Three tries at a central bank.

Americans have always been suspicious of concentrated financial power. That suspicion killed the country’s first two central banks outright. Understanding why is the missing context for 1913 — and for the argument over the Fed today.

Try one: the First Bank (1791–1811)

The new republic was broke and its credit was a mess. Alexander Hamilton, the first Treasury Secretary, argued that a national bank was the cure: it could hold federal funds, issue a stable national currency, and give the government a reliable lender. Over the fierce objection of Thomas Jefferson and James Madison — who called it unconstitutional and a giveaway to merchants and speculators — President Washington signed the First Bank of the United States into law in 1791, with a 20-year charter.

It worked reasonably well. But the suspicion never died. When the charter came up for renewal in 1811, it lost by a single vote in each chamber — in the Senate, a 17–17 tie broken by Vice President George Clinton, who voted to let it expire. America killed its first central bank. Then the War of 1812 arrived, and financing it without one was a fiasco.

Try two: the Second Bank and the Bank War (1816–1836)

Chastened by the war, the same Madison who had fought the First Bank now signed the Second Bank of the United States into law in 1816. Under Nicholas Biddle, who took charge in 1823, it grew into the most powerful financial institution in the country — and that power is exactly what made it a target.

Andrew Jackson distrusted the Bank as a privileged monopoly that answered to no voter. In 1832, his rival Henry Clay and Biddle decided to force the issue: they pushed a re-charter through Congress four years early, betting Jackson wouldn’t dare veto it in an election year. He dared. On July 10, 1832, Jackson vetoed the bill in a blistering message casting the Bank as a tool of the rich against the common man — and won re-election handily.

He didn’t stop there. In 1833 Jackson ordered the federal deposits removed from the Bank and parked in state "pet banks." Biddle retaliated by contracting credit to manufacture a recession and force Congress’s hand — a move that backfired and confirmed Jackson’s case that one man held too much power. The charter expired in 1836; the Panic of 1837 followed. "The bank is trying to kill me," Jackson said, "but I will kill it." He did. The irony the rest of this site keeps returning to: he’s on the $20 bill.

Twice America built a central bank. Twice it tore the thing down. The Fed is the version that finally stuck.

The 77-year gap, and the road to 1913

For more than three generations the United States had no central bank at all. The National Banking Acts of 1863–64 created federally chartered banks and a uniform currency to finance the Civil War, but still no central lender — and the economy lurched through repeated banking panics with no backstop. The last and sharpest, the Panic of 1907, was halted only when the private banker J. P. Morgan personally organized a rescue. The lesson Washington drew: the country could not keep depending on one man’s checkbook.

Congress created the National Monetary Commission, chaired by Senator Nelson Aldrich. In November 1910, Aldrich and a handful of the era’s most powerful bankers — Paul Warburg (often called the "father of the Federal Reserve"), Frank Vanderlip, Henry Davison, Charles Norton, and Treasury’s A. Piatt Andrew — slipped away to the Jekyll Island Club off Georgia and, in secret, drafted what became the "Aldrich Plan." The secrecy was real, and it became the movement’s founding grievance.

But the plan that finally passed was not the bankers’ plan. The Aldrich Plan — a single central bank run by financiers — was politically radioactive. Democrats under Carter Glass and Robert Owen reworked it into a system of twelve regional banks with a public board on top; the populist William Jennings Bryan forced in the requirement that the currency be an obligation of the government, not the banks. Over the loud objection of opponents like Charles A. Lindbergh Sr., President Woodrow Wilson signed the Federal Reserve Act on December 23, 1913.

Note on the sources: the Jekyll Island meeting genuinely happened and was deliberately kept secret — participants later admitted as much. The popular movement account, G. Edward Griffin’s The Creature from Jekyll Island, dramatizes it; we cite it as a movement document, not as settled history. Historians also stress that the Act that passed differed substantially from the bankers’ Aldrich Plan.