I have told you-all this but now I have proof. The Fed Res Bk bought US bonds directly from the Gov. - Politics Forum.org | PoFo

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Everything from personal credit card debt to government borrowing debt.

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#15094164
My evidence ---
they are pretty short articles.

Federal Reserve
History
Federal Reserve's Role During WWII
1941–1945
The Federal Reserve supported the war effort in several ways

The link to the article => https://www.federalreservehistory.org/e ... uring_wwii

To enable the Federal Reserve to accomplish its wartime tasks, the Board of Governors asked Congress to amend the Federal Reserve Act. One amendment enabled the Board to change reserve requirements in banks in New York City and Chicago, known as central reserve cities, without changing requirements for other banks. A second amendment authorized the System to purchase government securities directly from the Treasury. A third amendment exempted war loan deposits from reserve requirements for the duration of the emergency.

The Fed. Res. Bk is under control of the Treasury Dept.
Federal Reserve
History
The Second World War and Its Aftermath
1941–1951
Link => https://www.federalreservehistory.org/e ... _aftermath
The inability of Federal Reserve officials to persuade the Treasury to let the System abandon the government bond support program (in view of other policy considerations such as price stability) clearly demonstrated that the Federal Reserve System was effectively under Treasury control. As economist Allan Meltzer notes in his book, Chairman Marriner Eccles described his work in wartime as “a routine administrative job…[T]he Federal Reserve merely executed Treasury decisions” (Meltzer 2003, 579).

From the same article.
Changing bank reserve requirements does not effect their lending all that much.
Another major action taken during the period was the increase in the reserve requirements of commercial banks in 1941. However, this measure, which was intended to restrain credit growth and the expansion of bank liabilities, had only a minor effect on the money supply [bank loans create new magic money, inserted by steve] and the trend in the price level. [Maybe if they kept raising the requirement until it worked they could have found the level that did work. by me again]

I have not found a source for the amount of direct bond buying by the Fed. Res. Bk during WWII which was 50% of all bonds sold, IIRC.

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