was passed on December 23, 1913.
http://savannahnow.com/share/blog-post/swamptown/2011-08-01/swampyvilles-intended-consequences-federal-reserve-actIn early November 1910, Aldrich met (At Jekyll Island Georgia) with
five well known members of the New York banking community to devise
a central banking bill(scam). Paul Warburg, an attendee of the meeting and
long time advocate of central banking in the U.S., later wrote
that Aldrich was "bewildered" at all that he had absorbed abroad
and he was faced with the difficult task of writing a highly
technical bill while being harassed by the daily grind of his
Senatorial duties. After ten days of deliberation, the bill,
which would later be referred to as the "Aldrich Plan",
was agreed upon. It had several key components including: a
central bank with a Washington-based headquarters and fifteen
branches located throughout the U.S. in geographically strategic
locations, and a uniform elastic currency based on gold and
commercial paper (Fiat money). Aldrich believed a central banking
system with no political involvement was best, but was convinced by
Warburg that a plan with no public control was not politically feasible.
The compromise involved representation of the public sector on the Board
of Directors. (They wanted the people to "think" that they were in charge)
Aldrich's bill was met with much opposition from politicians.
Critics were suspicious of a central bank, and charged Aldrich
of being biased due to his own wealth and close ties to wealthy bankers
such as J. P. Morgan and (John D. Rockefeller, Jr., Aldrich's son-in-law).
Most Republicans favored the Aldrich Plan, but it lacked enough
support in Congress to pass because rural and western states viewed
it as favoring the "eastern establishment". In contrast, (progressive
Democrats favored a reserve system owned and operated by the government);
they believed that public ownership of the central bank would end Wall
Street's control of the American currency supply. Conservative Democrats
fought for a privately owned, yet decentralized, reserve system, which
would still be free of Wall Street's control. (Nice thought, but it
never happened)
The original Aldrich Plan/scam was dealt a fatal blow in 1912, when
Democrats won the White House and Congress. Nonetheless, President
Woodrow Wilson believed that the Aldrich plan would suffice with a
few modifications. The plan became the basis for the Federal Reserve
Act, which was proposed by Senator Robert Owen in May 1913. (The
primary difference between the two bills was the transfer of control
of the Board of Directors called the Federal Open Market Committee
in the Federal Reserve Act to the government). Even though the
government had oversight of the Federal Reserve it has never actually
pursued this responsibility, allowing laws to be changed later to benefit
the Financial interests. The bill passed Congress in late 1913.