- How the Midwest Shaped the Way We BankEarly Twentieth-Century Banking Politics
Banking and monetary issues occupy a prominent place in midwestern political history. Narratives of the region's nineteenth-century politics have long recounted the financial reform agendas of the Greenbacker and Populist movements. Yet the "money question" included broader concerns that remained at the center of progressive and populistic politics in the Midwest into the 1940s. My research on banking politics in Money, Power, and the People: The American Struggle to Make Banking Democratic reveals the previously neglected campaigns of workers and farmers for financial reform during the early twentieth century.1 Although grassroots banking politics existed nationwide, this political force was particularly robust in the Midwest. Ordinary citizens sought a banking system that prioritized security, affordable credit, and stability. Their efforts were key to the creation of such cornerstones of the financial world as the Federal Reserve System, Federal Deposit Insurance Corporation, and Farm Credit System.2
With the largest population of any region from 1900 to 1930, the Midwest was vital to the success of banking politics.3 Many of the most important leaders who confronted the "money question" in the early twentieth century were Midwesterners. William Jennings Bryan, a Nebraskan who had been born and raised in Illinois, was the most important midwestern political figure of the turn of the century. History textbooks record that Bryan emphasized the deficiencies of the gold standard in his unsuccessful presidential campaign on the 1896 Democratic ticket, but his later efforts to secure financial reform are generally forgotten. Bryan went on to influentially [End Page 135] champion a number of banking reforms during the first two decades of the twentieth century. Notably, he was a pioneering advocate of governmentguaranteed bank deposits, which was a dominant issue of his 1908 presidential campaign in a number of midwestern states and ultimately came to fruition with the 1934 establishment of the FDIC.4
On the other side of the partisan divide, the leading midwestern Republican of the Progressive Era was an outspoken opponent of financial monopoly. Robert M. La Follette Sr., who served Wisconsin as both governor and U.S. senator, was a preeminent critic of the power exercised by the "money trust" of large banks and other financial institutions centered in Wall Street.5 Meanwhile, probably the contemporary member of Congress who investigated financial policy questions most avidly was Representative Charles A. Lindbergh Sr., a Republican from Little Falls, Minnesota. Father of the famed aviator, Lindbergh was a prominent critic of financial monopoly who successfully spearheaded the push that resulted in the 1912 congressional money trust investigation that encouraged the establishment of the Federal Reserve System.6
Banking politics flourished during the Great Depression, with midwestern political leaders once again playing prominent roles. One of the signature issues of Representative William Lemke—a Republican from North Dakota—was the Bank of the United States—a proposed federal government-owned and -operated central bank modeled on the stateowned and -operated Bank of North Dakota. The state bank in North Dakota was the creation of the Nonpartisan League that swept to power in 1918 thanks to the support of farmers. In a nation where the banking system was generally privately owned, Lemke wanted to use the alternative example that the Bank of North Dakota offered as a blueprint for the entire nation.7 Lemke achieved a national platform in 1936 as the presidential nominee of the Union Party, which was largely the creation of the "radio priest" Charles E. Coughlin—now mainly remembered for his later anti-Semitic views—who had a large audience in midwestern cities. At his peak of influence prior to 1936, this Catholic parish priest in suburban Detroit received so many letters from supporters that he employed more than a hundred mail clerks. His popular appeal owed much to his advocacy of financial measures that included monetary reforms and government banking.8
Figures like Bryan, La Follette, Lindbergh, Lemke, and Coughlin reflected the strong public support for financial reform in the Midwest. The banking system that midwestern farmers and workers knew in the early [End Page 136] twentieth century was a source of significant...