March 15, 1913
Until 1913, the Senate operated without a banking committee. Unlike the House of Representatives, which had created its own banking panel in 1865, the Senate chose to refer banking and currency legislation to its Committee on Finance. When the Senate finally made its move on March 15, 1913, the two most responsible forces were Oklahoma senator Robert Owen and that year's pending Federal Reserve Act.
Six years earlier, in 1907, Robert Owen had became one of Oklahoma's first two senators and, with Charles Curtis of Kansas, one of the Senate's first two members of Native American descent. In his early 20s Owen had moved with his mother from his native Virginia to live with her family in the Indian Territory's Cherokee Nation. He earned a law degree in the 1880s, became a federal Indian agent, and helped secure citizenship for residents of the Indian Territory, which was located adjacent to the Oklahoma Territory. He also successfully lobbied Congress to extend the provisions of the National Banking Act to the Indian Territory and organized a bank in Muskogee in 1890.
Owen was a natural choice to become one of Oklahoma's first senators. A Progressive Democrat, he focused on national banking policy. Owen was particularly interested in creating an elastic system of currency to help the nation absorb the shock of financial panics such as the one that had occurred during his first year in the Senate.
Over the six years following the 1907 economic crisis, leaders in both houses of Congress became convinced of the need for a system to prevent a few large New York banks from controlling the vast majority of the nation's financial assets. A February 1913 House report on this dangerous concentration of wealth and influence finally led the Senate to conclude that it needed the full-time expertise of a separate committee on banking.
When Congress convened under Democratic control in March 1913, with a newly inaugurated Democratic president in the White House, pressures built for passage of legislation to create the Federal Reserve System. As a tireless sponsor of that legislation, Robert Owen became the new Senate Banking Committee's first chairman. With the aid of his House counterpart and President Woodrow Wilson, Owen overcame powerful opposing forces to secure passage of the Federal Reserve Act. His major substantive contribution to that act was its provision that the United States government, rather than the banks, would control the Federal Reserve Board.