Although the papers of Paul Volcker or the speeches of Janet Yellen may have caught your eye, the papers of Marriner Eccles, widely recognized as the father of the modern Federal Reserve, is FRASER’s earliest digitized collection documenting stories of Fed leadership. Eccles served as Chairman (1934-1948) and Vice Chairman (1948-1951) of the Board of Governors of the Federal Reserve System. In 2008, the FRASER team embarked on a multi-year project to digitize Eccles’s papers held at the University of Utah. The collection chronicles his rise as a key figure in shaping monetary policy on the national and international stages—policy that became the foundation for stable economic systems at home and abroad.
Before his public service, Eccles was a well-established Utah businessman and banker. In February 1933, Eccles testified before the Senate Finance Committee on the “economic problems” of the Great Depression. In his testimony, he proposed a five-point program that relied on deficit spending to begin a cycle of recovery to fix the economy. Eccles’s plan influenced what would become the New Deal, and his ideas influenced the creation of many of its programs, including the Civil Works Administration[1] and the Federal Deposit Insurance Corporation (FDIC).
By early 1934, Eccles’s renown had grown, and he was appointed assistant to the Secretary of the Treasury, specializing in monetary and credit affairs, among a slate of other responsibilities. Part of his work at the Treasury involved collaboration[2] with Fed economist Winfield Riefler that would lead to the development of the Federal Housing Administration. Later that year, he was appointed by President Roosevelt to head the Federal Reserve Board. Eccles was confirmed by the Senate to the Federal Reserve Board in April 1935, though he had taken office as a recess appointee[3] in November 1934, just a few days after his appointment, [4] and despite opposition to his appointment by Federal Reserve Act architect Carter Glass.[5] As Governor of the Board (a position later retitled Chairman), Eccles put into motion many of his ideas to change the Board’s structure and sponsored the Banking Act of 1935 to usher in those changes: centralizing control of the Fed within the renamed Board of Governors and restructuring the Board to eliminate the ex officio seats previously held by the Secretary of the Treasury and the Comptroller of the Currency.
During his tenure at the Board, he was outspoken about his opinions not only on monetary policy but also on fiscal policy, even holding the first known press conference by a Fed Chairman, in February 1935. He worked to revise bank supervision rules to expand lending at the tail end of the Great Depression and later, in a radio address, blamed fiscal policy for the recession of 1937. He also oversaw the Fed’s expanded oversight of consumer credit in the 1940s, was a delegate to the 1944 Bretton Woods conference, and influenced the development of what would later become the Employment Act of 1946.[6]
Eccles and his views were often unpopular. In addition to his repudiation by Carter Glass, Eccles also locked horns with perennial Fed critic Wright Patman[7] and earned the great dislike of economist John Maynard Keynes.[8] Eccles’s outspoken defense of the Fed’s independence and criticism of Treasury and fiscal policy led President Truman to reappoint him to the Board but effectively “demote” him[9] to Vice Chairman in 1948, when Thomas McCabe was appointed Chairman in his place.[10] In his new role, Eccles went on to play a significant part in the “showdown” leading up to the Treasury-Fed Accord of 1951, even going on the record with the New York Times[11] and releasing Board records to contradict public statements of Treasury Secretary Snyder and President Truman.[12]
Eccles resigned from the Board and retired to Utah in 1951. He died in 1977. In 1982, the building that houses the Board of Governors, and which was constructed during his tenure as Chairman, was renamed in his honor by Congress. To learn more about Marriner Eccles, see his biography at federalreservehistory.org and his statements and speeches and archival papers on FRASER.
The documentary “Marriner Eccles: Father of the Modern Federal Reserve” airs in January 2021 on PBS. Fed Chair Jerome Powell spoke on Eccles’s legacy at the film’s premiere in 2019.
[1] Mark Wayne Nelson. Marriner S. Eccles and the New Deal, 1933-1940. University of Utah Press, 2017: 105-107.
[2] Nelson (2017: 146).
[3] Nelson (2019: 190).
[4] “Eccles Approved as Reserve’s Governor; Glass Absent as Senate Committee Votes.” New York Times, April 24, 1935: 31. Glass would later cast the only “nay” in the full Senate vote on Eccles’s confirmation (Nelson 2019: 206).
[5] “Eccles Wins Approval.” New York Times, April 23, 1935: 37.
[6] The “Keynes-Eccles-Hansen-Beveridge theory of economic stabilization” in the 1945 bill would be significantly softened in the final text.
[7] Tim Todd. The Balance of Power: The Political Fight for an Independent Central Bank, 1790-Present. Federal Reserve Bank of Kansas City, 2012: 36.
[8] Josh Zumbrun. “The Secret Life of Marriner Eccles.” Wall Street Journal, September 3, 2014.
[9] Donald D. Hester. “Marriner S. Eccles and Thomas B. McCabe: 1945-1951,” in The Evolution of Monetary Policy and Banking in the US. Springer,2008: 13-17.
[10] See Allan H. Meltzer. A History of the Federal Reserve Volume 1: 1913-1951. University of Chicago Press, 2003: 656-57.
[11] Felix Belair Jr. “Truman is Disputed by Reserve Board.” New York Times, February 4, 1951: 1.
[12] Robert L. Hetzel and Ralph F. Leach. “The Treasury-Fed Accord: A New Narrative Account.” Federal Reserve Bank of Richmond Economic Quarterly, 87(1), Winter 2001: 45.
© 2021, Federal Reserve Bank of St. Louis. The views expressed are those of the author(s) and do not necessarily reflect official positions of the Federal Reserve Bank of St. Louis or the Federal Reserve System.
@FedFRASER