Jed H. Shugerman, Boston University School of Law, on The Fed, Offices as Property, and the Meaning of "Cause":
The Federal Reserve Act states that "each member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President." 12 U.S.C. § 242. Based on the historical record, when Congress creates an office with a fixed term of years and protects against removal without "cause," Congress has both granted "a constitutionally protected property interest" under the Fifth Amendment (that cannot be taken away without "due process") and extended a statutory entitlement to receive fair notice and a meaningful opportunity to respond before any removal may take effect.
Constitutional Protection: Under English law through the eighteenth century, termed executive offices-even cabinet-level offices-were considered "freehold" property, subject to protections from removal akin to those applicable to real property. This conception-of termed offices as "property"-would have been well known to the Founders and was reflected in Founding-era documents and commentary. The Constitution was drafted with this understanding.
Statutory Protection: Independent of the Fifth Amendment, the "cause" requirement has a long-established common law meaning of requiring notice and an opportunity to be heard before removal. This understanding hails from pre-Founding English common law, and it is likewise reflected in American precedents soon before Congress drafted the Federal Reserve Act of 1913. The Act’s text of “cause” should be read in this context.
“Faithful Execution.” Article II of the Constitution requires the President to undertake a “faithful execution” of the laws. From a historical perspective, there is nothing inconsistent with that obligation.
--Dan Ernst