Carter Glass, a white southern politician in the age of Jim Crow, was an ardent racist and apologist for segregation, but he was much more than that. A self-made man who became an influential newspaper editor in his hometown of Lynchburg, Virginia, Glass educated himself on all matters fiscal. As a longtime United States senator representing Virginia, he co-authored two major statutes involving financial regulations. The Glass-Owen Federal Reserve Act of 1913, which bears his name, created the Federal Reserve System. Twenty years later, he co-sponsored the U.S. Banking Act of 1933, commonly known as the Glass-Steagall Banking Act, which separated the activities of banks and securities firms. The law also created the Federal Deposit Insurance Corporation (FDIC). Glass served as secretary of the treasury for slightly more than a year under President Woodrow Wilson. I discuss Glass’ life and career in my recently-published book, Congressional Lions.
He was born in Lynchburg, Virginia, on January 4, 1858. In the words of one commentator, “he came of a family of small means and forged his career by his own effort and ability.” His mother died when he was two years old, leaving the boy to be raised by a sister, Nannie, who was a full decade older than he. His father, Robert Henry Glass, later remarried and produced seven additional children. Carter’s younger half-sister, Meta Glass, eventually became president of Sweet Briar College, a women’s liberal arts school.
At the end of the Civil War in 1865, the Glass family was destitute. Robert Glass had served as a Confederate officer and survived the fighting, but he had no money to educate his children. Consequently, young Carter attended school only sporadically after the age of 13. His father was a great lover of books, however, and he maintained a voluminous library. The lack of a formal education did not deter Carter Glass from immersing himself in books. He would compensate for his poor schooling by teaching himself about the world of ideas. Even at an early age, he was interested in finance.
Desperate to earn wages and pull himself out of poverty, the boy became a printer’s assistant at the newspaper he would one day purchase. Carter also worked for his father. As he grew and gained experience, he became a reporter, editor, and eventually publisher, learning the newspaper business thoroughly. He also worked briefly for former Confederate General (and future United States Senator) William Mahone on the Atlantic, Mississippi, and Ohio Railroad.
As an adult, Glass became a well-known newspaperman. He also joined the Virginia Democratic Party. Having emerged as a leader in his community, Glass campaigned for a seat in the Virginia State Senate in 1899. He won. A progressive politician on matters other than race, Glass supported measures to modernize his state, especially those that protected rural inhabitants and small farmers. As a delegate to the state constitutional convention in 1901 and 1902, he pushed for the creation of the Virginia State Corporation Commission to regulate corporations, notably railroads. Progressives believed that curbing the power of large companies would benefit working class citizens by protecting them from price gouging and unfair labor practices.
Glass distinguished himself at the constitutional convention as a segregationist of the first order. He and his fellow delegates understood that a major purpose of the convention was to amend the state constitution to disenfranchise blacks without overtly violating the Fifteenth Amendment of the United States Constitution, which allowed black men to vote. To accomplish this goal, the drafters established poll taxes for all voters unless they could pass a literacy test. The constitution provided for several exemptions. Military veterans and the sons of military veterans did not have to pay the tax. A grandfather clause decreed that anyone whose ancestor voted could forgo paying the tax. As expected, the revised constitution effectively excluded blacks from voting as well as serving on juries (because jurors were selected from voting rolls). Racial segregation in public schools, already a well-established, de facto practice, was legalized in the new constitution, providing for a de jure educational system that required Negroes to know their place, and stay there.
Glass’s leadership at the convention transformed him into an important symbol of white supremacy in Virginia, and he used his new-found prominence to seek higher office. In 1902, he won a seat in the United States House of Representatives representing the Sixth Congressional District. He served for 16 years. In 1913, Glass became chairman of the House Committee on Banking and Currency. He was well-positioned to assist another influential southern progressive, the incoming president of the United States, Woodrow Wilson.
Wilson had campaigned for office as a progressive. Among his many promises was a pledge to reform the nation’s currency system. The new president found a kindred spirit in Carter Glass. As one observer described it, “[t]hroughout the Wilson Administration, Mr. Glass warmly supported the President.” One result of the partnership was enactment of Glass-Owen law, or the Federal Reserve Act of 1913, a landmark statute sponsored by Glass in the House and Robert Latham Owen of Oklahoma in the Senate.
President Wilson unquestionably was the father and greatest champion of the Federal Reserve Act, but Congressman Glass was instrumental in pushing it through his House committee. Everyone, especially Wilson, recognized Glass’ expertise in financial matters, and they deferred to his judgment on innumerable statutory details. It was not surprising, therefore, that Wilson tapped Glass to become his secretary of the treasury in December 1918. William Gibbs McAdoo, Wilson’s son-in-law and first treasury secretary, announced his resignation shortly after the execution of the armistice that ended the Great War. One scholar observed that “after years of public service, McAdoo was exhausted and so were his financial assets.” He went off to try his hand in the private sector, leaving the president to find a replacement. Glass was a natural choice.
