Dear Christians: why is the Federal Reserve Bank private?

Ever since the foundation of the USA, the people and the government have been suspicious of a government-run bank (hence the First and Second United States Banks' charters were allowed to expire).

Whilst the government retains the right to mint coins, the Federal Reserve was created to stem the tide of private-issue money [called National Currency]. (Banks used to issue money, allegedly backed by lawful money [specie] but ofttimes issued worthless money backed by nothing. A bank run would destroy the bank, and the currency it issued.)

The Fed was created to address this problem, by requiring private banks to deposit funds in the Fed, and the Fed would issue money backed by the specie (and later fiat currency) of private banks.

The Fed Chair is appointed by the President after the advise and consent of the Senate, over which much fighting has gone on in the last few months.

That said, why would any of this have to do with religion? (Other than the anti-communist stunt printed on US currency fostered by the Knights of Columbus after 1954 of course.)
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In answer to the so-what above - Edit: A bank run on a bank before the Fed meant savers were trying to convert their privately-issued currency into specie [gold or silver coin]. If a bank did not have sufficient specie, then it collapsed, and all the currency issued in circulation by that bank was also worthless (including that held by people who were not depositors of the bank).

If I were a banker in Atlanta (or a person living there), it would be difficult to tell if the $5 bill pictured in the image linked below was actually worth anything: was that bank still in business when I took the $5 bill?

Banks didn't work the same way prior to the establishment of the Fed as they do now. There were (and still are) two kinds of money defined in law: Lawful money [specie, or coins issued by the Government], and Legal Tender [National Currency]. One was not (and is still not) required to take legal tender for payment of a debt.

The idea of a deposit in a bank by a depositor was the person deposited specie (gold or silver coin), and received as a receipt National Currency. In theory this could be held until redemption (banks did not pay interest, just like now) at the teller window for coin, or could be spent as if it were coin (the $5 bill pictured could be used exactly like a $5 gold piece, but the business in question could refuse it).

What the depositor got from the bank was his specie was allegedly safe (barring robbery, bank runs, over-issue of currency, &c), and he did not have to carry around heavy coin for purchases. What the bank got was free use of Lawful Money from the depositor for investments and loans. The arrangement worked well until the exponential rise in bank robberies in the latter part of the XIX Century.

This made such things as business (for which transporting large sums of specie around the country was a huge risk) and economic planning extremely difficult. (Will the money my business has be worth anything next week when I want to start my new factory or pay my employees?)

Moreover, if a bank was robbed (think the James Gang), they didn't steal the currency but the specie backing it. The bank was immediately insolvent, and the depositors and others holding its currency were out-of-luck (this was before insurance against bank robbery).

By taking away the power of private banks to issue currency and vesting it in the Fed, the rollercoaster ride of incessant bank failures ended.

Checking accounts have replaced National Currency, making the depositor responsible for the "currency" (cheques) he issues. (In effect, a cheque is the same thing as the old National Currency abolished in the Thirties: you are required to have backing for any cheque you utter.)

Central banks in most developed nations are institutionally designed to be independent from political interference. In most cases they are not public, in the sense that they are neither state-owned nor directly regulated by government, parliament or another elected body. Still, limited control by the executive and legislative bodies usually exists. ☼

The Federal Reserve runs the world.

Another step towards avoiding dictatorship.