Editing Woodrow Wilson (section)

==== Federal Reserve System ====
{{see also|History of the Federal Reserve System}}
[[File:Federal Reserve Districts Map - Banks & Branches.png|thumb|Map of Federal Reserve Districts with Federal Reserve banks (in black circles), District branches (in black squares), and the Federal Reserve's national headquarters in red]]
Wilson did not wait to complete the Revenue Act of 1913 before proceeding to the next item on his agenda—banking. By the time Wilson took office, countries like Britain and Germany had established government-run [[central bank]]s, but the United States had not had a central bank since the [[Bank War]] of the 1830s.<ref>Cooper (2009), pp. 219–220</ref> In the aftermath of the [[Panic of 1907|nationwide financial crisis in 1907]], there was general agreement to create some sort of central banking system to provide a more elastic currency and to coordinate responses to financial panics. Wilson sought a middle ground between progressives such as Bryan and conservative Republicans like [[Nelson Aldrich]], who, as chairman of the [[National Monetary Commission]], had put forward a plan for a central bank that would give private financial interests a large degree of control over the monetary system.<ref>Clements (1992), pp. 40–42</ref> Wilson declared that the banking system must be "public not private, [and] must be vested in the government itself so that the banks must be the instruments, not the masters, of business."<ref>Heckscher (1991), pp. 316–317</ref>

Democrats crafted a compromise plan in which private banks would control twelve regional [[Federal Reserve Bank]]s, but a controlling interest in the system was placed in a central board filled with presidential appointees. Wilson convinced Democrats on the left that the new plan met their demands.<ref>Link (1954), pp. 43–53</ref> Finally the Senate voted 54–34 to approve the [[Federal Reserve Act]].<ref>Clements (1992), pp. 42–44</ref> The new system began operations in 1915, and it played a key role in financing the Allied and American war efforts in World War I.<ref>Link (1956), pp. 199–240</ref>