Federal Reserve History

Formation of the Federal Reserve

The Federal Reserve System is the central bank of the United States. Congress created the Federal Reserve through a law passed in 1913, charging it with a responsibility to foster a sound banking system and a healthy economy. This remains, today, the broad mission of the Fed and its component parts: the 12 Federal Reserve Banks nationwide, each serving a specific region of the country; and the Board of Governors in Washington, D.C., established to oversee the Fed System.

• The Federal Reserve Act, via the Board of Governors
• The Bank that Hamilton Built, The Region, September 2007
  At the dawn of the Republic, the First Bank of the United States created a model for American financial markets and monetary policy that endures to this day.
• Carter Glass, A brief biography of the man who shaped the Federal Reserve Act. The Region, December 1997
• Paul Warburg's Crusade to Establish A Central Bank in the United States, An emigrant from Germany advocated for the development of an American discount market and a European-style commercial paper and became a member of the first Federal Reserve Board.
  The Region, May 1989
• 75th Anniversary Issue, The Region, August 1988
• Born of A Panic: Forming the Fed System
  The Banking Panic of 1907 was the primary inspiration for major banking reform.
• Answering the Call for Banking Supervision
  The need for more effective bank supervision was urgent in 1913.
• Developing an Efficient Payments System
  Fed involvement in the check collection system was intended to bring about a unified national clearing system and the elimination of nonpar payment.
• Discovering Open Market Operations
  Loss of earnings led the Fed to an important tool of monetary policy.
• Blueprint for Reform: How to Draft It?
  Excerpt from Reflections from History: The Minneapolis Federal Reserve Bank, by Clarence W. Nelson, 1973.

The Districts

• Minneapolis vs. St. Paul,
  Competition was intense between Minneapolis and St. Paul
  for the Ninth District Federal Reserve Bank.
  The Region, December 1997
• The Districts Take Shape, The Federal Reserve Act stated “not less than eight nor more than twelve cities.” The Region, August 1988
• Defining the Districts: Where to Draw the Lines?
  Chapter two of Reflections from History.
• Locating Federal Reserve Districts and Headquarters Cities,
  The Region, September 2001

Evolution of the Fed

• Historical Perspectives on Form and Function,
  The Region, September 2004
• Interview with Allan H. Meltzer, The Region, September 2003
  The author of “History of the Federal Reserve” and architect of the Shadow Open Market Committee shares his thoughts on everything from failures of the Fed to international monetary reform.
• Central Banking: Then and Now, speech by Richmond Fed President J. Alfred Broaddus Jr., The Region, September 1993
• Perspectives on Federal Reserve Independence—A Changing Structure for Changing Times, 1976 Annual Report essay.
• Interview with Carter Glass, The senator's views on banking and the Federal Reserve are updated by a modern interpretation,
  The Region, December 1997
• Learning the Job: A Central Bank Evolves,
  Chapter four of Reflections from History.
• Fed System: Overview of Times and Events,
  The Region, August 1988
  
• Remarks by Chairman Alan Greenspan regarding banking history.
  via the Board of Governors, May 2, 1998
  
• The Dichotomy Becomes Reality: Ten Years of the
  Federal Reserve as Regulator and Competitor
  The Monetary Control Act, among other things, authorized the Federal Reserve System to compete for business with the same financial institutions that it also regulates.1991 Annual Report Essay
• Did the Fed's Founding Improve the Efficiency of the U.S. Payments System? Federal Reserve Bank of St. Louis Review, May/June 1998 [154K PDF] Commentary in response [126K PDF]