The Fed wields enormous power. The US has debated a central bank since day one.

Subscribe to enjoy similar stories. New leadership and a new policy direction at the Federal Reserve revives the eternal American debate over the purpose of—and even the need for—a central bank. The debate dates to the republic’s beginning.

It split the Founding Fathers into two warring camps, offering two different answers to the fundamental question: What is government for? Alexander Hamilton argued for a strong state that supported rapid industrialization, with a central bank as its linchpin. Thomas Jefferson envisioned an agrarian nation that required minimal government and no central bank. In 1790, the secretaries of the Treasury and State took their arguments to President George Washington, who landed on Hamilton’s side.

But the debate has never truly been settled. The first Bank of the U.S. was put out of business after 20 years, and so was the second.

The current central bank—the Fed—has been under attack since its inception more than a century ago. President Andrew Jackson provided the rallying cry for opponents in 1832, declaring central banks “unauthorized by the Constitution, subversive of the rights of the States, and dangerous to the liberties of the people." Even today, two bills collectively known as the Federal Reserve Board Abolition Act, which echo Jackson’s rhetoric, sit in congressional committees awaiting votes. Those bills are unlikely to pass.

But the debate over the central bank’s role is heating up as Kevin Warsh, President Donald Trump’s nominee to lead the Fed starting in May, promises “regime change" at the central bank. It was 250 years ago when Hamilton—“the bastard brat of a Scotch Pedler," as John Adams described him—was developing his beliefs through both war and business. As