Commentary
The independence of the Federal Reserve was never granted; rather, it was fought for. Although the first chairman of the Federal Reserve “System” Marriner Stoddard Eccles failed to fight for independence, his effort after demotion (from chairman to normal committee member) did reward his successors.
Another long-sitting successor after him was William McChesney Martin Junior who also fought for independence aggressively. His father had helped write the original Federal Reserve Act and served as president of the Federal Reserve Bank of St. Louis.
William McChesney Martin Jr.
Having said that, independence is to a very much extent decided by the president, as well as historical lessons just learned. While the Democrats Franklin Roosevelt and Harry Truman enjoyed pressurising the Fed as a printer to finance fiscal deficits, their successor Republican Dwight Eisenhower was the opposite. The lesson from huge deficits during World War II was loss of control of inflation. Some kind of high inflation (10 percent) then high unemployment (8 percent) were observed at the end of the 1940s. With this backdrop, Eisenhower and Martin intended to alter all these….