Economic Chronology

• 1641: Wampum (shells) made legal tender in Massachusetts (They were backed up by beaver pelts)
• 1642: Tobacco made legal tender in Virginia (it remained so for nearly two centuries)
• 1690: Massachusetts issued paper notes (first in America) Paper notes were later issued abundantly by Rhode Island, South Carolina, and Massachusetts; the middle colonies were more prudent with paper money issues.
• 1727: Tobacco certificates made legal tender in Virginia
• 1751: Parliament forbade issue of further paper money in New England
• 1764: Paper money ban extended to all of the colonies
• 1775-1779: Continental Congress orders 42 separate issues of paper currency; with a total face value of $242 million
• 1776: Declaration of Independence
• 1789: U.S. Constitution became effective; state governments explicitly prohibited from issuing paper money
• 1789-1797: 1. George Washington (F)
  
  • elected in 1788 and 1792
• 1789: First Secretary of the Treasury: Alexander Hamilton
• 1791: First Bank of United States created
• 1792: Coinage Act - dollar defined as 371.25 grains silver and 24.75 grains gold (mint ratio of 15 to 1)
  gold price: $17.68 per ounce; silver price $1.18
  bimetallic standard
  Free Coinage instituted -- anyone bringing specified amount of metal to mint could have the metal formed into coins
  The name "dollar" and the value of the coin was adapted from a Spanish coin, the "Spanish Dollar" which was circulated in the colonies. The term dollar derived from a silver German coin (thaler) first struck in 1518
• late 1790s - early 1800s: market ratio of gold price to silver price above 15 to 1 -- meaning only silver brought to mint (gold is relatively more valuable on the market than it is at the mint)
• 1797-1801: 2. John Adams (F)
  
  • elected in 1796
• 1801-1809: 3. Thomas Jefferson (DR)
  
  • elected in 1800 and 1804
• 1809-1817: 4. James Madison (DR)
  
  • elected in 1808 and 1812
• 1811: charter of First Bank of United States expires and is not renewed
• 1816: Second Bank of United States is created
• 1817-1825: 5. James Monroe (DR)
  
  • elected in 1816 and 1820
• 1819: Panic of 1819
• 1825-1829: 6. John Quincy Adams
  
  • elected in 1824
    
  • son of 2nd president
• 1829-1837: 7. Andrew Jackson (D)
  
  • elected in 1828 and 1832
• 1834: dollar devalued in terms of gold - now dollar defined as 23.2 grains of gold (mint ratio between gold price and silver price now 16 to 1) gold price: $18.86 per ounce now - gold is relatively more valuable at mint than on the market, so only gold is delivered to the mint
• 1836: charter of Second Bank of United States expires; Congress passes bill to renew charter but President Jackson vetoes it
• 1836: Federal government requires that public lands be paid for with hard money
• 1837: Panic of 1837
• 1837-1841: 8. Martin van Buren (D)
  
  • elected in 1836
• 1841: 9. William Henry Harrison (W)
  
  • elected in 1840
  • died after one month in office
• 1841-1845: 10. John Tyler (W)
  
  • elected Vice President in 1840
• 1840s-1850s: estimated 7,000 different bank notes in circulation
• 1845-1849: 11. James K. Polk (D)
  
  • elected in 1844
• 1849: 12. Zachary Taylor (W)
  
• 1849-1853: 13. Millard Fillmore (W)
  
  • elected Vice President in 1848
• 1853-1857: 14. Franklin Pierce (D)
  
  • elected in 1852
• 1853: end of full silver weight and free coinage of fractional coins (silver dollar unchanged)
• 1857-1861: 15. James Buchanan (D)
  
  • elected in 1856
• 1857: Panic of 1857
• 1859: Nevada Comstock Lode discovered -- begin new trend of silver price declining relative to gold price
• 1861-1865: 16. Abraham Lincoln (R)
  
  • elected in 1860 and 1864
  • assassinated April 14, 1865
• 1861-1865: Civil War
• 1862: U.S. begins issuing greenbacks (paper money not backed by precious metals) to help pay for war;
  more than 450 million dollars is issued
• 1863: National Banking Act
  • tax on notes issued by state banks (effectively eliminating them)
  • National banks allowed to issue notes provided that they are backed up with government bonds
• 1865-1869: 17. Andrew Johnson
  
  • elected Vice President in 1864
• 1869-1877: 18. Ulysses S. Grant (R)
  
  • elected in 1868 and 1872
• 1870: Supreme Court rules that the issue of greenbacks was unconstitutional (Salmon Chase, who had been Secretary of the Treasury at the time the first greenbacks were issued, was now Chief Justice and delivered the opinion)(Hepburn v. Griswold)
• 1871: Supreme Court rules that greenbacks were constitutional (reversing decision of 1870)(Knox v. Lee and Parker v. Davis)
• 1873: Panic of 1873
• 1873: free coinage of silver is ended (note that silver had not been delivered to mint in forty years because market price of silver relative to gold had been higher than the official mint price) This step was taken without significant opposition. As a result of this act, the dollar was now defined exclusively in terms of gold (gold standard)
• 1874: greenback party formed, in favor of expanded currency and opposed to resumption of gold payments in exchange for greenbacks (elected 14 members of Congress in 1878)
• 1877-1881: 19. Rutherford B. Hayes (R)
  
