The idea of creating a central bank of the United States is as old as the country itself. But whenever the idea was raised, suspicion followed. The south was wary of the north, the west of the east, regional interests were set against national, and private interests came into conflict with public.
In the aftermath of the crisis, the Aldrich-Vreeland Act was passed. It set up the National Monetary Commission essentially a fact-finding mission to Europe to see how things were done there. The commission agreed that a central bank would be a good idea in principle but how it would work was another matter. In a nutshell, the big banking interests, backed by the Republican Party, favoured a centralised lender of last resort that they would control. But agricultural interests demanded a regional system that would be flexible to their needs in terms of credit.
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For a country riven by such internal conflict, the venue for a top-secret meeting of America's most powerful bankers and lawmakers in 1910 was more than a little ironic Jekyll Island, off the coast of Georgia. What emerged was the Aldrich Plan, which set out the principle of a central bank with regional branches. But suspicion raised its ugly head once more and the plan failed. Yet enough of the basic idea survived when the Democrats moved into the White House in 1912.
The Glass-Owen proposal, named after two Democrat congressmen, followed, calling for a regional reserve banking system. President Woodrow Wilson added the central bank idea back in and came up with a compromise: The Federal Reserve Act.
But even that proved highly controversial. During negotiations, the senator for Missouri found himself with a tie-breaking vote, which is why Missouri is the only state with two reserve banks one in St Louis, and the other in Kansas City. After much debating, broad agreement was eventually reached and President Wilson was able to sign the bill into law on 23 December 1913.
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