Early Years and Personal Life
Glass was born in Lynchburg on January 4, 1858, the fourth of Robert Henry Glass and Augusta Elizabeth Christian Glass’s five children. Glass’s mother died when he was two; his father remarried and had seven more children. Robert Henry Glass edited several newspapers and served as a major in the Confederate army during the(1861–1865). Carter Glass had a vivid memory of ‘s , and was a staunch defender of the South, the , and .
Glass left school in his early teens to enter the newspaper business. He started as a printer’s apprentice and then moved up through the ranks to become a reporter for the Lynchburg News in 1880. By 1887 he was the paper’s editor. A year later, with help from a relative, he bought the paper and became its publisher as well. Next he bought out the rival paper, the Lynchburg Advance, then edited by his father, and consolidated the two papers. He established a reputation for provocative editorials, challenging those with opposing political views; on one occasion he was nearly shot by the wife of one of his critics.
In 1886 he married Aurelia Caldwell and they had four children. She died in 1937. In 1940, at age eighty-two, Glass married Mary Scott Meade. He was a lifelong Methodist, a member of the Masons and Elks, and raised Jersey cattle on his farm at Montview, in Lynchburg.
Early Political Career
Glass began his years of public service in 1881 with an appointment as clerk of the Lynchburg city council. In 1898 he was elected to the Senate of Virginia. His politics were strictly Democratic, but his disgust with corruption propelled him into the reform, or independent, wing of the party that was challenging the power of the Democratic political machine headed by longtime U.S. senator. Glass always manifested a strong individualistic ethic that condemned any interference with a free political and economic order, whether by government or political machine. At five feet four inches tall and 100 pounds, he compensated for his diminutive size with a ready wit, a combative personality, and a caustic tongue that spared no feelings. Yet he was easily offended by any criticism of his positions, and often responded vindictively and meanly.
Constitutional Convention of 1900–1901
In 1902 Glass was appointed to fill the vacancy in the U.S. House of Representatives left by the death of Peter J. Otey, of the Sixth District. Glass was elected to a full term that same year and served the district for the next sixteen years. Although not an active legislator, Glass was placed on the Banking and Currency Committee. He professed ignorance about economics but schooled himself in its intricacies and became an acknowledged authority on the subject. In 1911 he challenged, the former governor and machine stalwart, for Swanson’s U.S. Senate seat, but he lost in a hotly contested Democratic primary.
The Federal Reserve Act
The 1912 presidential election brought to the office Woodrow Wilson, a man withcredentials and with whom Glass could identify. One of Wilson’s prime objectives was to reform the nation’s banking system, which was antiquated and ineffective in dealing with a modern industrial economy. A recent banking panic had confirmed the instability of the nation’s economy, which had been in recession or depression for half of the previous forty years. As head of a banking subcommittee authorized to write new legislation, Glass turned to Henry Parker Willis, an economics professor at Washington and Lee University, for assistance. Together they proposed a system of regional private reserve banks controlled by the banking industry.
Throughout 1913, Glass worked to reconcile his proposed system with the competing desires of the banking industry, which recognized the need for change but preferred the creation of a central bank; Progressives, who insisted on government control of the new banking system based on their distrust of Wall Street and the “money trust”; and Rural Populists, led by William Jennings Bryan, who also rejected private control and demanded short-term agricultural credits for their constituents. Glass held subcommittee hearings and met frequently with Wilson, bankers, and politicians. Wilson eventually sided with the Progressives and insisted on a supervisory government board for the regional banks with government backing of the reserve notes. Although this was not to Glass’s liking, he incorporated the president’s ideas in his bill.
The Federal Reserve Act passed late in 1913. It created what later became known as the Federal Reserve System, or the Fed: a system of twelve regional banks that are privately owned and operated but regulated and supervised by the Federal Reserve Board, the members of which are appointed by the president. (One of those banks was placed in Richmond, which won out over Baltimore, perhaps because of Glass’s influence.) The new system brought some order to the nation’s economy, but the final compromises and vague language left it woefully short of the authority it needed to prevent the Great Depression. Nonetheless, Glass’s Federal Reserve Act was a monumental piece of legislation.
Secretary of the Treasury
Wilson appointed Glass secretary of the treasury in December 1918, a result of Glass’s friendship with the president and his familiarity with the nation’s finances. As secretary, Glass was preoccupied with paying for the costs of World War I (1914–1918) and dealing with foreign loans and taxes. The experience strengthened his commitment to international involvement for America, and he supported the Treaty of Versailles negotiated by Wilson. He lobbied the president to make changes to the treaty, favoring compromises to ensure its passage in the Senate, but Wilson refused and the treaty failed to win the necessary two-thirds Senate approval.
Only days before that vote, Governorhad appointed Glass to fill the term of the recently deceased U.S. senator Thomas Staples Martin. Davis hoped that Glass would become his ally against the Democratic political machine, but Glass had grown tired of struggling with Martin and Swanson. When state party leaders offered several olive branches—nomination for president by Virginia delegates at the 1920 Democratic National Convention, no opposition when he ran for the remainder of Martin’s term that autumn, and Swanson’s support for key Senate committee assignments—Glass accepted, entering into a mutually supportive relationship with the machine that lasted until his death. (Martin’s machine later transformed into what became known as the .) It was a simple matter of deciding which of the competing factions could best secure his political future.
