The First World War was an unprecedented catastrophe that killed millions and set the continent of Europe on the path to further calamity two decades later . But it did n’t derive out of nowhere . With the centennial of the outbreak of hostilities come up in 2014 , Erik Sass will be take care back at the lead - up to the war , when seemingly small-scale minute of friction accumulated until the position was ready to explode . He ’ll be covering those events 100 twelvemonth after they occurred . This is the 96th installment in the serial .
18 May 2025: France Sends Anti-German Ambassador to Russia, Federal Reserve Created
Aside from the strange curate , the most important task in the French diplomatic population was embassador to Russia . As shielder of the sacred Franco - Russian Alliance , the French minister to St. Petersburg was creditworthy for set ashore up the key pillar of French national security measure , which meant reassuring the Russians of French allegiance while courteously extracting more concrete guarantees from the Russians .
Theappointmentof Theophile Delcassé as ambassador to the court of the Tsar in February 1913 sent a clear message to friend and foe alike . A former extraneous minister and one of the main architect of the Franco - Russian Alliance , Delcassé was win over that France was on a hit course with Germany , lead Kaiser Wilhelm II to call him “ the most dangerous human beings for Germany in France . ” Before leave alone for Russia Delcassé told Maurice Paléologue ( top ) , the strange ministry ’s ( also ferociously “ anti - German ” ) political director : “ We are necessarily headed toward a large European conflict , and it will be France which will conduct the first setback … for make no mistake about it , Germany will attack us through Belgium … It is necessary , therefore , that the Russian ally be in such a province to be capable to establish a full - scale of measurement offensive in the shortest potential time … ”
Over the class of 1913 , Delcassé ( along with French commander - in - chief Joseph Joffre and President Raymond Poincaré ) firmed up the Russian alliance , resulting in a new military convention , sign in September 1913 , confirming and elaborating theirplansfor well-nigh - cooccurring attacks on Germany ; this included a personal promise from Tsar Nicholas II to invade East Prussia within 15 days of militarization ( M+15 ) in hopes of forcing the Germans to divert forces from their onrush on France .
But in the wintertime of 1913 Delcassé , complain of ill health ( and breast feeding political ambition back home ) let it be known that he would care to return to France . opportunist as always , on December 23 , 1913 , Poincaré seized the chance to cement his dominance over French foreign policy by appoint his admirer Paléologue to supercede Delcassé in St. Petersburg — thus beam someone who was perhaps even more virulently anti - German than Delcassé , if that were potential , to play the Republic in Russia .
Paléologue ’s appointee was especially significant in the context of the continuingLiman von Sanders Affair , which the Russians viewed as a test of French solidarity in the boldness of German bullying . President Poincaré had previously hinted he might support Russia ’s claim to control the Ottoman capital Constantinople and the Turkish straits , and Paléologue — whose house claimed ( probably spurious ) descent from Byzantine emperors — would support Russian title to the ancient city in the arrive conflict , helping pave the direction for the disastrous Gallipoli Expedition .
Paléologue ’s assignment further consolidated the Franco - Russian Alliance during the last countdown to war , as both partners point their determination not to stick out German bullying , relying on their reciprocal defensive correspondence for enduringness . call parting to Paléologue in January 1914 , French Prime Minister Gaston Doumergue depart no doubt about the main jabbing of his mission to St. Petersburg : “ War can break out from one mean solar day to the next … Our allies must rush to our aid . ” Meanwhile , Tsar Nicholas II echoed Poincaré ’s earliercallsfor a firm line of business against Germany , warn the depart Delcassé , “ We shall not allow ourselves be trampled upon . ”
Federal Reserve Created
On December 23 , 1913 , Congress lead and President Woodrow Wilson signed the Federal Reserve Act , creating a new national bank and massively increasing the government ’s great power to intervene in the thriftiness by setting interestingness rates and contain the supply of money .
The United States had had national coin bank before : In 1791 , Congress chartered the First Bank of the United States at the spur of Alexander Hamilton , who want the federal government to assume the Revolutionary War debt of the states to steady their funds and surrogate adhesion to the new body politic . But the national bank faced fierce opponent from Thomas Jefferson , James Madison , and other critic who feared prescribed corruption and federal aggrandizement . In 1833 , Andrew Jackson shut down the Second Bank of the United States ( the successor insane asylum lease in 1816 ) , which he accused of favoring northeastern industrial interests over little farmers on the frontier . To “ democratize ” the fiscal system Jackson transferred the national bank ’s store to United States Department of State bank ( “ pet banks ” ) mostly choose for political loyalty to Jackson and his ally in the Democratic Party . Meanwhile , “ wildcat ” banks free from Union regulation sprang up around the body politic and began issuing huge amounts of bank building notes with little or no backing , resulting in financial collapse and the Depression of 1837 .
During the Civil War , Congress created a new organization of “ national bank ” to finance the warfare and introduce the first uniform national currency , but stopped curtly of creating a new key depository financial institution , so the new national banks ( which mostly operated like Department of State banks ) lacked the financial support of a “ loaner of last resort ” to supply parking brake funds in the event of a financial crisis . That ’s what happened in 1907 , when a failed attempt to tree the stock of the United Copper Company on Wall Street triggered fiscal panic and bank runs across the U.S. entire financial flop was averted by the mad try of J.P. Morgan and bank presidents , essentially acting as an improvised cardinal banking company , but the public ’s confidence was naughtily shake and a steep economic downturn ensue .
The Panic of 1907 laid the base for the formation of the Federal Reserve System , beginning with the creation of a National Monetary Commission in 1908 , followed by a top - secret meeting of banker hosted by Delaware Senator Nelson W. Aldrich and Assistant Secretary of the Treasury A.P. Andrew at Jekyll Island , Georgia , in 1910 , where they agreed on an lineation for a National Reserve Bank . In January 1911 the National Monetary Commission formally recommended the geological formation of a National Reserve . After two years of argumentation over the residual between political and private ascendence , the bill to create the Federal Reserve System – composed of regional Federal Reserve Banks owned by private banks , supervised by an main Board of Governors , and backed by the “ full faith and credit ” of the United States — was introduced in the House of Representatives on August 29 , 1913 , make it by the Senate on December 18 , approved by a joint group discussion committee on December 22 and 23 , and immediately signed by President Wilson on the latter date .
During the First World War , the Federal Reserve help oneself protect the U.S. and humankind financial system from the initial shock of the war , then became a key financier of the U.S. and Allied warfare efforts , with the New York Fed leading the direction . To facilitate this process in 1916 and 1917 , Congress lowered the amount of “ literal ” money the Fed had to bind as collateral for loan , and also exchange the rules so governance debt could serve as collateral ; this helped increase the money provision to fund the state of war exploit , but also resulted in major inflation , with the purchasing economic value of the dollar decrease by or so one-half from 1914 and 1920 . After the war the Fed ’s “ easy money ” insurance helped fuel the economic elaboration of the “ wail 20s , ” but also contributed to the credit house of cards that in conclusion popped in 1929 , triggering the Great Depression .
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