This paper examines how the election of 1912 changed the makeup of Congress and led to the Federal Reserve Act. The decision of Theodore Roosevelt and other Progressives to run as third-party candidates split the Republican Party and enabled Democrats to capture the White House and Congress. We show that the election produced a less polarized Congress and that newly-elected members were more likely to support the act. Absent their interparty split, Republicans would likely have held the White House and Congress, and any legislation to establish a central bank would have been unlikely or certainly quite different.
https://doi.org/10.20955/wp.2023.008
follow @stlouisfed