Glass–Steagall Act of 1932
Encyclopedia
The first Glass–Steagall Act was a law enacted by the United States Congress
in 1932. It was the first time that currency (non-specie, paper currency etc.) was permitted to be allocated for the Federal Reserve System
. It was passed in February 1932 in an effort to stop deflation and expanded the Federal Reserve's ability to offer rediscount
s on more types of assets such as government bonds as well as commercial paper
.
The "Glass–Steagall Act" is not the official title of the law; it is a colloquialism that refers to its legislative sponsors, Carter Glass
, a US Senator from Virginia
and Henry B. Steagall
, the Congressman
from Alabama's 3rd congressional district
.
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
in 1932. It was the first time that currency (non-specie, paper currency etc.) was permitted to be allocated for the Federal Reserve System
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
. It was passed in February 1932 in an effort to stop deflation and expanded the Federal Reserve's ability to offer rediscount
Rediscount
Rediscount is a way of providing financing to a bank or other financial institution. Especially in the 19th century and early 20th century banks made loans to their customers by "discounting" the customer's note. The note is a paper document, in a specified form, where the borrower promises to...
s on more types of assets such as government bonds as well as commercial paper
Commercial paper
In the global money market, commercial paper is an unsecured promissory note with a fixed maturity of 1 to 270 days. Commercial Paper is a money-market security issued by large banks and corporations to get money to meet short term debt obligations , and is only backed by an issuing bank or...
.
The "Glass–Steagall Act" is not the official title of the law; it is a colloquialism that refers to its legislative sponsors, Carter Glass
Carter Glass
Carter Glass was a newspaper publisher and politician from Lynchburg, Virginia. He served many years in Congress as a member of the Democratic Party. As House co-sponsor, he played a central role in the development of the 1913 Glass-Owen Act that created the Federal Reserve System. Glass...
, a US Senator from Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
and Henry B. Steagall
Henry B. Steagall
Henry Bascom Steagall was a United States Representative from Alabama. He was chairman of the Committee on Banking and Currency and in 1933 co-sponsored the Glass–Steagall Act with Carter Glass, an act that introduced banking reforms and established the Federal Deposit Insurance Corporation ....
, the Congressman
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
from Alabama's 3rd congressional district
Alabama's 3rd congressional district
Alabama's 3rd congressional district is a U.S. congressional district in Alabama, which elects a representative to the United States House of Representatives. It encompasses Calhoun, Chambers, Cherokee, Clay, Cleburne, Lee, Macon, Randolph, Russell, Talladega, and Tallapoosa counties...
.