George J. Schaller was the second governor of the Federal Reserve Bank of Chicago, serving from March 2, 1934, to March 1, 1941. (In 1935, his title changed to president.)
Schaller was born in Storm Lake, Iowa, in 1874. His banking career began in 1902 at the Citizens First National Bank in Storm Lake, which he and his father organized. He became president in 1922 and continued as head of the bank until 1933 when the board of directors of the Chicago Fed asked him to become acting governor during the leave of absence of James B. McDougal. When McDougal retired in 1934, Schaller was elected governor.
A New York Times article stated “the election of Mr. Schaller is regarded as significant for two reasons: 1) he was practical which the directors in Chicago favored and 2) was not considered the ‘brain trust’ in which the Federal Reserve Board seemed to favor.” 1
The Banking Act of 1935 changed the title of governor to president and Schaller was elected for a five-year term. The Banking Act also capped the Federal Reserve’s trend toward centralization by creating the Federal Open Market Committee to conduct the System’s open market operations. Congress also gave the Federal Reserve a new monetary policy tool, the authority to change member banks’ reserve requirements. During Schaller’s presidency, the Chicago Fed commemorated its twenty-fifth anniversary of the Federal Reserve System in 1939.
Upon his retirement in 1941, Schaller returned to Storm Lake and the Citizens First National Bank of Storm Lake, Iowa.
Schaller died in 1964.
Written by the Federal Reserve Bank of Chicago. See disclaimer.