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Who were behind the Federal Reserve Act (1913)?
Thewas the concluding chapter of an evolving (and controversial) effort to create a central bank in the United States.
The initial effort was led by Senator(R-Rhode Island). He was the chair of an eighteen-member National Monetary Commission launched in 1908.
The (in)famous “Jekyll Island Duck Hunt”
In November 1910, Sen. Aldrich, Assistant Secretary of the Treasury, investment banker , vice-president of Bankers Trust (who would later become the first New York Fed President), senior J.P. Morgan partner , president of National City Bank of New York , as well as a few other bankers attended to draft what was to become the Aldrich Plan to create an entity called the “National Reserve Association.”
The conference was held secret (under the guise of a “duck hunting trip”) on concerns that such gathering would face public scrutiny and the proposal would be perceived as “designed by and for the bankers.”
The Aldrich Plan
In 1912, Sen. Aldrich and the Commission presented the proposal to the Congress, but it was attacked by opponents in both the House and Senate. Facing mounting opposition, the proposal quickly stalled as Democrat Woodrow Wilson won the 1912 election, and Democrats gained control of both the House and Senate.
The Glass-Owen Act (Federal Reserve Act)
With the Aldrich Plan essentially defeated. President Wilson turned to Rep.(D-Virginia) and Sen. (D-Oklahoma) to create a compromise bill. The reform bill, known as Glass-Owen Act, retained many aspect of the Aldrich Plan but changed the centralized system into a system of regional banks (which became the ). President Wilson preferred an oversight agency and favored a central board (which became the ).
After months of negotiations and amendments, the legislation was enacted as theon December 23rd 1913. Below are some of the original architects:
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