manu/mldr-zoomed-100char-total-queries-documents

chunk_id stringlengths 3 9	chunk stringlengths 1 100
9851_93	National Reserve Association.
9851_94	Aldrich fought for a private monopoly with little government influence, but conceded that the
9851_95	government should be represented on the board of directors. Aldrich then presented what was
9851_96	commonly called the "Aldrich Plan" – which called for establishment of a "National Reserve
9851_97	Association" – to the National Monetary Commission. Most Republicans and Wall Street bankers
9851_98	favored the Aldrich Plan, but it lacked enough support in the bipartisan Congress to pass.
9851_99	Because the bill was introduced by Aldrich, who was considered the epitome of the "Eastern
9851_100	establishment", the bill received little support. It was derided by southerners and westerners who
9851_101	believed that wealthy families and large corporations ran the country and would thus run the
9851_102	proposed National Reserve Association. The National Board of Trade appointed Warburg as head of a
9851_103	committee to persuade Americans to support the plan. The committee set up offices in the then-45
9851_104	states and distributed printed materials about the proposed central bank. The Nebraskan populist
9851_105	and frequent Democratic presidential candidate William Jennings Bryan said of the plan: "Big
9851_106	financiers are back of the Aldrich currency scheme." He asserted that if it passed, big bankers
9851_107	would "then be in complete control of everything through the control of our national finances."
9851_108	There was also Republican opposition to the Aldrich Plan. Republican Sen. Robert M. La Follette and
9851_109	Rep. Charles Lindbergh Sr. both spoke out against the favoritism that they contended the bill
9851_110	granted to Wall Street. "The Aldrich Plan is the Wall Street Plan ... I have alleged that there is
9851_111	a 'Money Trust'", said Lindbergh. "The Aldrich plan is a scheme plainly in the interest of the
9851_112	Trust". In response, Rep. Arsène Pujo, a Democrat from Louisiana, obtained congressional
9851_113	authorization to form and chair a subcommittee (the Pujo Committee) within the House Committee
9851_114	Banking Committee, to conduct investigative hearings on the alleged "Money Trust". The hearings
9851_115	continued for a full year and were led by the subcommittee's counsel, Democratic lawyer Samuel
9851_116	Untermyer, who later also assisted in drafting the Federal Reserve Act. The "Pujo hearings"
9851_117	convinced much of the populace that America's money largely rested in the hands of a select few on
9851_118	Wall Street. The Subcommittee issued a report saying:
9851_119	If by a 'money trust' is meant an established and well-defined identity and community of interest
9851_120	between a few leaders of finance ... which has resulted in a vast and growing concentration of
9851_121	control of money and credit in the hands of a comparatively few men ... the condition thus
9851_122	described exists in this country today ... To us the peril is manifest ... When we find ... the
9851_123	same man a director in a half dozen or more banks and trust companies all located in the same
9851_124	section of the same city, doing the same class of business and with a like set of associates
9851_125	similarly situated all belonging to the same group and representing the same class of interests,
9851_126	all further pretense of competition is useless. ...
9851_127	Seen as a "Money Trust" plan, the Aldrich Plan was opposed by the Democratic Party as was stated in
9851_128	its 1912 campaign platform, but the platform also supported a revision of banking laws intended to
9851_129	protect the public from financial panics and "the domination of what is known as the "Money Trust."
9851_130	During the 1912 election, the Democratic Party took control of the presidency and both chambers of
9851_131	Congress. The newly elected president, Woodrow Wilson, was committed to banking and currency
9851_132	reform, but it took a great deal of his political influence to get an acceptable plan passed as the
9851_133	Federal Reserve Act in 1913. Wilson thought the Aldrich plan was perhaps "60–70% correct". When
9851_134	Virginia Rep. Carter Glass, chairman of the House Committee on Banking and Currency, presented his
9851_135	bill to President-elect Wilson, Wilson said that the plan must be amended to contain a Federal
9851_136	Reserve Board appointed by the executive branch to maintain control over the bankers.
9851_137	After Wilson presented the bill to Congress, a group of Democratic congressmen revolted. The group,
9851_138	led by Representative Robert Henry of Texas, demanded that the "Money Trust" be destroyed before it
9851_139	could undertake major currency reforms. The opponents particularly objected to the idea of regional
9851_140	banks having to operate without the implicit government protections that large, so-called