In 1924 Glass again received support from Virginia delegates for the Democratic Party’s presidential nomination. This time his chances were much improved: the two front-runners for the nomination, William G. McAdoo, of California, and Alfred E. Smith, of New York, were in a virtual deadlock. Glass hoped that a shift of Virginia delegates to McAdoo would be reciprocated once it became clear the deadlock could not be broken, but Harry F. Byrd Sr., the new state chairman, refused to release Virginia’s votes. Finally on the 103rd ballot, the weary delegates voted for John W. Davis, of. Glass believed that Byrd’s strategy cost him the nomination, but he held no grudges, instead commending Byrd for his loyalty. In the 1928 presidential campaign, Glass supported Smith’s candidacy. Although Glass disagreed with Smith’s opposition to the national prohibition of alcohol, he recoiled at other Democrats’ attacks on Smith’s Catholicism.
The Glass-Steagall Bills
Throughout the 1920s Glass worried that the Federal Reserve System was not utilizing its powers to regulate the economy, first during the postwar recessions and then during the stock market speculation later in the decade, which the Fed was fueling with its easy credit policy. Thousands of banks failed during the 1920s, most of them small state banks that did not belong to the reserve system. Glass wanted to move more banks into the system and strengthen the Board’s ability to control speculative credit. The stock market crash of 1929 and the subsequent depression presented the opportunity to achieve his reforms.
To confront the banking crisis, Congress passed the first Glass-Steagall bill in February 1932 (the bill’s co-author, Henry Steagall, of Alabama, was chairman of the House Banking Committee). The act expanded the Federal Reserve’s capacity to increase bank reserves, but banks declined to use the money to provide loans to desperate businesses and the act had little effect on the continuing crisis.
The second Glass-Steagall bill passed a year later and had a much more significant impact on the nation’s economic order. In 1931–1932, Glass’s subcommittee of the Senate Banking and Currency Committee held hearings on the causes of the crash and the need for structural changes in the banking system. The result was legislation that incorporated most of Glass’s ideas for rejuvenating the Fed—nationwide branch banking, greater control over speculative credit, and a separation of banks’ investment affiliates from their commercial or deposit operations. After a year of contentious debate, during which hundreds of banks failed, the Glass bill passed the Senate in January 1933, but died in the House over the issue of guaranteed bank deposits.
The election of President Franklin D. Roosevelt, the revelations of the Senate investigation into stock market speculation by banks (the so-called Pecora investigation), and the worsening depression revived interest in the Glass bill. The hang-up once again was government guarantee of deposits, which Representative Steagall had included in his bill. Although Roosevelt and Glass opposed such a measure, they eventually conceded the popularity of the issue and agreed to a graduated, less-than-100 percent insurance plan to be underwritten by a new Federal Deposit Insurance Corporation (FDIC). The final bill, significantly amended to appease the small bank constituency, passed in June 1933. Although it fell short of Glass’s hopes for a more comprehensive Federal Reserve System, much of it endured to the end of the century, a tribute to his perseverance.
Glass and FDR
By virtue of his chairmanship of the Senate Appropriations Committee, Glass remained a force in subsequent discussions of economic legislation, but he fell out of favor with Roosevelt and so lost influence. The rift began when he refused the president’s offer to return as secretary of the treasury. Glass had supported Roosevelt in the 1932 election, but he began to have doubts about the president-elect’s positions on the currency and the gold standard. Glass declined the appointment, citing health considerations and the wishes of his constituents, but most likely he correctly surmised that he and the president would disagree on monetary issues.
This rift turned into a chasm when Roosevelt proposed a series of programs, known collectively as the New Deal, meant to address the problems created by the Great Depression. Claiming that “Roosevelt is driving this country to destruction faster than it has ever moved before,” Glass voted against almost every measure advanced by the president, including the Agricultural Adjustment Act, public works programs, social security, and the Wagner Labor Act. Responding to the National Recovery Administration’s efforts to revive the economy, Glass refused to place its symbol—a blue eagle—on the masthead of his Lynchburg newspaper as required by federal code, calling it a “blue buzzard.” Glass was particularly incensed when the president took the country off the gold standard. He likely influenced his new Senate colleague, Harry F. Byrd, to join him in dissent. The two became identified as leaders of an anti–New Deal coalition. The Virginia Federation of Labor labeled them “anti anything.”
Not wanting to unduly antagonize Virginia’s senior senator, Roosevelt remained on reasonably friendly terms with Glass. He called him an “unreconstructed rebel,” a label Glass wore with pride. Glass supported Roosevelt’s reelection in 1936, but that autumn wrote to Byrd, “I hate the New Deal just as much as I ever did and have not the remotest idea of making any speeches for it.” The conservative coalition of which he and Byrd were part thwarted much of the president’s program in his second term. Glass led the fight to obstruct Roosevelt’s nominee for a federal judgeship in the western district of Virginia, calling the president’s choice “personally offensive” because it disregarded Glass’s recommendations. The senator opposed Roosevelt’s bid for a third term, even delivering the nominating speech for James Farley at the 1940 Democratic convention.
Roosevelt’s and Glass’s relationship softened with the onset of World War II. Ever the internationalist, Glass believed the United States should forcefully deal with the aggression of Nazi Germany. He endorsed repeal of the Neutrality Act of 1939 and he pushed through Roosevelt’s requests for rearmament. Having to battle the isolationists, Roosevelt appreciated Glass’s support.
Glass suffered from a weak physical constitution throughout his life, and ill health marred his final years in office. Although he was elected president pro tempore of the Senate in July 1941, he never answered a Senate roll call after June 1942. After he won reelection that year, efforts to persuade him to resign proved fruitless. For four years theeffectively had only one senator, Byrd, who did not have the heart to ask his colleague to step down. Glass died in Washington, D.C., on May 28, 1946. He was buried in Spring Hill Cemetery in Lynchburg.