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Fed chair 1929

Chairman of the Federal Reserve Roy A. Young ca. 1929 Stock ...

Roy A. Young was the Governor (equivalent to Chair) of the Federal Reserve Board during the 1929 stock market crash, serving from October 4, 1927, to August 31, 1930. He oversaw the central bank during the onset of the Great Depression, focusing on curbing stock market speculation before the crash.

Key details regarding the Fed leadership in 1929:

Position: Governor of the Federal Reserve Board.

Tenure: October 4, 1927 – August 31, 1930.

Context: Young led the Federal Reserve during the October 1929 Wall Street crash.

Background: Prior to his appointment by President Coolidge, he was the governor of the Federal Reserve Bank of Minneapolis.

Successor: Eugene Meyer took over in September 1930.



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Show all who followed him

Roy A. Young was followed by Eugene Meyer, who served as the Governor of the Federal Reserve Board from September 16, 1930, to May 10, 1933.

Appointed by President Herbert Hoover, Meyer led the central bank during the deepening of the Great Depression. His tenure was marked by a commitment to the gold standard and a controversial approach to the banking crisis, during which thousands of banks failed.

After resigning from the Federal Reserve in 1933, Meyer purchased The Washington Post, serving as its publisher and helping to build it into a major national newspaper.

Following Meyer, the next several leaders of the Federal Reserve were:

Eugene R. Black (1933–1934)

Marriner S. Eccles (1934–1948)

Thomas B. McCabe (1948–1951)

William McChesney Martin Jr. (1951–1970)

Would you like to know more about Eugene Meyer's role at The Washington Post or how Marriner Eccles reshaped the Fed's powers in 1935?

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Ben Bernanke wrote that Myers was too cautious, which made the economic crisis worse. But wasnt Meyers constrained by a gold reserve problem?

While Ben Bernanke and other modern economists, such as Barry Eichengreen, acknowledge that the gold standard was a fundamental constraint on the Federal Reserve's ability to act during the Great Depression, they also argue that the Fed's inaction under Eugene Meyer went beyond what those constraints required.

The "Gold Standard as a Straitjacket" Argument

Adhering to the gold standard meant the Fed had to maintain a fixed exchange rate, which theoretically hamstrung its ability to engage in expansionary policies to reduce unemployment or stimulate the economy.

The Constraint: Aggressive monetary expansion could lead market participants to doubt the U.S. commitment to gold, potentially causing a rapid, catastrophic loss of gold reserves through devaluation expectations.

External Pressures: When Britain left the gold standard in 1931, Meyer reacted by raising interest rates to protect U.S. gold reserves, a move that modern critics argue worsened the domestic economic crisis.

Why Critics Like Bernanke Argue Meyer Was "Too Cautious"

Despite the gold standard's limitations, research suggests the Fed under Meyer had more room to maneuver than it utilized.

Massive Gold Reserves: Unlike small economies, the U.S. held massive gold reserves. In December 1929, the U.S. held nearly 38% of the world's central bank gold, with a reserve ratio of 55%, well above the mandated 40% "gold cover."

Perverse Policy Actions: Milton Friedman and Anna Schwartz pointed out that the U.S. gold stock actually rose during the first two years of the contraction. However, the Fed "sterilized" this inflow, meaning they did not allow it to expand the money supply. Instead, the money stock moved "perversely," decreasing even as gold reserves increased.

Failure to Act as Lender of Last Resort: Meyer has been criticized for allowing the banking crisis to get out of hand by failing to use monetary stimulus or aggressive open-market purchases to ameliorate panics. Simulations suggest that expansionary open-market operations at critical junctures (such as late 1930 and late 1931) could have averted banking panics without endangering gold convertibility.

Meyer’s Personal Dilemma

Eugene Meyer was not entirely opposed to action but was often paralyzed by conflicting priorities:

Advocacy for Intervention:

Meyer actually advocated for open-market purchases (buying bonds to provide market liquidity) and urged Fed branches to lower interest rates for interbank loans. Internal Opposition and Delay: He faced significant opposition from other Fed members. His own deep concern for maintaining the gold standard led him to delay his schemes for open-market purchases while banks failed and the public hoarded currency.

Ultimately, the consensus among scholars like Bernanke is that while the gold standard was a "straitjacket," the Fed under Meyer chose to pull the straps tighter than necessary, failing to use the substantial reserves it actually possessed to stem the collapse.

Would you like to explore how Franklin D. Roosevelt eventually "broke" these gold constraints once he took office in 1933?

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When Franklin D. Roosevelt (FDR) took office in March 1933, the U.S. banking system was in total collapse. He realized that as long as the U.S. remained on the strict gold standard, he could not inflate the currency or raise prices to help farmers and debtors.

He "broke" the gold constraints through a series of rapid, aggressive maneuvers that fundamentally changed the American economy:

1. The Bank Holiday and Gold Embargo (March 1933)

Just two days after his inauguration, FDR declared a nationwide "Bank Holiday."

The Move: He used the Trading with the Enemy Act of 1917 to prohibit the export of gold and the conversion of currency into gold.

The Result: This effectively halted the "drain" on the Fed's reserves immediately, giving the government breathing room to reorganize the banks.

2. Executive Order 6102 (April 1933)

This was one of the most controversial moves in U.S. financial history.

The Mandate: FDR ordered all citizens to deliver their gold coins, bullion, and gold certificates to the Federal Reserve in exchange for paper money ($20.67 per ounce).