9851_141	money-center banks would enjoy. The group almost succeeded in killing the bill, but were mollified
9851_142	by Wilson's promises to propose antitrust legislation after the bill had passed, and by Bryan's
9851_143	support of the bill.
9851_144	Enactment of the Federal Reserve Act (1913)
9851_145	After months of hearings, amendments, and debates the Federal Reserve Act passed Congress in
9851_146	December, 1913. The bill passed the House by an overwhelming majority of 298 to 60 on December
9851_147	22, 1913 and passed the Senate the next day by a vote of 43 to 25.
9851_148	An earlier version of the bill had passed the Senate 54 to 34, but almost 30 senators had left for
9851_149	Christmas vacation by the time the final bill came to a vote.
9851_150	Most every Democrat was in support of and most Republicans were against it. As noted in a paper by
9851_151	the American Institute of Economic Research:
9851_152	In its final form, the Federal Reserve Act represented a compromise among three political groups.
9851_153	Most Republicans (and the Wall Street bankers) favored the Aldrich Plan that came out of Jekyll
9851_154	Island. Progressive Democrats demanded a reserve system and currency supply owned and controlled by
9851_155	the Government in order to counter the "money trust" and destroy the existing concentration of
9851_156	credit resources in Wall Street. Conservative Democrats proposed a decentralized reserve system,
9851_157	owned and controlled privately but free of Wall Street domination. No group got exactly what it
9851_158	wanted. But the Aldrich plan more nearly represented the compromise position between the two
9851_159	Democrat extremes, and it was closest to the final legislation passed.
9851_160	Frank Vanderlip, one of the Jekyll Island attendees and the president of National City Bank, wrote
9851_161	in his autobiography:
9851_162	Although the Aldrich Federal Reserve Plan was defeated when it bore the name Aldrich, nevertheless
9851_163	its essential points were all contained in the plan that was finally adopted.
9851_164	Ironically, in October 1913, two months before the enactment of the Federal Reserve Act, Frank
9851_165	Vanderlip proposed before the Senate Banking Committee his own competing plan to the Federal
9851_166	Reserve System, one with a single central bank controlled by the Federal government, which almost
9851_167	derailed the legislation then being considered and already passed by the U.S. House of
9851_168	Representatives. Even Aldrich stated strong opposition to the currency plan passed by the House.
9851_169	However, the former point was also made by Republican Representative Charles Lindbergh Sr. of
9851_170	Minnesota, one of the most vocal opponents of the bill, who on the day the House agreed to the
9851_171	Federal Reserve Act told his colleagues:
9851_172	But the Federal reserve board have no power whatever to regulate the rates of interest that bankers
9851_173	may charge borrowers of money. This is the Aldrich bill in disguise, the difference being that by
9851_174	this bill the Government issues the money, whereas by the Aldrich bill the issue was controlled by
9851_175	the banks ... Wall Street will control the money as easily through this bill as they have
9851_176	heretofore.(Congressional Record, v. 51, page 1447, Dec. 22, 1913)
9851_177	Republican Congressman Victor Murdock of Kansas, who voted for the bill, told Congress on that same
9851_178	day:
9851_179	I do not blind myself to the fact that this measure will not be effectual as a remedy for a great
9851_180	national evil – the concentrated control of credit ... The Money Trust has not passed [died] ...
9851_181	You rejected the specific remedies of the Pujo committee, chief among them, the prohibition of
9851_182	interlocking directorates. He [your enemy] will not cease fighting ... at some half-baked enactment
9851_183	... You struck a weak half-blow, and time will show that you have lost. You could have struck a
9851_184	full blow and you would have won.
9851_185	In order to get the Federal Reserve Act passed, Wilson needed the support of populist William
9851_186	Jennings Bryan, who was credited with ensuring Wilson's nomination by dramatically throwing his
9851_187	support Wilson's way at the 1912 Democratic convention. Wilson appointed Bryan as his Secretary of
9851_188	State. Bryan served as leader of the agrarian wing of the party and had argued for unlimited
9851_189	coinage of silver in his "Cross of Gold Speech" at the 1896 Democratic convention. Bryan and the
9851_190	agrarians wanted a government-owned central bank which could print paper money whenever Congress
9851_191	wanted, and thought the plan gave bankers too much power to print the government's currency. Wilson
9851_192	sought the advice of prominent lawyer Louis Brandeis to make the plan more amenable to the agrarian

9851_93

National Reserve Association.

