What is America's Bank: The Epic Struggle to Create the Federal Reserve about?

The Federal Reserve was created in 1913, but the story of how it came into existence spans three decades and involves a level of political resistance, financial panic, and legislative maneuvering that makes the eventual outcome seem unlikely in retrospect. Roger Lowenstein's America's Bank reconstructs that story from primary sources, tracing the reform movement from the panics of the late nineteenth century through the Panic of 1907, which demonstrated the catastrophic consequences of having no lender of last resort, to the eventual passage of the Federal Reserve Act under Woodrow Wilson.

The book is organized around a handful of central figures. Nelson Aldrich, the Senate Republican majority leader and father-in-law of John D. Rockefeller Jr., was the most powerful advocate of banking reform and led the secret 1910 meeting at Jekyll Island, Georgia, where the blueprint for the Fed was drafted by a small group of senior bankers and economists. Paul Warburg, a German-born banker who had worked with central banking systems in Europe, was the intellectual architect of the Jekyll Island plan and spent years patiently explaining what a central bank actually did to audiences that associated it with Wall Street conspiracy. Carter Glass, the Virginia congressman and future Senator, was the Democratic face of the final legislation and spent years negotiating between Wilson's progressive requirements and the banking community's interests.

What Lowenstein captures is how deeply controversial the Federal Reserve was before its creation. Populists feared that a central bank would give Wall Street permanent control over the money supply; farmers who depended on seasonal credit feared that a banker-run institution would tighten credit at precisely the moments they needed it most; Southern and Western politicians distrusted any reform that concentrated financial power in New York. The compromise that eventually passed created a decentralized system with regional banks — a structure that reflected these political fears and shaped the institution's character for a century.

The book's strongest quality is its readability. Lowenstein tells a story that could easily be a dry institutional history as a genuine political drama. The mechanics of banking reform are explained clearly enough that readers without economics backgrounds can follow the stakes. For anyone trying to understand what the Federal Reserve is and why it exists in its particular form, this is the most accessible single account available.