assessing the arguments of Federalists and Anti-Federalists during the ratification debates in defense of the principles and issues that led to the development of political parties; and
- evaluating the impact of how John Marshall’s precedent-setting decisions that established the Supreme Court as an independent and equal branch of the national government.
The student will apply social science skills to understand major events in Virginia and United States history during the first half of the nineteenth century by
- explaining territorial expansion and its impact on the American Indians;
- describing the political results of territorial expansion;
- assessing the political and economic changes that occurred during this period, with emphasis on James Madison and the War of 1812;
- analyzing the social and cultural changes during the period, with emphasis on “the age of the common man” (Jacksonian Era);
- evaluating the cultural, economic, and political issues that divided the nation, including tariffs, slavery, the abolitionist and women’s suffrage movements, and the role of the states in the Union.;
- explaining how Manifest Destiny and President James K. Polk’s policies impacted the nation; and
- evaluating and explaining the multiple causes and compromises leading to the Civil War, including the role of the institution of slavery.
The student will apply social science skills to understand key events during the 1920s and 1930s by
- analyzing how popular culture evolved and challenged traditional values;
- assessing and explaining the economic causes and consequences of the stock market crash of 1929;
- explaining the causes of the Great Depression and its impact on the American people; and
- evaluating and explaining how Franklin D. Roosevelt’s New Deal measures addressed the Great Depression and expanded the government’s role in the economy.
The student will apply social science skills to understand World War II by
- analyzing the causes and events that led to American involvement in the war, including the Japanese attack on Pearl Harbor and the American response;
- describing and locating the major battles and key leaders of the European theater;
- describing and locating the major battles and key leaders of the Pacific theater;
- evaluating and explaining how the United States mobilized its economic and military resources, including the role of all-minority military units (the Tuskegee Airmen and Nisei regiments) and the contributions of media, minorities, and women to the war effort;
- analyzing the Holocaust (Hitler’s “final solution”), its impact on Jews and other groups, and the postwar trials of war criminals; and
- evaluating and explaining the treatment of prisoners of war and civilians by the Allied and Axis powers.
The student will apply social science skills to understand the United States’ foreign policy during the Cold War era by
- locating and explaining the political boundary changes, and the formation of the United Nations and the Marshall Plan;
- explaining the origins and early development of the Cold War and how it changed American foreign policy, with emphasis on the Truman Doctrine and the policy of containment of communism;
- analyzing the efforts of the United States to protect Western Europe, including the role of the North Atlantic Treaty Organization (NATO);
- analyzing the changing role of the United States in Asia, including Korea, Vietnam, and China;
- evaluating and explaining how policy changes impacted the United States’ relationships in Latin America;
- analyzing the domestic impact of the Cold War; and
- evaluating and explaining the factors that caused the collapse of communism in Europe and how it changed American foreign policy, including the role of Ronald Reagan.
The student will apply social science skills to understand the social, political, and cultural movements and changes in the United States during the second half of the twentieth century by
- explaining the factors that led to United States expansion;
- evaluating and explaining the impact of the Brown v. Board of Education decision, the roles of Thurgood Marshall and Oliver W. Hill, Sr., and how Virginia responded to the decision;
- explaining how the National Association for the Advancement of Colored People (NAACP), the 1963 March on Washington, the Civil Rights Act of 1964, the Voting Rights Act of 1965, and the Americans with Disabilities Act (ADA) had an impact on all Americans;
- analyzing changes in immigration policy and the impact of increased immigration;
- evaluating and explaining the foreign and domestic policies pursued by the American government after the Cold War;
- explaining how scientific and technological advances altered American lives; and
- evaluating and explaining the changes that occurred in American culture.
Other Related Standards
Economics and Personal Finance Standards of Learning
- describing the purpose, structure, and function of the Federal Reserve System;
- describing government’s role in stabilizing the economy;
- describing sources of government revenue; and
- explaining balanced budget, deficit, and national debt.
- comparing the types of financial institutions;
- examining how financial institutions affect personal financial planning;
- evaluating services and related costs associated with personal banking;
- differentiating among types of electronic monetary transactions;
- preparing all forms necessary for opening and maintaining a checking and a savings account;
- reconciling bank statements;
- comparing costs and benefits of online and traditional banking; and
- explaining how certain historical events have influenced the banking system and other financial institutions.