Final answer:
The primary functions of banks up until the mid 1950s were paying interest on savings accounts and borrowing money. The Bank Act of 1954 allowed them to offer additional financial services. These changes were part of a larger evolution of the U.S. banking system, starting with the Federal Reserve's creation.
Step-by-step explanation:
Up until the mid 1950s, the primary function of banks was attracting depositors by paying interest on savings accounts and borrowing money from larger banks or central banks (e.g., the Federal Reserve in the United States). The Bank Act of 1954 expanded the role of banks by giving them the power to offer additional financial services, which could include investing in stocks, bonds, and other financial instruments to earn higher rates of return. This legislative change was part of a broader evolution in the banking system that began with the creation of the Federal Reserve System in 1914 and continued with reforms like the Banking Act of 1935 that established a more centralized and stable financial system within the United States.