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action. It was apparent that someone in power on the Board of 

Governors wanted the adoptance of acceptances.

The National Bank Act of 1864, which was the determining financial 

authority of the United States until November, 1914, did not permit 

banks to lend their credit. Consequently, the power of banks to create 

money was greatly limited. We did not have a bank of issue, that is, a 

central bank, which could create money. To get a central bank, the 

bankers caused money panic after money panic on the business 

people of the United States, by shipping gold out of the country, 

creating a money shortage, and then importing it back. After we got 

our central bank, the Federal Reserve System, there was no longer any 

need for a money panic, because the banks could create money. 

However, the panic as an instrument of power over the business and 

financial community was used again on two important occasions, in 

1920, causing the Agricultural Depression, because state banks and 

trust companies had refused to join the Federal Reserve System, and in 

1929, causing the Great Depression, which centralized nearly all power 

in this country in the hands of a few great trusts.

A trade acceptance is a draft drawn by the seller of goods on the 

purchaser, and accepted by the purchaser, with a time of expiration 

stamped upon it. The use of trade acceptances in the wholesale 

market supplies short-term, assured credit to carry goods in process of 

production, storage, transit, and marketing. It facilitates domestic and 

foreign commerce. Seemingly, then, the bankers who wished to 

replace the open-book account system with the trade acceptance 

system were progressive men who wished to help American import-