Governors were active executive officers who directed the day-to-day operations of their organization. This tradition probably arose with the Bank of England, which had been led by its governor since 1694. The Federal Reserve Act of 1913 labeled the chief executive officers at reserve banks as governors because the Fed’s founders viewed the system as a confederation of autonomous reserve banks, each operating independently under general oversight of the Federal Reserve Board in Washington, DC.
Around the world, the final decision-maker in a central bank held the title of governor. The chief operating officer, who had been labeled the vice governor, became the first vice president.Ĭhanging the titles of the Federal Reserve’s leaders had symbolic and legal significance.
In each Federal Reserve district, the chief executive officer, who had been labeled the governor, received the title of president.
The Federal Reserve staff occupied the new facility in the fall of 1937. Planning for this building began soon after the passage of the act. The Federal Reserve moved its meetings from the Treasury Department to a new building constructed on Constitution Avenue and consolidated its staff at that location. The secretary of treasury, who had served as the chairman of the Federal Reserve Board, and the comptroller of the currency, who had served as a member of the Federal Reserve Board, ceased to serve with the Federal Reserve after 1936. The Board of Governors became increasingly independent from the executive branch of the federal government. All members of the Board (formerly just called members) received the title of governor. The second-in-command (previously titled vice governor) became the vice chairman of the Board of Governors. The leader of the Board of Governors (previously called the governor of the Federal Reserve Board) became the chairman of the Board of Governors. The Federal Reserve Board became the Board of Governors of the Federal Reserve System. The reorganization included cosmetic and consequential changes. This portion expanded the powers of the Federal Reserve shifted power from the regional reserve banks to the Board based in Washington, DC clarified and codified the relationship between the Federal Reserve and the executive and legislative branches of the federal government and reorganized the Federal Reserve’s leadership structure. This issue was the focus of the portion of the act known as Title II, Amendments to the Federal Reserve Act. The issue that inspired the broadest debate was the structure, powers, and functions of the Federal Reserve System. The Banking Act of 1935 addressed three broad issues. The Banking Act of 1935 finalized these reforms “to provide for the sound, effective, and uninterrupted operation of the banking system.” 1 Much of that earlier legislation contained emergency expedients and regulatory experiments that Congress approved on a temporary basis. The Banking Act of 1935, which President Roosevelt signed on August 23, completed the restructuring of the Federal Reserve and financial system begun during the Hoover administration and continued during the Roosevelt administration.
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