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The Aldrich–Vreeland Act was passed in response to the Panic of 1907 and established the National Monetary Commission, which recommended the Federal Reserve Act of 1913.
The Act allowed national banks to start national currency associations in groups of ten or more , with at least $5 million in total capital, to issue emergency currency. These bank notes were not to be backed by just government bonds, but also just about any securities the banks were holding. The act proposed that the Comptroller of the Currency who distributed this emergency currency had to go through a process of approval by the officers of these national currency associations. However, the emergency currency was never issued.
Senator Nelson W. Aldrich was largely responsible for the Aldrich-Vreeland Currency Law, and he became the Chairman of the National Monetary commission. Furthermore, the law permitted Senators and congressmen to become involved in the affairs of banks. Congress modified and extended the law in 1914.