may 29, 1908 - Aldrich-Vreeland Act

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The panic of 1907 was brief but characterized by indictments of speculators, sharp drops in stock prices, and a run on the banks as people feared for their cash. One effect of the panic was a severe shortage of currency. This made the need for a more flexible money supply obvious to Wall Street and government. This analysis led to the Aldrich Vreeland Act, which authorized national banks to issue currency backed by various kinds of collateral in emergency situations. It was a significant step in a reform that led to the landmark Federal Reserve Act of 1913.

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