Speaking of Business: Brady Appoints Himself to the Fed
This year is the 75th anniversary of the Federal Reserve System, and some members of Congress think it's time to take a fresh look at the nation's central bank. After 75 years there may be a few things that are worth reexamining.</br></br>The regional Federal Reserve Bank setup, for instance, may be out of date. In earlier years it may have seemed reasonable to give Richmond, Va., a bank and allow Los Angeles only a branch of the San Francisco bank, but times have changed. Maybe the whole regional system is an anachronism; the Fed, after all, is a national central bank.</br></br>Some of the would-be reformers, however, want to restore an arrangement we once had -- or, at least, part of it. In the beginning, the treasury secretary and the comptroller of the currency were both ex officio members of the Federal Reserve Board. But in 1935, when Congress was trying to find someone or something to blame for the Great Depression, it decided to drop both the secretary and the comptroller from the board.</br></br>Carter Glass, a former treasury secretary who was then back in Congress, probably influenced the decision. He said that when he was on the board he felt that he had a great deal of power and, somehow, he didn't think that was a good thing.</br></br>Times have changed. Rep. Byron Dorgan (D., N.D.) has introduced a bill in Congress, co-sponsored by Rep. Lee Hamilton (D., Ind.), that would put the treasury secretary back on the board. There is doubt that the change would accomplish much but at least Congress, as in 1935, would be doing something. So far no one has suggested putting the comptroller back on the board.