Why the Fed Works

In 1986, Judge Harold Greene rebuffed a challenge from Senator John Melcher of Montana to the constitutionality of the U.S. Federal Reserve System. Melcher had questioned the uniquely American approach to central banking, which involves sharing responsibility between (and among) regional Federal Reserve banks and the Federal Reserve Board in Washington, and pointedly objected to the role of private citizens on the boards of the regional Feds. Greene upheld the system and noted that it struck “an exquisitely balanced approach to an extremely difficult problem.” He went on to reflect that “few issues in the history of this nation have