Which act established a system of federal banks and allowed the government to control the money supply?

The Federal Reserve Act, enacted in 1913, established the Federal Reserve System, which is the central banking system of the United States. This act was crucial in creating a more flexible and stable financial structure. It allowed the federal government to regulate the money supply and implement monetary policy through various tools, such as changing interest rates and conducting open market operations.

The Federal Reserve also plays a significant role in managing inflation and addressing economic crises, highlighting its importance in the broader context of U.S. economic policy. By decentralizing banking while still maintaining a level of federal control, the act resolved many issues that had been present in the banking system, such as bank runs and failures, thereby fostering greater economic stability and public confidence in the financial system.

In contrast, the other options, while related to banking and financial regulation, do not specifically establish a system of federal banks or directly allow the government to control the money supply in the way that the Federal Reserve Act does. The Banking Act of 1933 and the Glass-Steagall Act primarily focused on separating commercial and investment banking and responding to the Great Depression, whereas the Monetary Control Act came later and aimed to expand the Federal Reserve's ability to manage the money supply but did not establish the system