MO Trivia: The Politics of Fed District Banks
Blogging today from the Kansas City airport, with some Missouri history trivia.
Q: When the 12 Federal Reserve districts were configured in 1914, how did the one state of Missouri get two Federal Reserve district banks (St. Louis and Kansas City), while most states (e.g. Iowa, Florida, Arizona, Washington, Colorado, S. Carolina, Indiana, Wisconsin, etc.) got none (see map above of the 12 Fed districts, click to enlarge)?
A: Good old, good ol' boy politics explains it. Missouri had enormous political influence in the Democratic Wilson (1913-1921) Administration when the Fed was created, and the 12 districts were decided. The Speaker of the House, Champ Clark (D), was from Missouri. Senator James Reed (D), from Kansas City, was a very powerful member of the Senate Banking Committee and was originally opposed to the bill to create the Federal Reserve System. And the Secretary of Agriculture David F. Houston, one of the three members of the Federal Reserve Bank Organization Committee, was from St. Louis. With all of that political clout, Missouri was the only state in the country to get two Fed district banks.