That is to say, the purpose of the 1913 act had nothing to do with the Fed's present-day "goals" with respect to inflation, unemployment, economic growth, housing starts, business capex, or any other aspect of the ebb and flow of commerce on Main Street. Instead, the Federal Reserve Act's far more modest remit was to fix the badly flawed "reserve" arrangements of the National Banking Act that good old Abe Lincoln and his Treasury Secretary Salmon P. Chase had put into place to finance the civil war.

What the latter actually did was to nearly tax out of existence the honest free enterprise state banks that had prevailed during America's growth explosion prior to the Civil War in favor of a system of federally regulated "national banks". But the latter were just thinly disguised servants of the US Treasury. In that capacity, they were required to hold US Treasury bonds as collateral to back the issuance of their own bank notes—the latter being the essence of the 19th-century banking business.