Carter Glass, American publisher and politician, 47th United States Secretary of the Treasury (d. 1946)

Carter Glass (January 4, 1858 – May 28, 1946) was a highly influential American newspaper publisher and prominent Democratic politician hailing from Lynchburg, Virginia. His distinguished career in public service spanned both chambers of the U.S. Congress and included a pivotal term as the United States Secretary of the Treasury under President Woodrow Wilson. Glass is critically acclaimed for his instrumental contributions to the architecture of the modern U.S. financial regulatory system, playing a foundational role in the establishment of the Federal Reserve System and later, the Federal Deposit Insurance Corporation (FDIC).

Early Career, Controversial Policies, and Legislative Beginnings

Before his ascent to national politics, Carter Glass cultivated a successful career as a newspaper editor and publisher in Virginia. This background honed his communication skills and provided a platform for his political aspirations, leading to his election to the Senate of Virginia in 1899.

A significant, and often controversial, period of his early political life was his role as a delegate to the Virginia Constitutional Convention of 1902. During this convention, Glass emerged as an influential and ardent advocate for segregationist policies. Historian J. Douglas Smith starkly characterized him as “the architect of disenfranchisement in the Old Dominion,” referring to the systematic efforts to strip African Americans and many poor whites of their voting rights through measures like poll taxes, literacy tests, and grandfather clauses. This period cemented a complex legacy, intertwining his progressive leanings in fiscal policy with deeply regressive social views.

Despite his advocacy for these discriminatory policies, Glass also championed progressive fiscal and regulatory reforms. However, these contributions were often perceived as superficial, as he generally opposed the most far-reaching and expansive aspects of federal legislation. He later became a notable critic of President Franklin D. Roosevelt's New Deal policies, largely due to his steadfast belief in states' rights and limited federal intervention.

In 1902, Glass won election to the United States House of Representatives. His expertise in financial matters quickly became apparent, leading to his appointment as Chairman of the powerful House Committee on Banking and Currency in 1913. It was in this capacity, working closely with President Woodrow Wilson, that Glass spearheaded the passage of the landmark Federal Reserve Act. This crucial legislation, enacted in December 1913, established a decentralized central banking system for the United States, designed to provide stability to the nation's financial system, control monetary policy, and act as a lender of last resort to banks, addressing the recurring financial panics that had plagued the country.

Glass's distinguished service continued as he served as Secretary of the Treasury from 1918 until 1920, a period immediately following World War I, where he played a role in managing the nation's post-war finances. His tenure concluded when he accepted an appointment to represent Virginia in the United States Senate.

Senate Leadership and the Glass-Steagall Act

Carter Glass's career in the Senate was extensive, spanning from 1920 until his death in 1946. During this long period, he rose to significant positions of power, including becoming Chairman of the influential Senate Appropriations Committee in 1933, a role that granted him considerable influence over federal spending. He also served as president pro tempore of the Senate from 1941 to 1945, a senior position responsible for presiding over the Senate in the absence of the Vice President and placing him third in the line of succession to the presidency.

Perhaps his most enduring legacy in the financial sector is his co-sponsorship of the 1933 Banking Act, famously known as the Glass–Steagall Act. Enacted during the height of the Great Depression, this pivotal legislation was a direct response to widespread bank failures and a loss of public trust in the financial system. The Glass–Steagall Act introduced two fundamental reforms:

• It created the Federal Deposit Insurance Corporation (FDIC), an independent government agency established to insure deposits in U.S. banks. This measure was critical in restoring public confidence by guaranteeing that depositors' money would be safe even if a bank failed, thereby preventing devastating bank runs.
• It enforced a strict separation of commercial banking (accepting deposits and making loans) and investment banking (underwriting securities and stock brokerage). This separation aimed to prevent conflicts of interest and reduce the speculative risks that were believed to have contributed to the financial instability of the era.

Despite his significant contributions to federal financial regulation, Glass remained an ardent supporter of states' rights and a staunch conservative. This philosophy often put him at odds with President Franklin D. Roosevelt's expansive New Deal programs, which he viewed as an overreach of federal power. Glass vocally opposed much of the New Deal legislation and famously clashed with Roosevelt, particularly over the control of federal appointments within Virginia, illustrating his unwavering commitment to his political principles.

Frequently Asked Questions About Carter Glass

Who was Carter Glass?

Carter Glass was an influential American politician from Virginia, a newspaper publisher, and a Democratic statesman who served in both the U.S. House of Representatives and the U.S. Senate. He also held the position of U.S. Secretary of the Treasury under President Woodrow Wilson and was a principal architect of the modern U.S. financial system.

What was Carter Glass's role in establishing the Federal Reserve System?

As Chairman of the House Committee on Banking and Currency, Carter Glass was the primary legislative force behind the Federal Reserve Act of 1913. He worked closely with President Woodrow Wilson to shepherd the bill through Congress, establishing the central banking system that remains vital to the U.S. economy today.

What is the significance of the Glass–Steagall Act?

The Glass–Steagall Act (officially the 1933 Banking Act), co-sponsored by Carter Glass, was a landmark piece of legislation enacted during the Great Depression. It created the Federal Deposit Insurance Corporation (FDIC) to insure bank deposits and implemented a crucial separation between commercial banking and investment banking to prevent speculative risks and conflicts of interest that contributed to the financial crisis.

Why is Carter Glass considered a controversial figure?

While lauded for his financial reforms, Carter Glass's legacy is controversial due to his role as a leading advocate for segregationist policies and the disenfranchisement of African Americans at the Virginia Constitutional Convention of 1902. His social views were deeply conservative and stood in stark contrast to his progressive efforts in economic policy.

What was Carter Glass's stance on the New Deal?

Carter Glass was a prominent critic of President Franklin D. Roosevelt's New Deal programs. As an ardent supporter of states' rights and limited federal government, he viewed many New Deal initiatives as an overreach of federal power and opposed them on philosophical grounds, often clashing with Roosevelt.