Rufus Folorunso Akinyooye - St Clements University

for reconstruction. The development contributed in no small measure to the debilitating
impact of the depression on those countries. Adolf Hitler came to power in Germany in
1933 and repudiated the Treaty of Versailles including the war reparation. The BIS was
to emerge later and remain an integral part of world finance up till today.
The United States is undoubtedly the most powerful economy in the world and all other
countries after the collapse of the Soviet Union seem to follow them. The banking and
monetary structures however are what the third world appear not to fully comprehend.
Commercial banking started out as an almost private affair between a bank and its
customers. And then the government stepped in to regulate by first taking over the
issue of notes, and then confiscating the gold backing the notes and replacing it with
more notes that are not redeemable and putting the entire operation in the hands of a
privately owned corporation – the Fed.
Despite all the reforms under President Roosevelt the Depression wore on. It took the
advent of the Second World War to breathe life into the economy of the United States.
According to the Encyclopaedia Britannica, during the New Deal years of President
Franklin Roosevelt the American response to threats of war in other parts of the world
was to seek security through isolation. Series of neutrality laws were enacted by
Congress to keep the United States out of any new conflict, not even the outbreak of the
Spanish Civil War in 1936 could tempt the country into war.
And then Germany invaded Poland in 1939 to touch off the Second World War. The
United States Congress had to revise the Neutrality Act to allow Great Britain and
France at war with Germany to purchase arms on a cash and carry basis. In 1940 France
fell to the Germans and the U.S had to throw all its support to Great Britain. President
Franklin Roosevelt had to campaign for and won an unprecedented third term to
prosecute the war. On December 7, 1941, Japan bombed Pearl Harbour in the United
States to drag that country fully into the Second World War. The following day
December 8, 1941 the United States declared war against Japan. With the United States
fully at war the economy was revived and progress came into the country at an
unprecedented pace because of the production generated by the war effort.