The Federal Reserve System is even more than the world central bank. Since its modest beginning, it frequently has acted as the champion and vanguard of the political command system. Many of the amendments to the Federal Reserve Act, giving the System ever greater power for monetary expansion, were enacted upon the recommendations of the governors. In its annual reports, the Board frequently included a section recommending legislation for enactment by Congress. Only during the early years of the Roosevelt New Deal was the federal government at times more demanding in its legislation than was the Board in its recommendations, but even then, the federal government did not act without the Board's advice.
Today, the System is holding practically unlimited power of expansion, yet the Board is clamoring for more. It is pleading and insisting that it be granted permanent power to control the uses to which its credit may be put. In other words, it would like to manage the credit markets to channel the benefits of inflation and credit expansion towards its most favored debtor, the federal government.
--Hans F. Sennholz,
Money and Freedom (Cedar Falls, IA: Center for Futures Education, 1985), 20.
