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"Criticism of Federal Reserve Board policy by many investors is not 

based on its attempt to  deflate the stock market, but on the charge 

that the Board itself, by last year’s policy, is completely responsible for 

such stock market inflation as exists."

A damning survey of the Federal Reserve System’s first fifteen years 

appears in the "North American Review" of May, 1929, by H. Parker 

Willis, professional economist who was one of the authors of the Act 

and First Secretary of the Board from 1914 until 1920. He expresses 

complete disillusionment.

"My first talk with President-elect Wilson was in 1912. Our conversation 

related entirely to  banking reform. I asked whether he felt confident 

we could secure the administration of a suitable law and how we 

should get it applied and enforced. He answered: ‘We must rely on 

American business idealism.’ He sought for something which could be 

trusted to afford opportunity to American Idealism. It did serve to 

finance the World War and to revise American banking practices. The 

element of idealism that the President prescribed and believed we 

could get on the principle of noblesse oblige from American bankers 

and businessmen was not there. 

Since the inauguration of the Federal Reserve Act we have suffered 

one of the most serious financial depressions and revolutions ever 

known in our history, that of 1920-21. We have seen our agriculture pass 

through a long period of suffering and even of revolution, during which 

one 

 

 

million farmers left their farms, due to difficulties with the price of 

land and the odd status of credit conditions. We have suffered the 

most extensive era of bank failures ever known in this country. Forty-five 

hundred banks have closed their doors since the Reserve System