Federal Reserve Act signed

On December 23, 1913, President Woodrow Wilson signed the Federal Reserve Act in Washington after Congress approved the bill drafted through the efforts of Representative Carter Glass and Senator Robert L. Owen. The statute created the Federal Reserve System, including a Federal Reserve Board in Washington and twelve regional Federal Reserve Banks across the country. Wilson and Democratic leaders presented the law as a banking reorganization that would prevent the kind of panic that had shaken the United States during the Panic of 1907.

The act addressed the long-running political fight over whether the United States should have a central banking mechanism strong enough to supply emergency credit without handing permanent control to Wall Street. Progressive reformers wanted a public system that could stabilize currency and banking reserves, while conservatives and many rural critics feared a financial structure that might concentrate too much power in New York banks or the federal government. The compromise written into the Federal Reserve Act divided authority between the national board and regional reserve banks, reflecting the tension between national coordination and local control.

The twelve Federal Reserve Banks opened in November 1914 as the direct institutional result of the Federal Reserve Act. The new system then became the core mechanism for wartime finance during World War I and the foundation for later banking legislation such as the Banking Act of 1935, which strengthened the Federal Reserve Board's control over monetary policy.