The Federal Reserve Board (FRB) was established by an Act of Congress on December 23, 1913. The act provided for the appointment of five members, with the secretary of the treasury (Andrew Mellon during the Coolidge years) serving as ex-officio chairman of the board and the comptroller of the currency also a member ex-officio.
It is widely assumed that FRB confusion about monetary policy during the late 1920s, detailed in the selection from FRB member Charles Sumner Hamlin's papers,
Among the non-bank investors whose speculation was thought to have contributed to the collapse were corporations that diverted surplus funds into the loan market. An exceptionally clear explanation of how actions by the Federal Reserve Board relate affect the New York Stock Market can be found in the
Many attempts have been made to assess President Coolidge's contribution, if any, to the Stock Market catastrophe and the Great Depression that followed. In Calvin Coolidge: The Quiet President (1967, rpt. 1988), biographer Donald R. McCoy discusses Coolidge's January 6, 1928 statement to the press that he had no evidence that brokers' loans (which had jumped to almost $4 billion in value) had expanded too rapidly.
McCoy notes: Coolidge's "statement declared that brokers' loans were not excessive because they reflected steadily increasing bank deposits and the larger number of securities on the market. To give emphasis to his reassuring view, he allowed it to be quoted directly in the press. . . . A few days later H. Parker Willis, who was editor-in-chief of the Journal of Commerce, discussed the statement with Coolidge at the White House. The President indicated that his official view and his personal opinion were divergent. He said, 'If I were to give my own personal opinion about it, I should say that any loan made for gambling in stocks was an "excessive loan."' He continued by way of explanation, "'I regard myself as the representative of the government and not as an individual. When technical matters come up I feel called on to refer them to the proper department of government which has some information about them and then, unless there is some good reason, I use this information as a basis for whatever I have to say; but that does not prevent me from thinking what I please as an individual'" (pp. 319-20). (INTRO NOTE Coolidge Presidency)