Nelson W. Aldrich

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Lore & Background

After the Panic of 1907, Aldrich led the passage of the Aldrich–Vreeland Act in 1908, which established the National Monetary Commission, sponsored and headed by Aldrich. The commission issued a series of 30 reports and drew up the Aldrich Plan, forming the basis for the Federal Reserve system. In November 1910, Aldrich organized a secret meeting on Jekyll Island with leading members of the financial sector, including members of J.P. Morgan and Paul Warburg, to draft legislation for a central bank. Due to the unpopularity of a central bank, Aldrich recommended the members conceal their identities, advising the bankers to dress as duck hunters and address each other only by first name. The Federal Reserve Act of 1913, signed into law by Woodrow Wilson, was patterned after Aldrich's vision, creating the modern Federal Reserve System. The Jekyll Island meeting was not disclosed until 1930. Aldrich also sponsored the Sixteenth Amendment, which allowed for a direct federal income tax, though he had declared a similar measure "communistic" a decade earlier and was candid about using the amendment to block a House bill.

Reader's Guide

Nelson W. Aldrich was a central figure in American politics and finance during the late 19th and early 20th centuries. As a Republican senator from Rhode Island for 30 years from 1881 to 1911, he was part of the "Big Four" that controlled the Senate and used his chairmanship of the Finance Committee to dominate tariff and monetary policy. His sponsorship of the Payne–Aldrich Tariff Act of 1909 and the Aldrich–Vreeland Act of 1908, along with his leadership of the National Monetary Commission, directly shaped the nation's economic framework. The Aldrich Plan, developed after studying European national banks and refined in a secret meeting on Jekyll Island, provided the blueprint for the Federal Reserve Act of 1913. Aldrich also introduced the constitutional amendment for a federal income tax in 1909, though he did so to defeat a House bill, and the amendment was later ratified. His legacy is complex: he was deeply committed to the efficiency model of the Progressive Era, but reformers denounced him as representative of the evils of big business. His daughter Abigail married John D. Rockefeller Jr., and his descendants, including namesake Nelson A. Rockefeller, became powerful figures in American politics and banking.

Did You Know?

• Aldrich served briefly in the Union Army during the American Civil War, enlisting as a private in Company D of the 10th Rhode Island Infantry on May 26, 1862, and serving for three months at Fort DeRussy.
• He was the longest-serving United States Senator from Rhode Island before the 36-year tenure of Claiborne Pell in the late 20th century.
• In 1906, Aldrich and other American financiers invested heavily in mines and rubber in the Belgian Congo, supporting King Leopold II.
• Aldrich removed restrictive import duties on fine art as co-author of the Payne–Aldrich Tariff Act of 1909, enabling Americans to bring in expensive European artworks that became the foundation of many leading museums.
• The Jekyll Island meeting in November 1910 was kept secret until 1930, when Senator Carter Glass's claim of credit for the Federal Reserve's structure prompted rebuttals from Warburg and other banking experts.

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