<P> Rhode Island Senator Nelson Aldrich, the Republican leader in the Senate, ran the Commission personally, with the aid of a team of economists . They went to Europe and were impressed with how the central banks in Britain and Germany appeared to handle the stabilization of the overall economy and the promotion of international trade . Aldrich's investigation led to his plan in 1912 to bring central banking to the United States, with promises of financial stability, expanded international roles, control by impartial experts and no political meddling in finance . Aldrich asserted that a central bank had to be, paradoxically, decentralized somehow, or it would be attacked by local politicians and bankers as had the First and Second Banks of the United States . The Aldrich plan was introduced in 62nd and 63rd Congresses (1912 and 1913) but never gained much traction as the Democrats in 1912 won control of both the House and the Senate as well as the White House . </P> <P> The new President, Woodrow Wilson, then became the principal mover for banking and currency reform in the 63rd Congress, working with the two chairs of the House and Senate Banking and Currency Committees, Rep. Carter Glass of Virginia and Sen. Robert L. Owen of Oklahoma . It was Wilson who insisted that the regional Federal Reserve banks be controlled by a central Federal Reserve board appointed by the president with the advice and consent of the U.S. Senate . </P> <P> William Jennings Bryan, now Secretary of State, long - time enemy of Wall Street and still a power in the Democratic party, threatened to destroy the bill . Wilson masterfully came up with a compromise plan that pleased bankers and Bryan alike . The Bryanites were happy that Federal Reserve currency became liabilities of the government rather than of private banks--a symbolic change--and by provisions for federal loans to farmers . The Bryanite demand to prohibit interlocking directorates did not pass . Wilson convinced the anti-bank Congressmen that because Federal Reserve notes were obligations of the government, the plan fit their demands . Wilson assured southerners and westerners that the system was decentralized into 12 districts, and thus would weaken New York City's Wall Street influence and strengthen the hinterlands . After much debate and many amendments Congress passed the Federal Reserve Act or Glass--Owen Act, as it was sometimes called at the time, in late 1913 . President Wilson signed the Act into law on December 23, 1913 . </P> <P> The Federal Reserve System‍--‌also known as the Federal Reserve or simply as the Fed‍--‌is the central banking system of the United States today . The Federal Reserve's power developed slowly in part due to an understanding at its creation that it was to function primarily as a reserve, a money - creator of last resort to prevent the downward spiral of withdrawal / withholding of funds which characterizes a monetary panic . At the outbreak of World War I, the Federal Reserve was better positioned than the Treasury to issue war bonds, and so became the primary retailer for war bonds under the direction of the Treasury . After the war, the Federal Reserve, led by Paul Warburg and New York Governor Bank President Benjamin Strong, convinced Congress to modify its powers, giving it the ability to both create money, as the 1913 Act intended, and destroy money, as a central bank could . </P>

After several attempts at forming a central bank the us created the fed in what year