9851_94

Aldrich fought for a private monopoly with little government influence, but conceded that the

9851_95

government should be represented on the board of directors. Aldrich then presented what was

9851_96

commonly called the "Aldrich Plan" – which called for establishment of a "National Reserve

9851_97

Association" – to the National Monetary Commission. Most Republicans and Wall Street bankers

9851_98

favored the Aldrich Plan, but it lacked enough support in the bipartisan Congress to pass.

9851_99

Because the bill was introduced by Aldrich, who was considered the epitome of the "Eastern

9851_100

establishment", the bill received little support. It was derided by southerners and westerners who

9851_101

believed that wealthy families and large corporations ran the country and would thus run the

9851_102

proposed National Reserve Association. The National Board of Trade appointed Warburg as head of a

9851_103

committee to persuade Americans to support the plan. The committee set up offices in the then-45

9851_104

states and distributed printed materials about the proposed central bank. The Nebraskan populist

9851_105

and frequent Democratic presidential candidate William Jennings Bryan said of the plan: "Big

9851_106

financiers are back of the Aldrich currency scheme." He asserted that if it passed, big bankers

9851_107

would "then be in complete control of everything through the control of our national finances."

9851_108

There was also Republican opposition to the Aldrich Plan. Republican Sen. Robert M. La Follette and

9851_109

Rep. Charles Lindbergh Sr. both spoke out against the favoritism that they contended the bill

9851_110

granted to Wall Street. "The Aldrich Plan is the Wall Street Plan ... I have alleged that there is

9851_111

a 'Money Trust'", said Lindbergh. "The Aldrich plan is a scheme plainly in the interest of the

9851_112

Trust". In response, Rep. Arsène Pujo, a Democrat from Louisiana, obtained congressional

9851_113

authorization to form and chair a subcommittee (the Pujo Committee) within the House Committee

9851_114

Banking Committee, to conduct investigative hearings on the alleged "Money Trust". The hearings

9851_115

continued for a full year and were led by the subcommittee's counsel, Democratic lawyer Samuel

9851_116

Untermyer, who later also assisted in drafting the Federal Reserve Act. The "Pujo hearings"

9851_117

convinced much of the populace that America's money largely rested in the hands of a select few on

9851_118

Wall Street. The Subcommittee issued a report saying:

9851_119

If by a 'money trust' is meant an established and well-defined identity and community of interest

9851_120

between a few leaders of finance ... which has resulted in a vast and growing concentration of

9851_121

control of money and credit in the hands of a comparatively few men ... the condition thus

9851_122

described exists in this country today ... To us the peril is manifest ... When we find ... the

9851_123

same man a director in a half dozen or more banks and trust companies all located in the same

9851_124

section of the same city, doing the same class of business and with a like set of associates

9851_125

similarly situated all belonging to the same group and representing the same class of interests,

9851_126

all further pretense of competition is useless. ...

9851_127

Seen as a "Money Trust" plan, the Aldrich Plan was opposed by the Democratic Party as was stated in

9851_128

its 1912 campaign platform, but the platform also supported a revision of banking laws intended to

9851_129

protect the public from financial panics and "the domination of what is known as the "Money Trust."

9851_130

During the 1912 election, the Democratic Party took control of the presidency and both chambers of

9851_131

Congress. The newly elected president, Woodrow Wilson, was committed to banking and currency

9851_132

reform, but it took a great deal of his political influence to get an acceptable plan passed as the

9851_133

Federal Reserve Act in 1913. Wilson thought the Aldrich plan was perhaps "60–70% correct". When

9851_134

Virginia Rep. Carter Glass, chairman of the House Committee on Banking and Currency, presented his

9851_135

bill to President-elect Wilson, Wilson said that the plan must be amended to contain a Federal

9851_136

Reserve Board appointed by the executive branch to maintain control over the bankers.

9851_137

After Wilson presented the bill to Congress, a group of Democratic congressmen revolted. The group,

9851_138

led by Representative Robert Henry of Texas, demanded that the "Money Trust" be destroyed before it

9851_139

could undertake major currency reforms. The opponents particularly objected to the idea of regional

9851_140

banks having to operate without the implicit government protections that large, so-called

9851_141

money-center banks would enjoy. The group almost succeeded in killing the bill, but were mollified

9851_142

by Wilson's promises to propose antitrust legislation after the bill had passed, and by Bryan's

9851_143

support of the bill.

