Table of Contents

Acknowledgments     

Preface      xiii

1. The Climax of a Long Struggle     
Authorship of the Act     
First United States Bank     
Problems Persisted     
Check Collection a Problem     
A Search for Solutions     
Democrats Come to Power     
Ideas Sharply Divided     
A Quick Summary of the Act     
Federal Advisory Council     

2. Getting Organized      
How Many Fed Banks?     
Subscribing Capital Stock     
Hurry Up!     
Preliminary Organization Committee     
Surveying Opinions     
Local Issues Important     
Decision Time     
Everyone Happy? No Way!     
Naming the Federal Reserve Board     
Politics Again     
War Breaks Out     
Fed Bank Directors     
Open the Banks!     
The “League”     

3. Open for Business (1914–1919)     
Who’s in Charge?     
Changes in District Boundaries     
How Can We Make A Profit?     
A Wartime Atmosphere     
Gold Settlement Fund     
A New Currency—Federal Reserve Notes     
Bank Reserves     
Setting the Discount Rate     
A Discount Policy     
Check Clearing     
Par Clearance of Checks     
World War I and the Fed     
United States Declares War     
What Role for Gold?     
A Glance into the Future     
Governors’ Conference     
Revisions of the Act Needed      
A New Task for the Fed     
Leadership in the Early Years     
Does the Public Like the Fed?     

4. A Struggle for Leadership (1920–1929)     
Where Was the Fed?     
The Phelan Act      
No Firm Policy      
Some Positive Facts     
Speculation on the Rise     
Internal Problems at the Fed     
Politics Erupts     
A Change in Mood     
A Problem with Gold     
Storage of Gold     
Beginning of Open Market Operations     
Markets Fall Apart     
A Time for Action      
“Tools” of the Fed     
Leadership at the Fed      
Day-to-Day Operations at Fed Banks     
What about Par Banks?     
Operations during the Decade of the 1920s     
Legislation     

5. A Decade of Change (1930–1939)     
Where Was the Fed?     
Looking Back     
How to Handle a Run on Your Bank      
What Action Should the Fed Have Taken?     
Roosevelt Elected President      
The Crisis Had Been Building      
A New Face at the Fed       84     
The Banking Act of 1933     
Reserves for Feds Suspended     
The Banking Act of 1935     
What Fed Policy Now ?     
Fed Gets a New Home     
Meanwhile in the Back Rooms of the Feds     

6. World War II and Its Aftermath (1941–1950)     
What Role for the Fed?     
Credit Controls     
Peace Arrives     
Now Let’s Deal with Inflation      
A Change of Presidents     
Unexpected Support for the Fed     
Fed Makes a Formal Policy Statement     
Another Side to the Fed     
Federal Reserve Bulletin Born     
Don’t Forecast!     
How Much Does It Cost?     
Work Increases at Fed Banks     

7. The Fed Comes into Its Own (1950–1959)     
What Was the Accord?     
Enter Congressman Partman     
Refining “Independence”     
Power of the Fed Recognized      
Challenges within the System     
Chairman Martin and Washington Politics     
Behind the Scenes at FOMC     
The “Desk”     
Operational Studies in the System      
What to Do with All Those Checks     
Counting All That Money     
Changing Role of the Discount Window     
Looking Back     

8. The Public Discovers the Fed (1960–1969)     
The Fed’s Role     
Politics as Usual Again     
Fed’s Independence Challenged Again     
Problems with Currency     
Greater Problems with Coin     
News on the International Front     
A Substitute for Gold?     

9. The Soaring Seventies (1970–1979)     
A New Style of Leadership at the Fed      
Difficult Economic Problems     
Congress Wants to Know NOW     
Evasive Action by the Fed     
Let the Sunshine In?     
How about a GAO Audit?     
Chairman Burns Calls in the Reserves     
Leadership Changes Again      
Another First at the Board     
Increasing Importance of International Factors     
The Consumer Demands Attention      
Bank Operations Changing Too     
Changes Outside the Fed      148     
Remote Disbursements a Problem     
What Can the Fed Do?     
More Buildings Needed     

10. Another Banking Evolution (1980–1989)     
Welcome, Paul Volcker     
A “Warm” Welcome for the New Chairman     
Inflation Slowed     
Major Changes for the Fed and the Banking Industry     
Changes Welcomed by Consumers     
Impact on the Fed      
The Fed Adjusts     
Daylight Overdrafts     
Remote Disbursements—A New Check Collection Problem     
Consumers and the Fed     
International Developments     
Legislation     
Volcker Leaves the Fed     
A Look Back     

Appendixes     
Glossary     
Copy of Original Federal Reserve Act     
Commercial Banks Certifying to the Organization of Each Federal Reserve Bank     
Governors and Directors of Each Federal Reserve Bank, 1914     
Design of the First Federal Reserve Notes     
Federal Reserve Banks and Branches, 1989     
Map o Federal Reserve Districts, 1989     
Members of the Federal Reserve Board and the Board of Governors with Federal Reserve District of Residence and Term of Service     
Board of Governors and Official Staff, 1989     
Federal Open Market Committee, 1989     
Board of Governors Advisory Councils, 1989     
Principal Officers at Federal Reserve Banks, 1914–1989     
Principal Officers at Federal Reserve Banks and Branches, March 1989     
Number of Officers and Employees at Each Federal Reserve Bank, 1915–1988     
Number of Employees at Federal Reserve Board and the Board of Governors by Selected Years     
Sample of a Directive to the Manager of the Trading Desk From the Federal Open Market Committee     
Discount Rate at the Federal Reserve Bank of New York, 1914–1989     
United States Marketable Securities and Related Data, 1915–1988     
Commercial Bank Suspensions, 1892-1988     
Number of Commercial Banks in U.S., Total Assets, Number of Banks Member of the Federal Reserve System and Related Data, 1915-1988     
Gold: World Production and Stock Held by United States, 1914–1986     
United States Federal Debt, 1916-1987     
Description of Federal Reserve Districts, 1917     
Income and Expenses of Each Federal Reserve Bank, 1914–1988     
Statement of Condition as of the End of the Year for Each Federal Reserve Bank, 1914, 1920,1930, 1940, 1950, 1960, 1970, 1980 and 1988     

Bibliography     
Index