Question

In an article in the Wall Street Journal​, Kevin​ Brady, a member of Congress from​ Texas, stated,​ "To get Congress to pass the Federal Reserve Act​ [in 1913, President​ Woodrow] Wilson had to retain the support of...northeastern lawmakers while convincing southern and western Democrats that legislation would not... create a​ [single] central bank.​ Wilson's ingenious solution was​ federalism."​Source: Kevin​ Brady, "How the​ Fed's East Coast Title Warps Monetary​ Policy," Wall Street Journal​, June​ 4, 2015.

When Congressman Brady stated that Woodrow Wilson used​ "federalism" to convince Congress to pass the Federal Reserve​ Act, he meant that?

A. Wilson persuaded Congress that they had an obligation to create a single central bank.

B. Wilson created a Federal Reserve System composed of 12 district banks under the supervision of a board in Washington.

C. the Federal Reserve Act was a federal law.

D. Wilson deceived Congress because there is one central federal bank system.

Answer 1

Wilson used 'federalism' in the sense that instead of creating one central bank, a central banking system is created with country being divided into 12 districts and each district be bestowed upon with a regional district federal bank and these 12 comprise the whole central bank.

So, it parts that make the whole.

So,

Congressman Brady meant that Wilson created a federal system composed of the district banks under the supervision of a board in the Washington.

Hence, the correct answer is the option (B).