  • elected in 1876
• mid 1870s: accelerating development of Nevada silver mines leads to increased supply and causes the market price of silver to fall, meaning that silver would have been more valuable at the mint than on the market if the bimetallic standard had still been in effect. As a result, free silver movement develops, calling for resumption of free coinage of silver
• 1878: Bland-Allison Act requires limited Treasury department purchases of silver, using silver certificates
• 1879: Resumption of Gold payments (currency could be exchanged for gold on demand)
• 1881: 20. James A. Garfield (R)
  
  • assassinated in 1881
• 1881-1885: 21. Chester A. Arthur (R)
  
  • elected Vice President in 1880
• 1884: Panic of 1884
• 1885-1889: 22. Grover Cleveland (D)
  
  • elected in 1884 and 1892; only president to serve two non-consecutive terms
• 1889-1893: 23. Benjamin Harrison (R)
  
  • elected in 1888
• 1890: Panic of 1890
• 1890: Sherman Silver Purchase Act requires more rapid purchases of silver with treasury notes (would have been equivalent to free coinage of silver if it had been left in effect)
• 1893-1897: 24. Grover Cleveland (D)
• 1893: Panic of 1893
• 1893: Sherman Silver Purchase Act repealed
• 1896: "Cross of Gold" speech delivered by William Jennings Bryan, Democratic Nominee for President, supporting free coinage of silver (Bryan lost Presidential elections in 1896, 1900, and 1908).
• 1897-1901: 25. William McKinley (R)
  
  • elected in 1896 and 1900; assassinated in 1901
• 1901-1909: 26. Theodore Roosevelt (R)
  
  • elected Vice President in 1900; elected President in 1904
• 1907: Major panic; National Monetary Commission established - its recommendations lead to establishment of Federal Reserve
• 1909-1913: 27. William Howard Taft (R)
  
  • elected in 1908
• 1913-1921: 28. Woodrow Wilson (D)
  
  • elected in 1912 and 1916
• 1914: Federal Reserve System begins operations
• 1919: John Maynard Keynes publishes The Economic Consequences of the Peace, which predicts the settlement of World War I will have ruinous consequences for Germany
• 1921-1923: 29. Warren G. Harding (R)
  
  • elected in 1920; died in office
• 1923-1929: 30. Calvin Coolidge (R)
  
  • elected Vice President in 1920; elected President in 1924
• 1920s: rampant inflation hits Germany as the government prints paper money to pay the reparations ordered after World War I. The price level is estimated to have increased one trillion times
• 1929-1933: 31. Herbert Hoover (R)
  
  • elected in 1928
• 1929: Stock Market Crash; wave of bank failures begins; the Great Depression begins which lasts all during the 1930s; unemployment reaches as high as 25 percent
• 1933-1945: 32. Franklin Roosevelt (D)
  
  • elected in 1932, 1936, 1940, and 1944
    
  • died April 12, 1945
• 1933: Bank Holiday declared March 6 (after inauguration of Franklin Roosevelt)
• 1933: Glass-Steagall Act: establish FDIC (deposit insurance) prohibit payment of interest on demand deposits
• 1933: price of gold raised to $35 per ounce; U.S. citizens forbidden to hold gold except for ornamental purposes
• 1936: John Maynard Keynes publishes The General Theory of Employment, Interest, and Money
• 1945-1953: 33. Harry S Truman (D)
  
  • elected Vice President in 1944; elected President in 1948
• 1946: Bretton Woods conference; establish system of fixed exchange rates
• 1951-1970: William McChesney Martin serves as Federal Reserve chairman
• 1953-1961: 34. Dwight Eisenhower (R)
  
  • elected in 1952 and 1956
    
  • Vice President: Richard Nixon
• 1961-1963: 35. John Kennedy (D)
  
  • 1960: defeated Richard Nixon, 50.1% to 49.9%
    
  • assassinated November 22, 1963
• 1963-1969: 36. Lyndon Johnson (D)
  
  • elected Vice President in 1960
    
  • 1964: defeated Barry Goldwater, 61.3% to 38.7%
    
  • Vice President: Hubert Humphrey
    
  • chose not to run for re-election in 1968
• 1969-1974: 37. Richard Nixon (R)
  
  • 1968: defeated Hubert Humphrey, 43.6% to 42.9% (George Wallace: 13.5%)
    
