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Banking and the Federal Reserve


Robert Morris

Robert Morris, a merchant from Philadelphia before the American Revolutionary War, distinguished himself as a strong and honest leader. So much so, the Continental Congress came to depend on him for most of the supplies used by the Continental Army and Navy throughout the war. After Congress ratified the Articles of Confederation, Morris accepted the position of financier. This made him the second most powerful man in the thirteen states after General Washington, as he controlled how all the monies collected by Congress were spent. Morris also pressed for the first chartered bank and first attempt at a central bank in North America, the Bank of North America. Robert Morris was one of two men from the American Revolution to sign the Declaration of Independence, the Articles of Confederation, and the US Constitution.

This is an image of The Apotheosis of Washington, a mural painted in the US Capitol building. It shows Mercury bestowing money upon Robert Morris (image courtesy of the Architect of the Capitol).

Alexander Hamilton

Alexander Hamilton was an aide to Robert Morris and General Washington's Chief of Staff. Hamilton held many of the same ideas about government and finance as Morris. Alexander Hamilton was the first Secretary of the Treasury under President Washington, and helped pass the acts responsible for the US Mint, the First Bank of the United States, and the first tax passed by the US Congress. Hamilton also founded the first political party, the Federalist Party, and co-authored the Federalist Papers with John Jay and James Madison.

Alexander Hamilton statue outside of the Treasury Building in Washington, DC. Hamilton is also featured on the ten-dollar bill. Courtesy of the Library of Congress

Andrew Jackson

Andrew Jackson was the seventh President of the United States. He was a devout opponent of the Second Bank of the United States, and banks in general, due to his experiences in poverty as a child. He hated debt and the power it had over the common person, which influenced his decision to veto the re-chartering of the Second Bank. Andrew Jackson was also the only president in the history of the United States to eradicate the federal debt, by selling the land obtained in the Louisiana Purchase. The land sales also caused rampant land speculation, with many of the purchases made on credit. Along with the closing of the Second Bank and Jackson's use of the "Spoils System," this sparked the Panic of 1837 and plunged the United States into an economic depression for the next seven years.

Portrait of Andrew Jackson (image courtesy of the White House Historical Association).

J. P. Morgan

John Pierpont Morgan was a banker and businessman who came to dominate many of the largest industries in the United States. He was responsible for creating General Electric and US Steel, with US Steel being the first billion-dollar company in the world. He aided the US government and economy in two of the largest panics of the late nineteenth and early twentieth centuries. In 1895, the US Treasury was running out of gold because of the Panic of 1893, when J. P. Morgan worked with a colleague to supply the Treasury with 62 million dollars in gold. In 1907 he again worked with several other banks to help end the Banking Panic of 1907. The public did not think well of his involvement in these crises and called for a federal solution to the central bank issue rose after the Panic of 1907. Continuing Morgan's legacy of financial power, JPMorgan Chase & Co. is the largest bank in the US and the second largest in the world.

JP Morgan, 1902 (image courtesy of the Library of Congress).

Robert L. Owen

Robert Latham Owen was born in Lynchburg, Virginia, in 1856. His father was president of a railroad company, and his mother was Cherokee, originally from Indian Territory. Robert attended school in Virginia and Baltimore, eventually receiving a master's degree from Washington and Lee University in 1877. In 1879, his father died unexpectedly, and Robert and his mother returned to Indian Territory. While there, he became the secretary of the Cherokee Board of Education and studied law.

After passing the bar, officials appointed Robert the head of the Union Agency of the Five Civilized Tribes. During this time, Owen practiced law and edited the Vinita Indian Chieftain. He argued many of his cases on behalf of the Five Tribes. He argued one of those cases, the "Eastern Cherokee" case, before the US Supreme Court and the decision awarded millions of dollars to members of the Cherokee tribe.

In 1890, Owen established the First National Bank of Muskogee and served as president until 1900. It was during this time that he witnessed the problems associated with the Panic of 1893, which reinforced his belief in national banking reform. Owen began working with other politicians in Indian Territory on banking reform measures designed to prevent panics in 1896. Owen also worked to create a state for Indian Territory separate from Oklahoma and attend the Sequoyah Convention of 1905 and the Oklahoma Constitutional Convention.

Owen ran for an Oklahoma senate seat after statehood in 1907. He received the most votes out of all the candidates and became one of Oklahoma's first senators as well as one of the nation's first senators of American Indian descent. Senator Owen went on to help create the Senate Banking Committee and served as its first chairperson. Owen also led on issues like child labor reform, women's suffrage, prohibition, and the direct election of senators.

In 1913, Owen helped cosponsor a bill that became the Federal Reserve Act. Owen sponsored the bill in the Senate, while Congressman Glass from Virginia sponsored the bill in the House. Owen led the debate in the Senate, and the bill was passed on December 18, 1913, by a vote of 54-34.

Owen had many other political victories, including the passage of the Child Labor Law of 1916, but retired in 1925. He remained in Washington, DC, as a lawyer and lobbyist, voicing his opinions on how to stimulate the economy throughout the Great Depression. Robert L. Owen died of surgical complications on July 19, 1947, at the age of 91. He is remembered as a respected and influential politician on a state and national level.

Robert L. Owen, 1907 (image courtesy of the Library of Congress).