The Glass-Steagall act – 1932 or 1933?

Inter-bank lending is paralysed?
I don’t get it.
I thought fractional-reserve banking allows banks to create money out of thin air. (1) (2)

The masters of the US of A are calling for a new Glass-Steagall act.
I don’t get it.

We are being told that
the Glass-Steagall act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and that it included banking reforms, some of which were designed to control speculation
http://en.wikipedia.org/wiki/Glass-Steagall_Act
and that
the 1933 Glass-Steagall act which prohibited commercial banks from owning investment banks, and vice versa, has been steadily weakened since the 70s by an increasingly diverse and complex new financial reality.
http://blog.heritage.org/2008/09/22/the-glass-steagall-myth/

Here’s somebody who lived through it:
Benjamin M. Anderson, “Economics and the Public Welfare – A Financial and Economic History of the United States, 1914-46”, Indianapolis, Liberty Press, 1979, 2nd ed., (first ed. published in 1949 by D. Van Nostrand Company):

Anderson, p. 270
“The Glass-Steagall act”
In the first two months of 1932 there were further withdrawals of gold by foreign countries, and our gold monetary stock declined by $106,500,000. Our banks were under increasing pressure.
A remedy was found in the Glass-Steagall bill, introduced on February 11, 1932, rapidly put through Congress and signed by the president on February 27.

Ivo: that’s the Glass-Steagall act of February 27, 1932, not 1933.

Anderson continues on p. 270:
This act authorized the substitution of government securities for commercial paper as collateral or Federal Reserve notes for a period of one year. This was contrary to the original theory of the Federal Reserve act.

Anderson, p. 319:
The Glass banking bill, adopted June 16, 1933,

(Ivo: that’s Glass WITHOUT Steagall)

was a reform measure designed to prevent the abuses that had developed, particularly in the relation of the banks to the securities market, in the wild period, 1924-29.

Anderson continues on p. 319:
One sympathized with some of the provisions of the bill. But it went a great deal too far in dealing with symptoms. And it failed entirely to strike at the basic evil, which was the unsound Federal Reserve policy for the period 1924-28, which blew up the appalling bubble of stock market speculation and reckless securities issues.
+
One important provision of the act was that [it was] designed to effect a complete separation of commercial and investment banking.

Ivo:
That’s thus the Glass (WITHOUT Steagall) act of 1933

IVO’s QUESTION:

Do the masters of the US of A know what they are talking about?

The Glass-Steagall act of 1932 or the Glass (WITHOUT Steagall) act of 1933?

Right, even the number of L’s in “Steagall” is not clear.

Or shall we talk FreeGold,
the Glass-Steagall act, that is the act of 1932,
having been a response to withdrawals of gold by foreign countries?

ivocerckel@siquijor.ws

NOTES

(1)
http://en.wikipedia.org/wiki/Fractional-reserve_banking
Fractional-reserve banking is the banking practice in which banks are required to keep only a fraction of their deposits in reserve with the choice of lending out the remainder while maintaining the obligation to redeem all deposits upon demand. This practice is universal in modern banking.

(2)
http://en.wikipedia.org/wiki/Debt-based_monetary_system
Some critics of fractional reserve banking and the related monetary system may refer to it by the political term debt-based monetary system
+
Critics of fractional reserve usually note that the banking system “creates money out of nothing”. The insight that banks “create money by extending loans” is not new, and the subject is covered in most introductory economics textbooks and many popular reference works