The Federal Reserve Act in International Context

Nicholas Johnson, University of Chicago

The Federal Reserve Act was an event with global significance, and its framers knew that. Up until now, historiography on the founding of America’s central bank has been more or less nationalist, concentrating on the domestic balance of class forces – bankers wanted to capture state power and cartelize themselves; exporters wanted to make the American financial system more stable and liquid so they did not have to rely on London for loans; farmers wanted to use the state to break up New York’s “money trust” and spread financial services more evenly throughout the country – and everyone’s desire to put an end to the apparently endemic series of panics in the U.S. Moving beyond the nationalist frame, however, allows us to see additional forces at work. Global comparisons, the transnational flow of ideas, and imperial rivalries all piggybacked off of the domestic reform process to produce the Federal Reserve Act. These aspects of the Fed’s founding have been forgotten in part because they concern the form of debate, and in part because substantial agreement on some of the most important provisions obviated the need for public discussion altogether. Modernizing America by emulating European history, expanding the dollar bloc to enforce the Monroe doctrine, and experimenting in the colonies were all parts of an integrated process leading to the 1913 Act.

No extended abstract or paper available

 Presented in Session 116. Empire, Industry and State Finance in the Late 19th and Early 20th Centuries