Birth of the Fed

Birth of the Fed

Historic Jekyll Island Club

The secret expedition that formed America’s central bank

By Scott Freeman

Just before Thanksgiving in 1910, U.S. senator Nelson Aldrich of Rhode Island invited six members of America’s banking elite to a covert retreat on Jekyll Island. This was before the first transcontinental call (placed by the president of AT&T from a phone on Jekyll in 1915). It was before the internet and cable news. Secrets could be taken to the island and secrets would stay there.

Senator Nelson Aldrich

Wishing to avoid public scrutiny and pesky reporters, the group—dubbed the “First Name Club” because no one used last names during the rail trip down—agreed on the cover of a gentlemen’s duck hunt. (One attendee even toted a borrowed shotgun.) Instead, they holed up for nine days at the Jekyll Island Clubhouse to discuss how to prevent another Panic of 1907, when a run on banks nearly collapsed the United States economy. J.P. Morgan (a Jekyll Club member) personally bailed out banks, New York City, and the New York Stock Exchange.

Out of those clandestine meetings emerged a draft of legislation that would eventually form the Federal Reserve Banking System, the country’s central bank network and a financial safety net that remains in place today. “It was absolutely an epoch-making event,” says the Jekyll Island Museum’s Andrea Marroquin. The reward for their labors? A robust Thanksgiving feast and a day off for that duck hunt.

This article first appeared in Volume 1 Number 2 of 31•81, the Magazine of Jekyll Island.

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