The Goal: It criminalized the private hoarding of gold, ensuring that the nation's entire gold supply was centralized in the hands of the government to back a massive expansion of the money supply. 3. Ending the "Gold Clause" (June 1933)

Most public and private contracts at the time had "gold clauses" requiring payment in gold. The Action: Congress passed a joint resolution (upheld later by the Supreme Court) nullifying these clauses.

The Significance: This allowed the government and individuals to pay off debts in "devalued" paper currency rather than expensive gold, preventing a wave of mass bankruptcies.

4. The Gold Reserve Act and Devaluation (January 1934)

This was the final blow to the old system.

Price Manipulation: FDR officially raised the price of gold from $20.67 to $35.00 per ounce.

The "Profit": Since the government now owned all the gold, this instant devaluation of the dollar created a "windfall profit" of about $2.8 billion for the Treasury.

The Impact: The dollar was now 40% cheaper against foreign currencies, making U.S. exports more competitive and—most importantly—ending the deflationary cycle by forcing prices to rise.

The Result: The "Great Recovery"

Economists like Bernanke and Christina Romer argue that this departure from gold was the single most important factor in the recovery from the Great Depression. By breaking the gold constraint: The money supply began to grow again.

Interest rates dropped.

Industrial production began to climb almost immediately after the dollar was devalued.

Note: While the U.S. stayed on a "modified" gold standard for international trade until 1971, for the average American citizen, the gold standard ended in 1933.

Would you like to see how Marriner Eccles (the next major Fed Chair) used this new freedom to turn the Federal Reserve into the powerful modern institution it is today?

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Marriner Eccles, often called the "Father of the Modern Federal Reserve," used the policy freedom of the 1930s to transform the Fed from a decentralized "confederation" of regional banks into the centralized power it is today.

Through the Banking Act of 1935, which he largely drafted, Eccles secured several foundational changes: 1. Centralizing Power in Washington

Before Eccles, the 12 regional Federal Reserve Banks (especially New York) operated with significant independence, often setting their own policies.

The Shift: Eccles centralized authority in the Board of Governors in Washington, D.C..

Commanding Monetary Policy:

He ensured that the Board of Governors held a majority of votes on the Federal Open Market Committee (FOMC), making regional banks subservient to national policy for the first time.

2. Securing Political Independence

Eccles believed the Fed needed to be independent of short-term political interference to manage the economy effectively.

Removing Politicians:

The 1935 Act removed the Secretary of the Treasury and the Comptroller of the Currency from the Fed's Board, where they had previously served as ex-officio members.

Longer Terms:

Board members were given 14-year staggered terms to prevent any single President from easily controlling the Board.

3. Creating New "Compensatory" Tools

Eccles championed the idea that the Fed should use its power to "compensate" for economic swings—stimulating the economy during downturns and cooling it during booms.

Reserve Requirements: He gained the power for the Board to adjust reserve requirements (the amount of cash banks must hold), allowing the Fed to directly influence how much money banks could lend.

Interest Rate Control: He pioneered the use of interest rate manipulation as a standard tool for macroeconomic stability.

4. The 1951 Treasury-Fed Accord

Eccles's final major contribution was his role in the 1951 Treasury-Fed Accord. During and after WWII, the Fed was forced to keep interest rates low to help the Treasury finance war debt.

The Conflict: When this led to post-war inflation, Eccles (then a Board member) pushed for an end to this subservience.

The Result: The 1951 Accord officially separated monetary policy from debt management, establishing the modern independent Fed that can raise rates even if it makes government borrowing more expensive. In honor of his legacy, the Federal Reserve's headquarters in Washington, D.C., was renamed the Marriner S. Eccles Building in 1982.

Would you like to explore how modern Fed chairs like Paul Volcker or Jerome Powell have used these centralized powers to tackle inflation in more recent decades?

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Modern Chairs like Paul Volcker and Jerome Powell have utilized the Federal Reserve's independence and centralized authority to combat high inflation through aggressive interest rate hikes, often in the face of intense public and political pressure.

Paul Volcker (1979–1987):

The "Volcker Shock"

Appointed by President Jimmy Carter, Volcker is credited with "breaking the back" of the 1970s "Great Inflation".

Drastic Rate Hikes: He pushed the federal funds rate to nearly 20% by June 1981 to crush double-digit inflation.

Economic Cost: His policies triggered back-to-back recessions (1980 and 1981–1982), with unemployment peaking at nearly 11%.

Public Backlash: His actions were so unpopular that farmers blockaded the Fed building with tractors, and homebuilders mailed him two-by-fours in protest.

Legacy: By 1983, inflation fell from over 14% to below 4%, ushering in the Great Moderation, a period of long-term economic stability.

Jerome Powell (2018–Present):

The Post-Pandemic Fight

Following the COVID-19 pandemic, Powell faced the highest U.S. inflation in 40 years.

Rapid Tightening: Starting in March 2022, the Fed implemented 11 consecutive rate hikes, raising the benchmark rate from near-zero to a 5.25%–5.50% range by July 2023.

Comparison to Volcker: Powell has frequently cited Volcker as a "professional hero," emphasizing that the Fed must remain committed to its 2% inflation goal despite risks to growth.

Current Outcome: As of early 2026, the Fed has begun gradual rate cuts as inflation moderated, potentially achieving a rare "soft landing"—lowering inflation without triggering a deep recession.

Would you like to compare the specific inflation triggers of the 1970s (like oil shocks) to the post-pandemic supply chain issues Powell faced?

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