America's Bank

America's Bank

The Epic Struggle to Create the Federal Reserve

Book - 2015
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A tour de force of historical reportage, America's Bank illuminates the tumultuous era and remarkable personalities that spurred the unlikely birth of America's modern central bank, the Federal Reserve. Today, the Fed is the bedrock of the financial landscape, yet the fight to create it was so protracted and divisive that it seems a small miracle that it was ever established.

For nearly a century, America, alone among developed nations, refused to consider any central or organizing agency in its financial system. Americans' mistrust of big government and of big banks--a legacy of the country's Jeffersonian, small-government traditions--was so widespread that modernizing reform was deemed impossible. Each bank was left to stand on its own, with no central reserve or lender of last resort. The real-world consequences of this chaotic and provincial system were frequent financial panics, bank runs, money shortages, and depressions. By the first decade of the twentieth century, it had become plain that the outmoded banking system was ill equipped to finance America's burgeoning industry. But political will for reform was lacking. It took an economic meltdown, a high-level tour of Europe, and--improbably--a conspiratorial effort by vilified captains of Wall Street to overcome popular resistance. Finally, in 1913, Congress conceived a federalist and quintessentially American solution to the conflict that had divided bankers, farmers, populists, and ordinary Americans, and enacted the landmark Federal Reserve Act.

Roger Lowenstein--acclaimed financial journalist and bestselling author of When Genius Failed and The End of Wall Street --tells the drama-laden story of how America created the Federal Reserve, thereby taking its first steps onto the world stage as a global financial power. America's Bank showcases Lowenstein at his very finest: illuminating complex financial and political issues with striking clarity, infusing the debates of our past with all the gripping immediacy of today, and painting unforgettable portraits of Gilded Age bankers, presidents, and politicians.

Lowenstein focuses on the four men at the heart of the struggle to create the Federal Reserve. These were Paul Warburg, a refined, German-born financier, recently relocated to New York, who was horrified by the primitive condition of America's finances; Rhode Island's Nelson W. Aldrich, the reigning power broker in the U.S. Senate and an archetypal Gilded Age legislat∨ Carter Glass, the ambitious, if then little-known, Virginia congressman who chaired the House Banking Committee at a crucial moment of political transition; and President Woodrow Wilson, the academician-turned-progressive-politician who forced Glass to reconcile his deep-seated differences with bankers and accept the principle (anathema to southern Democrats) of federal control. Weaving together a raucous era in American politics with a storied financial crisis and intrigue at the highest levels of Washington and Wall Street, Lowenstein brings the beginnings of one of the country's most crucial institutions to vivid and unforgettable life. Readers of this gripping historical narrative will wonder whether they're reading about one hundred years ago or the still-seething conflicts that mark our discussions of banking and politics today. 
Publisher: New York :, Penguin Press,, 2015, ©2015.
ISBN: 9781594205491
Branch Call Number: 332. 110973 LOW
Characteristics: 355 pages, 8 unnumbered pages of plates : illustrations, portraits ; 25 cm

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p
patcarstensen
Dec 29, 2015

I found this to be useful in understanding the whole Progressive Era.

r
rpavlacic
Dec 23, 2015

It's hard to believe that for nearly eight decades the US did not have a central bank, until the Federal Reserve System (with a national board and twelve regional reserve banks) was created in 1913. (For what's it's worth, Canada actually didn't have one until 1935 - until then, banks printed their own money.) I agree with some of the reviewers here - this wasn't an epic struggle, it was merely a fight to ensure there wouldn't be a gold or silver standard, but rather that countries would have "fiat" currency - that is, money existed for its own sake and was not backed by gold or silver but rather by a portion of banks' reserves. Creating a centralized system may very well have stabilized the currency and indeed laid the groundwork for the greenback to succeed the British pound as the world's reserve money ... but as we saw in 2008, it also forced The Fed to embark on a six year program of printing new money to keep the dollar afloat - which hardly helped to ensure the world's confidence. I'm not suggesting getting rid of The Fed, but it is still based on the system created in 1913 and is in desperate need of reform. What kind, I can't say.

s
StarGladiator
Oct 24, 2015

After 2007-2008, the global financial meltdown, I would frequently hear someone on the radio being interviewed about it, and wonder aloud who that idiot and fraud was, and later found out they were former Federal Reserve governors! To be expected . . .
Epic struggle??? More like the epic scam! The congressional progressives were assured by Aldrich and others that the gov't would still have control over the printing of the currency when what Aldrich [married into the Rockefeller family] lied and really meant was that the gov't would get stuck with the work and bill for printing the currency, but the interest and debt would go to the Federal Reserve, owned by private banksters!
Lowenstein is a sham, as is this sad waste of paper, and I believe he's still the director of the Sequoia Fund, which is invested in that recent pharmaceutical scam, and will they be losing some $$$.
[FYI: Paul Warburg was the economic advisor to President Wilson and first vice-chair of the Fed, turned down the chairmanship as being too public, while his brother Max was economic advisor to Kaiser Wilhelm - - this led to World War I. - - Also, here's the way it works: X amount of money is printed, or introduced as the money supply, and then interest on that amount must be paid back, which would be X + Interest - - but ONLY X amount was printed?
GET IT?????]

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