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As the study makes clear, it is difficult to imagine a more narrowly 

based board of directors for a public agency than has been gathered 

together for the twelve banks of the Federal Reserve System.

Only two segments of American society--banking and big business--

have any substantial 

 

 

 

representation on the boards, and often even 

these become merged through interlocking directorates . . . . Small 

farmers are absent. Small business is barely visible. No women appear 

on the district boards and only six among the branches. Systemwide--

including district and branch boards--only thirteen members from 

minority groups appear.

The study raises a substantial question about the Federal Reserve’s oft-

repeated claim of "independence". One might ask, independent from 

what? Surely not banking or big business, if we are to judge from the 

massive interlocks revealed by this analysis of the district boards.

The big business and banking dominance of the Federal 

Reserve System cited in this report can be traced, in part, 

to the original Federal Reserve Act, which gave member 

commercial banks the 

 

 

 

 

right to select two-thirds of the 

directors of each district bank. But the Board of Governors 

in Washington must share the responsibility for this 

imbalance. They appoint the so-called "public" members 

of the boards of each district bank, appointments which 

have largely reflected the same narrow interests of the 

bank-elected members . . . . Until we have basic reforms, 

the Federal Reserve System will be handicapped in 

carrying out its public responsibilities as an economic 

stabilization and bank regulatory agency. The System’s