9851_144

Enactment of the Federal Reserve Act (1913)

9851_145

After months of hearings, amendments, and debates the Federal Reserve Act passed Congress in

9851_146

December, 1913. The bill passed the House by an overwhelming majority of 298 to 60 on December

9851_147

22, 1913 and passed the Senate the next day by a vote of 43 to 25.

9851_148

An earlier version of the bill had passed the Senate 54 to 34, but almost 30 senators had left for

9851_149

Christmas vacation by the time the final bill came to a vote.

9851_150

Most every Democrat was in support of and most Republicans were against it. As noted in a paper by

9851_151

the American Institute of Economic Research:

9851_152

In its final form, the Federal Reserve Act represented a compromise among three political groups.

9851_153

Most Republicans (and the Wall Street bankers) favored the Aldrich Plan that came out of Jekyll

9851_154

Island. Progressive Democrats demanded a reserve system and currency supply owned and controlled by

9851_155

the Government in order to counter the "money trust" and destroy the existing concentration of

9851_156

credit resources in Wall Street. Conservative Democrats proposed a decentralized reserve system,

9851_157

owned and controlled privately but free of Wall Street domination. No group got exactly what it

9851_158

wanted. But the Aldrich plan more nearly represented the compromise position between the two

9851_159

Democrat extremes, and it was closest to the final legislation passed.

9851_160

Frank Vanderlip, one of the Jekyll Island attendees and the president of National City Bank, wrote

9851_161

in his autobiography:

9851_162

Although the Aldrich Federal Reserve Plan was defeated when it bore the name Aldrich, nevertheless

9851_163

its essential points were all contained in the plan that was finally adopted.

9851_164

Ironically, in October 1913, two months before the enactment of the Federal Reserve Act, Frank

9851_165

Vanderlip proposed before the Senate Banking Committee his own competing plan to the Federal

9851_166

Reserve System, one with a single central bank controlled by the Federal government, which almost

9851_167

derailed the legislation then being considered and already passed by the U.S. House of

9851_168

Representatives. Even Aldrich stated strong opposition to the currency plan passed by the House.

9851_169

However, the former point was also made by Republican Representative Charles Lindbergh Sr. of

9851_170

Minnesota, one of the most vocal opponents of the bill, who on the day the House agreed to the

9851_171

Federal Reserve Act told his colleagues:

9851_172

But the Federal reserve board have no power whatever to regulate the rates of interest that bankers

9851_173

may charge borrowers of money. This is the Aldrich bill in disguise, the difference being that by

9851_174

this bill the Government issues the money, whereas by the Aldrich bill the issue was controlled by

9851_175

the banks ... Wall Street will control the money as easily through this bill as they have

9851_176

heretofore.(Congressional Record, v. 51, page 1447, Dec. 22, 1913)

9851_177

Republican Congressman Victor Murdock of Kansas, who voted for the bill, told Congress on that same

9851_178

day:

9851_179

I do not blind myself to the fact that this measure will not be effectual as a remedy for a great

9851_180

national evil – the concentrated control of credit ... The Money Trust has not passed [died] ...

9851_181

You rejected the specific remedies of the Pujo committee, chief among them, the prohibition of

9851_182

interlocking directorates. He [your enemy] will not cease fighting ... at some half-baked enactment

9851_183

... You struck a weak half-blow, and time will show that you have lost. You could have struck a

9851_184

full blow and you would have won.

9851_185

In order to get the Federal Reserve Act passed, Wilson needed the support of populist William

9851_186

Jennings Bryan, who was credited with ensuring Wilson's nomination by dramatically throwing his

9851_187

support Wilson's way at the 1912 Democratic convention. Wilson appointed Bryan as his Secretary of

9851_188

State. Bryan served as leader of the agrarian wing of the party and had argued for unlimited

9851_189

coinage of silver in his "Cross of Gold Speech" at the 1896 Democratic convention. Bryan and the

9851_190

agrarians wanted a government-owned central bank which could print paper money whenever Congress

9851_191

wanted, and thought the plan gave bankers too much power to print the government's currency. Wilson

9851_192

sought the advice of prominent lawyer Louis Brandeis to make the plan more amenable to the agrarian