ABSTRACT
The movement toward banking concentration, cooperation and self-regulation had its political counterpart in a bill that Senator Nelson W. Aldrich's National Monetary Commission reported to Congress on January 8, 1912. The Aldrich Plan proposed the most sweeping and comprehensive reformation of the banking system since the Civil War. It was a compromise between La Salle Street's laissez-faire call to remove the government from banking and Wall Street's Hamiltonian vision of a more organized and centralized banking system. Aldrich fused two financial traditions into a plan for a centralized system that bankers controlled. Despite this impressive achievement, the movement for banking self-regulation and the Aldrich Plan rested upon no secure political foundation. During the life of the National Monetary Commission, Republican party unity evaporated over regulatory issues as western insurgents and progressives mounted a campaign directed toward President William Howard Taft, Aldrich and the eastern wing of the party. The rapprochement between La Salle Street and Wall Street was not complete because of lingering suspicions and distrust among the bankers. More importantly, the Aldrich Plan for a centralized banking system with minimal government control defied the Progressive Era's central thrust toward greater public accountability of business practices and an enlarged federal regulatory role in the economy.
