Martin Mendoza
The Federal Reserve was created by the U.S. Congress in 1913 when President Woodrow
Wilson signed the Federal Reserve Act into law. Before the Fed was created, the United States
was deprived of any formal organization for analyzing and to fulfill monetary policy. Before this,
markets were usually unstable and the public had little to no faith in the banking systems. A
perfect example of this, was during the Revolutionary War. The first paper money of the U.S. or
as we know it by “fiat money” was created. These paper bills where called continentals and
where printed in large quantities to the point where they became worthless due to inflation.
The Fed is directed by a government agency in Washington known as the Board of
Governors of the Federal Reserve. The Board of Governors accords of seven presidential
appointees, each of which serve terms totaling 14 years. The board is directed by a chairman and
a vice chairman, each is elected by the president and confirmed by the Senate for four-year