  • 1972: defeated George McGovern, 61.8% to 38.2%
    
  • Vice Presidents: Spiro Agnew, 1969-1973; Gerald Ford 1973-1974
    
  • resigned August 9, 1974
• 1970-1978: Arthur Burns serves as Federal Reserve chairman -->
• 1971: U.S. gold stock falls to $10 billion; U.S. devalues dollar by raising price of gold to $38 per ounce; U.S. stops converting dollars into gold
• 1973: U.S. raises official price of gold raised to $42.22 per ounce
• 1973: Floating exchange rates come into effect; end of Bretton Woods system
• 1974-1977: 38. Gerald Ford (R)
  
  • (appointed to Vice Presidency by Richard Nixon, according to 25th amendment)
    
  • Vice President: Nelson Rockefeller
• 1975: end of prohibition against U.S. citizens holding gold
• 1977-1981: 39. Jimmy Carter (D)
  
  • 1976: defeated Gerald Ford, 51.1% to 48.9%
    
  • Vice President: Walter Mondale
• 1977: Community Reinvestment Act prohibits discriminatory lending practices
• 1970s: period of high inflation (especially 1974 and 1979)
• 1978-1979: G. William Miller serves as Federal Reserve chairman
• 1979: Paul Volcker appointed Federal Reserve chairman; announces new Federal Reserve policy in October; more control will be exerted over monetary growth in an effort to slow inflation. By 1982, inflation slows to approx. 4% and remains steady throughout 1980s; this contractionary policy also contributes to 1982 recession
• 1980: market price of gold rises above $800 per ounce
• 1980: Depository Institutions Deregulation and Monetary Control Act (DIDMCA) passed; phase-out of interest rate ceilings on deposits begins; all depositary institutions required to meet reserve requirements
• 1981-1989: 40. Ronald Reagan (R)
  
  • 1980: defeated Jimmy Carter, 51.6% to 41.7%; (John Anderson 6.7%)
    
  • 1984: defeated Walter Mondale, 59.2% to 40.8%
    
  • Vice President: George Bush
• 1982: Garn-St. Germain act passed, providing further decontrol
• 1982: recession; unemployment rises above 10 percent
• 1987: Alan Greenspan appointed Federal Reserve chairman
• 1987: stock market crash
• 1988: Basel accord: establishment of international standards for minimum capitalization for banks
• 1989-1993: 41. George Bush (R)
  
  • 1988: defeated Michael Dukakis, 53.9% to 46.1%
    
  • Vice President: Dan Quayle
• 1989: Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) passed, providing more than $100 billion to liquidate or reorganize insolvent savings and loan assocations
• 1991: Federal Deposit Insurance Corporation Improvement Act (FDICIA) established risk-based insurance premiums; ended "too big to fail" policy; established new capital requirements; insured state banks.
• 1993-2001: 42. Bill Clinton (D)
  
  • 1992: defeated George Bush, 43.2% to 37.7%; (H. Ross Perot 19.0%)
    
  • 1996: defeated Bob Dole, 49.9% to 41.4%; (H. Ross Perot 8.6%)
    
  • Vice President: Al Gore
• 1994: Interstate Banking and Branching Efficiency Act (allows nationwide banking)
• 1999: Gramm-Leach-Bliley Act: repeals the Glass-Steagall act provision that required commercial banks and investment banks to be separate
• 2001-2009: 43. George W. Bush (R)
  
  • 2000: electoral vote: Bush 271, Gore 267; popular vote: Gore 48.32%, Bush 47.99%
    
  • 2004: defeated John Kerry, 51.1% to 48.6%
    
  • son of 41st president
    
  • Vice President: Dick Cheney
• 2006: Ben Bernanke appointed Federal Reserve chairman
• 2007: house price bubble begins to burst;
  growing problem with defaults on sub-prime mortgages and mortgage-backed secuities
• 2008:
  
  • March: mini-bailout of investment bank Bear Stearns
    
  • September: failure of investment bank Lehman Brothers / enters bankruptcy
    
  • --Fannie Mae and Freddie Mac on brink of failure; put under government conservatorship
    
  • --Washington Mutual fails; acquired by Morgan Chase (largest bank failure in history)
    
  • October: Congress passes Emergency Economic Stabilization Act of 2008;
    ---law provides for $700 billion for TARP (Troubled Asset Relief Program)
• 2009-2017: 44. Barack Obama (D)
  • 2008: defeated John McCain, 52% to 46%
  • 2012: defeated Mitt Romney, 50.6% to 47.8%
  • Vice President: Joe Biden
• 2009: Credit Card Accountability, Responsibility, and Disclosure (CARD) Act passed
• 2010: Dodd-Frank regulation act passed
• 2014: Janet Yellen appointed Federal Reserve chair
• 2017-2021: 45. Donald Trump (R)
  • 2016: electoral vote: Trump 306, Hillary Clinton 232;
    popular vote: Clinton 47.8%, Trump 47.2%
    
  • Vice President: Mike Pence
• 2018: Jerome Powell appointed Federal Reserve chair
• 2021--: 46. Joe Biden (D)
  • 2020: defeated Donald Trump, 51.4% to 46.9%
  • Vice President: Kamala Harris