Slightly over 100 years ago, a law that has come to define the United States financial system was passed. In 1913, President Woodrow Wilson signed into law the Federal Reserve Act.
Essentially, this act created the Federal Reserve System and had it serve as the central bank of the United States. It ensured that the banking system was composed of both private and public organizations. Additionally, it allowed for the creation of the physical money that sits in your wallet.
Now, in 2015, a Wesleyan student has created a movement to repeal that very same Federal Reserve Act. Drew Krinitsky ’17 circulated a petition and put together an event on Friday, Oct. 30 from 12 p.m. to 3:15 p.m. in front of the Public Affairs Center (PAC). He distributed information, talked to students, and attempted to get more signatures on his petition, which is not connected to any student group on campus.
“Many reforms addressing the entanglement of the Federal Reserve and private banks have been passed in the last five years,” Krinitsky wrote in an email to The Argus. “The petition to repeal the Federal Reserve Act of 1913 is meant to let our representatives in Congress know that there are Wesleyan students that wish to continue reforming the Federal Reserve to increase transparency in monetary policy even further.”
Krinitsky was inspired by the critical views on banks from various presidential candidates, and his cause stems from a desire to hold the central banking authority accountable.
“I believe we need to repeal this act so that the central banking authority is held to the same checks and balances that we hold our government to,” Krinitsky wrote. “This may not be feasible, but calling for the repeal of the Fed will facilitate the conversation on retaining and expanding the key transparency improvements ushered in by the Dodd-Frank Act.”
Amelie Clemot ’18 further spoke to the benefits of the petition.
“I support the petition because I believe that the first step to start a conversation about power of private banking is through Fed transparency,” Clemot said.
So far, 82 students have signed Krinitsky’s petition; 50 of the signatures were collected at the event held on Friday. Krinitsky advertised the petition and the event through word of mouth and a Facebook event.
“Effort is everything,” Krinitsky wrote. “A petition with hand-written signatures proves that there was a lot of time and effort devoted to this cause.”
Drew Trotman ’18 was one of the petition signers. He said he gave his support both because he supports repealing the Federal Reserve Act and to show support for Krinitsky.
“Personally, I don’t think it is right for large banks to regulate [other] large banks,” Trotman wrote in an email to The Argus. “That’s just not logical. I am not an economics major, but I regularly read news articles such as BBC or The New York Times on finance. To put it shortly, wage gaps in large corporations are problematic.”
Trotman believes that though government power sometimes needs to be limited, banking is one area where more federal regulation is needed.
“The lack of regulation is one factor of the stock market crash,” Trotman wrote. “[It] results in small businesses suffering and large business and banks being bailed out. [It] allows them to continue functioning as if nothing happened. I’m not suggesting there is no regulation, I just feel there could be more federal checks on banks.”
Trotman did not spend much time trying to convince students with opposing perspectives.
“It’s something liberals and conservatives tend to be split on,” Trotman wrote. “I don’t think it is my job to educate conservatives on why they’re wrong; I can only provide evidence and allow them to figure it out. By signing [this] petition, I hope to help start a movement that will influence more federal regulation.”
However, some students believe that while this can be beneficial, there are issues with the petition that need to be addressed.
“This petition sounds like going after small fish in comparison to what privatized banking and the rampant ‘legalized gambling’ in the stock market is doing to the 99 percent,” said Austin Tamaddon ’16. “I am never against more regulation, but we must prioritize our causes when we have a handful of rich people operating in private infrastructure determining the futures of the outlying citizens in this country.”
While asking students to sign the petition, Krinitsky said he found that many responded by inquiring what the act was about. Many people simply did not know much about this topic.
“While the Federal Reserve may never become a completely public institution, calling for its repeal will initiate the conversation for its reform,” Krinitsky wrote. “I hope that by organizing this petition, more students on campus will think about the Federal Reserve, regardless of their stance on this issue.”