Nelson W. Aldrich - Political Career

Political Career

Aldrich's first job was clerking for the largest wholesale grocer in the state, where he worked his way up to become a partner in the firm. On October 9, 1866 he married Abigail "Abby" Pearce Truman Chapman, a wealthy woman with impressive antecedents. By 1877, Nelson had a major effect on state politics, even before his election to the United States Congress. He served as the president of the Providence city council and Speaker of the Rhode Island House of Representatives.

In 1878 the Republican bosses of Rhode Island endorsed him for the US House of Representatives; in 1881 he was elected to the Senate. He served in the Senate from 1881 to 1911 as an influential Republican, becoming chairman of the Senate Finance Committee.

In 1906 Aldrich sold his interest in the Rhode Island street railway system to the New York, New Haven and Hartford Railroad, whose president was J. P. Morgan's loyal ally, Charles Sanger Mellen. Also in 1906 Aldrich and other American financiers invested heavily in mines and rubber in the Belgian Congo. They supported Belgium's King Leopold II, who had imposed slave labor conditions in the colony.

In 1907, J.P. Morgan published rumors that the Knickerbocker Trust Company was insolvent. Some later historians believe this was a deliberate act of market manipulation which precipitated the Panic of 1907, and consolidated the preeminence of the banks controlled by Morgan. The panic itself led to the passage of the Aldrich–Vreeland Act in 1908, which established the National Monetary Commission, sponsored and headed by Aldrich. After issuing a series of 30 reports, this commission drew up the Aldrich Plan, forming the basis for the Federal Reserve system.

As co-author of the Payne-Aldrich Tariff Act of 1909, Aldrich removed restrictive import duties on fine art, which enabled Americans to bring in very expensive European artworks that became the foundation of many leading museums.

In 1909, Aldrich introduced a constitutional amendment to establish an income tax, although he had declared a similar measure "communistic" a decade earlier.

He also served as chairman of the Senate Republican Conference. During his Senate tenure he chaired the committees on Finance, Transportation Routes to the Seaboard, Rules, and the Select Committee on Corporations Organized in the District of Columbia.

A deep believer in the progressive themes of efficiency and scientific expertise, Aldrich led a team of experts to study the European national banks. After his trip, he came to believe that Britain, Germany and France had a much superior central banking system. He worked with several key bankers and economists, including Paul Warburg, Abram Andrew and Henry Davison, to design a plan for an American central bank in 1911. In 1913 Woodrow Wilson signed into law the Federal Reserve Act, which was patterned after Aldrich's vision.

Because of his control of the Senate (and his daughter Abby Greene Aldrich's marriage to John D. Rockefeller, Jr., and son Winthrop Aldrich's later chairmanship of the Chase National Bank), Aldrich, who represented the smallest state in the Union, was regarded as one of the most powerful politicians of his time. His grandson and namesake Nelson Aldrich Rockefeller was Governor of New York, unsuccessfully attempted the Republican presidential nomination in 1960, 1964, and 1968, and was Vice President of the United States under President Gerald Ford.

Aldrich was very active in the Freemasons and was the Treasurer of the Grand Lodge of Rhode Island. He died on April 16, 1915, in New York, New York, and was buried in Swan Point Cemetery in Providence, Rhode Island. The Nelson W. Aldrich House on 110 Benevolent Street in Providence serves as the headquarters for the Rhode Island Historical Society.