Nelson Aldrich versus Carter Glass—Part 2

Burghers of Calais (Rodin) in deep doo-doo
Original story here

(Part 1)

After the passage of the Federal Reserve Act (FRA; Dec 1913), the Federal Reserve System continued to evolve.¹  Meanwhile, a lot of bitter debates raged about a surmised lost opportunity, a potential for the true liberator of the economy from "the money trust."  I was interested in understanding the circumstances under which key decisions were made, and the controversies surrounding them.

Paul Warburg is my main source; he contributed to the design of the Federal Reserve System (FRS), but his preferred version was the Aldrich Bill, which was not the one that passed.  The one that passed was drafted by Senators Carter Glass (of Glass-Steagall fame) and Robert L. Owen, assisted by Dr. H. Parker Willis.²  Willis and Glass are mainly interested in presenting the existing FRA and resultant FRS as a natural development of necessity; as a consequence, they aren't really interested in acknowledging a quarrel with either Senator Aldrich or anyone else.  On the other hand, Warburg was determined to challenge the final composition of the system as a fundamental departure from the "Money Trust" drawn up by Aldrich. Why?
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Nelson Aldrich versus Carter Glass—Part 1

(Part 2)

The 1907 Crisis finally provoked the Aldrich-Vreeland Act, which was intended to decide upon some form of central bank for the United States. Up to this time, the United States did not have a central bank and was unusually prone to financial crises.¹ Some professional bankers, such as Warburg (1930, p.17), drew a connection between the two. Others, such as Senator Carter Glass (D-VA) or Charles A. Conant (1896) felt the connection was overdrawn or nonexistent.

Over the long run, the main impact of Aldrich-Vreeland was the creation of the National Monetary Commission, which drew up a plan (later revised by Glass) for a central bank. Another impact, possibly less important, was provision for an emergency currency to be issued in the event of another financial crisis.² In the meantime, the architecture of the Federal Reserve System continued to evolve.

The question I seek to resolve here is, What were the key differences between Nelson Aldrich's plan (influenced by Paul Warburg) and Carter Glass's plan? Why did the two men favor their respective plans and what was the ultimate outcome?

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