Economic and Social Backgrounds of Top Executives of the Federal Reserve Before and After the Great Depression

Abstract

The main purpose of this study is to survey the processes of governance reform during the Great Depression and their effects on the economic and social backgrounds of the Federal Reserve System’s top executives. When confronted by the financial crisis, Congress restructured the Federal Reserve Banks by imposing greater uniformity in structure and control by the Federal Reserve Board in Washington, and Chairman Eccles accomplished a partial purge of the Federal Reserve’s management without revision of the Federal Reserve Act by asking Federal Reserve Banks to adhere to the policy regime as set by the Federal Reserve Board. First, we trace the evolution of the governance and membership of the directors and governors/presidents of the Federal Reserve Banks. Second, we observe annual trends in the economic and social backgrounds of the top executive groups of the Federal Reserve from 1915 to 1955 and examine how the Banking Act of 1935 and the partial purge of old-line executives in the mid-1930s affected their backgrounds. We conclude that Eccles’ governance reforms had some impact on the executives’ ages, levels of education, industrial origins, and lengths of service, and some economic and social networks, including political and religious affiliations, were operating in the Federal Reserve’s top executive groups.