After PresidentWilson convinced just enough Democrats to defeat an amendment put forth by bank president Frank A. Vanderlip that would have given private banks greater control over the central banking system, the Senate voted 54–34 to approve the Federal Reserve Act. Wilson signed the bill into law in December 1913. The president appointed Paul Warburg and other prominent bankers to direct the new system. While power was supposed to be decentralized, the New York branch dominated the Federal Reserve as the 'first among equals.' The new system began operations in 1915, and it played an important role in financing the Allied and American war effort in World War I.
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