Federal Reserve Act

The Federal Reserve System is an independent central bank. Although the President of the United States appoints the chairman of the Fed and this appointment is approved by the United States Senate, the decisions of the Fed do not have to be ratified by the President or anyone else in the executive branch of the United States government.

According to the United States Constitution, the United States Congress has the power and responsibility to coin money and set its value. In the 1913 Federal Reserve Act, Congress itself shirked this responsibility and gave this power to a private corporation known as the Federal Reserve.

The Federal Reserve System consists of 12 Federal Reserve Banks:

• Boston, Massachusetts
• New York, New York
• Philadelphia, Pennsylvania
• Cleveland, Ohio
• Richmond, Virginia
• Atlanta, Georgia
• Chicago, Illinois
• Saint Louis, Missouri
• Minneapolis, Minnesota
• Kansas City, Missouri
• Dallas, Texas
• San Francisco, California

All banks chartered under the National Banking Act of 1863 were made members of the Federal Reserve System, while others could join. A Board of Governors appointed by the President of the United States supervised the system.