Throughout the late 19th century, as the American economy experienced rapid growth, it also endured instability, panics, and depressions.[1] Following the Panic of 1907, the nation’s financial and political leaders took action to reform the nation’s monetary system, passing the Aldrich-Vreeland Act of 1908.

Section 17 of the act established the National Monetary Commission. Section 18 gave authority and instructions to the commission as follows:

It shall be the duty of this commission to inquire into and report to Congress, at the earliest date practicable, what changes are necessary or desirable in the monetary system of the United States or in the laws relating to banking and currency and for this purpose they are authorized to sit during the sessions or recess of Congress, at such times and places as they may deem desirable, to send for persons and papers, to administer oaths, to summons and compel the attendance of witnesses. … The commission shall have the power, through subcommittee or otherwise, to examine witnesses and to make such investigations and examinations, in this or other countries, of the subjects committed to their charge as they shall deem necessary.

Thus, the National Monetary Commission was created. Senator Nelson Aldrich became chairman of the commission, with Rep. Edward Vreeland as co-chairman.

  • May 30, 1908 – The Aldrich-Vreeland Act of 1908 is passed, establishing the National Monetary Commission.
  • 1908 – The commission begins collecting information, holding Conferences in London, Paris, and Berlin, and requesting various statistics and reports from other countries.
  • 1909-1911 – The commission publishes nearly 50 documents relating to the banking and currency laws and systems of the United States and other countries.
  • November 1910 – Aldrich convenes a secret meeting at the Jekyll Island Club, and a plan is drafted to reform the nation’s banking system. The meeting is disguised under the ruse of a duck hunt, and it includes Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip, and Paul Warburg.[2]
  • January 16, 1911 – Aldrich submits a Suggested Plan for Monetary Legislation to the National Monetary Commission, developed by the group at Jekyll Island.
  • January 8, 1912 – The National Monetary Commission submits its final report to Congress, calling for the establishment of a National Reserve Association and including text of a Bill to that effect (also called the Aldrich Plan).
  • 1912 – The Aldrich Plan bill is opposed by the 1912 Democratic Party Platform and dies.
  • 1913 – The recommendations of the National Monetary Commission are revived, with substantial changes, as the Federal Reserve Act.

The Papers of Nelson Aldrich pertaining to his work with the National Monetary Commission are also available on FRASER, and they include drafts of the commission’s publications along with handwritten notations.

 

Number of National and State Banks and Trust Companies, 1867-1909, in the United States. National Monetary Commission. Financial Diagrams (1911)

 

[1] Gary Richardson and Tim Sablik. “Banking Panics of the Gilded Age.” https://www.federalreservehistory.org/essays/banking_panics_of_the_gilded_age

[2] Gary Richardson and Jessie Romero. “The Meeting and Jekyll Island.” https://www.federalreservehistory.org/essays/jekyll_island_conference

 

The views expressed are those of the author(s) and do not necessarily reflect official positions of the Federal Reserve Bank of St. Louis or the Federal Reserve System.

Category: Uncurrent Events
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