He served for slightly more than a year, from December 16, 1918, until February 1, 1920. Although his stint in the cabinet was short, Glass governed during a propitious time. With the war concluded and American servicemen returning home to seek mostly private-sector employment, the economy was in turmoil. Price controls and rationing had been in place during the war, but the administration released the controls following the armistice. As a result, consumers rapidly purchased goods that had been denied them in preceding years. Inflation soared.
The Wilson administration had not adequately prepared for demobilization, and it never responded effectively to multiple financial crises. For his part, Glass focused on consolidating the national debt incurred during the war, which had ballooned from 2.5 percent to 32.5 percent of gross domestic production. He oversaw the marketing of $5 billion in Victory Liberty loan bonds, which helped to pay off wartime expenses. Glass also pushed the administration to provide financial assistance to war-torn Europe to rebuild after the war. He demonstrated remarkable prescience when he raised concerns about frenzied borrowing by investors engaged in stock market speculation. Fearful that unregulated borrowing might lead to a stock market overvaluation and an eventual crash, he expressed his desire for banks to restrict lending for stock market purchases. When the market crashed in 1929, Glass’ fears were realized.
He left the Treasury Department early in 1920 to fill a vacancy in the United States Senate following the death of Virginia’s senior senator, Thomas Staples Martin, in November 1919. Appointed to serve out Martin’s Senate term, Glass decided that the Senate was much to his liking. He repeatedly stood for reelection and won, eventually serving in the Senate for the rest of his life—more than a quarter of a century.
Glass enjoyed considerable prestige as a senator. He was known and sometimes revered for his extraordinary diligence as well as his expertise in fiscal and monetary policies. During the 1920 Democratic National Convention in San Francisco, he was nominated for president as a favorite son of Virginia. He also won the ear of presidents who sought his counsel on fiscal matters. In 1933, President Franklin D. Roosevelt even offered Glass the treasury post to help address the financial crisis that triggered the Great Depression. Glass declined, citing poor health. He also believed that he could perform a greater service for the Democrats from his lofty position in the Senate. No doubt he was correct. It is difficult to envision the two strong-willed, but very different personalities working together. FDR, the northern patrician with a desire to expand federal power, and Carter Glass, the feisty, self-made southerner who was philosophically opposed to Roosevelt’s political positions, would have clashed repeatedly.
Despite his general aversion to FDR’s New Deal programs, Glass embraced at least one part of FDR’s agenda. The senator recognized the need for emergency banking legislation after Roosevelt was sworn in, and he agreed to help craft a plan in Congress. As chairman of the Appropriations Committee as well as the de facto head of the Banking and Currency Committee, Glass was a pivotal actor in the Senate. Along with Congressman Henry Steagall, an Alabama Democrat, Glass worked on legislation that eventually passed as the Banking Act of 1933. The law was designed “to provide for the safer and more effective use of the assets of banks, to regulate interbank control, to prevent the undue diversion of funds into speculative operations, and for other purposes.” President Roosevelt signed the measure into law on June 16, 1933.
Glass-Steagall was hailed as one step among many on the road to developing a stronger banking system and stimulating a robust economic recovery. The separation between commercial and investment banking would later provoke fierce debate—eventually leading to a repeal of the bifurcation in the Gramm-Leach-Bliley Act of 1999—but it was mostly met with widespread public approval during the 1930s. The law arguably became, along with the Federal Reserve Act of 1913, Carter Glass’ claim to everlasting fame as a legislator.
His accomplishments were not limited to the financial arena. From 1941 until 1945, just as the United States entered and fought World War II, Glass served as president pro tempore of the U.S. Senate. During his time, the Senate established the tradition of selecting the longest serving senator of the majority party as president pro tempore. Glass also served on the powerful Senate Foreign Relations Committee, making him a genuine Washington power broker.
Glass’s health began to fail in the 1940s. Mary Scott, his second wife, increasingly cared for him as he raced through his eighties. He had been married previously, but his first wife, Aurelia McDearmon Caldwell, a school teacher, had died in 1937. In 1940, Glass, then 82 years old, married Mary. He probably should have resigned from the Senate in 1942—he seldom ventured out of his house to take part in Senate meetings or debates—but he refused. Although he was in effect an absentee member, he stubbornly resisted calls for his retirement. Glass was still a senator when he died of congestive heart failure at the age of 88 on May 28, 1946, in Washington, D.C.
He left behind a mixed legacy. On one hand, Glass was the architect of some of the most important financial bills enacted by the twentieth century Congress. His power and influence helped to shape national policy for more than four decades. A New York Times editorial commented on his death that the physically diminutive senator “was the oldest and smallest member of the Senate, but he will be remembered as one of its biggest figures.”
On the other hand, Glass was, in Franklin Roosevelt’s words, an “unreconstructed rebel.” That same New York Times editorial observed that he “was born in another age, before the War Between the States.” As a southerner reared in the age of Jim Crow, he accepted without debate the efficacy—indeed the wisdom—of segregation. A thoroughgoing racist at a time when such sentiments were widely accepted, Carter Glass no longer commands the respect and admiration that he did during his era. He remains a noteworthy public figure because of his undeniable legislative achievements even as his outdated social views inspire disgust and condemnation.