In 1993, a plan hatched by four former economics grad school students helped rescue Brazil from a fifty-year inflationary spiral after all other attempts had failed.

To celebrate its 175th anniversary, American Banker is featuring selected articles that describe important and interesting events in banking history.

William McChesney Martin Jr. (1906-98) was chairman of the Board of Governors of the Federal Reserve System from 1951 to 1970, serving under five U.S. presidents.

New York Fed Research Library

In the nineteenth century, convicts transported to New South Wales, Australia, were encouraged to deposit their money in one of the colony’s banks. But in 1822, they were forced to do so. Prisoners in private jails were also compelled to pay for their incarceration and were housed according to their ability to pay, with accommodations ranging from a private cell with a cleaning woman to one where the convict had to lie on the floor with no cover.

New York Fed Research Library

A recent Federal Reserve Bank of St. Louis essay by Richard Anderson reminds us that the Fed’s recent large-scale asset purchase (LSAP) programs have a precedent. Anderson says: “Few analysts recall . . . that this is the second, not the first, quantitative easing by U.S. monetary authorities. During 1932, with congressional support, the Fed purchased approximately $1 billion in Treasury securities.” After the Fed’s program ended in October 1933, the Roosevelt administration continued to expand reserves, using measures authorized by the Gold Reserve Act of 1934, including large gold purchases.

New York Fed Research Library

While money has taken all forms—precious commodities, beads, wampum, the large stones of Yap—we tend to think of those forms of money as archaic.

New York Fed Research Library

In its January 1953 issue “The American and His Economy,” Life magazine presents a sidebar entitled “How Future Looks to Five Economists,” in which Paul Samuelson, John Kenneth Galbraith, and other eminent economists discuss the national outlook, given the impending defense cutbacks. Samuelson states, “Congress and the new administration have the power to alleviate any recession that might be brought on by reduced defense and investment expenditures.” The others are also optimistic, citing additional offsetting factors. What’s missing? Except for one oblique reference to “credit easing,” no one mentions the Fed or monetary policy—even though economists knew then that expansionary monetary policy (that is, lowering interest rates) can help offset contractionary fiscal policy (such as government spending cuts).

New York Fed Research Library

The “South Sea Bubble” in Britain, 1720, followed the typical pattern of a period of speculation, “irrational exuberance,” and the subsequent collapse of a major company or industry. A speculative frenzy fueled by corporate deceit, investor hysteria, and other market forces caused the South Sea Company’s share price to skyrocket from £128 in January to a whopping £1,050 in June. By September, the price plummeted to £175.

New York Fed Research Library

“Lamar Pioneers in Space, the New Frontier” is the headline of an advertisement that appeared in the April 1985 issue of Texas Monthly magazine. The ad indicates that Texas-chartered savings and loan “Lamar Savings now is making plans for a full service branch on the moon.”

New York Fed Research Library

During the 1930s, major events were often announced by newsreels shown in movie theaters before feature films. This is how the Fed’s new headquarters made its film debut in 1937.