Regional President Speech

(4EW Sc.»o#l Social MONETARY STATESMANSHIP Ma** The monetary perspective A. National objectives 1. Absolute: to win the mar 2. Relative: with minimum of inflation, with maintenance of freedom B. Relative responsibilities of agencies 1. The armed forces a. Physical requirements 2. Of the Congress a* Appropriations (1) Physical requirements (2) Prices 3. The Treasury a* Absolute: to finance the war b. Relative: methods of financing (1) Taxation (2) Borrowing from current income ¡3) Borrowing accumulated savings U) Borrowing from commercial banks (5) Borrowing from Federal Reserve Banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 2 - 4* The Federal Reserve System a. Absolute: to see that all needed funds are raised b. Relative: (1) Restricted choice (a) Taxation: advise (b) Borrowing: advise on issues (2) Greater freedom (a) Methods of selling securities: War Financing Committee Victory Fund Committee War Savings Staff (b) Method of providing reserves 5. Summary "I think of the independence of a central bank in terms of the understanding of monetary problems and of courage in pressing its point of view, in terms of a tradition commanding the respect of the Government and the public. And, yet, wdth recognition of the fact that it exercises governmental powers and must be a branch of the Government ... If the central bank understands that it is its function to present the monetary point of view on current problems and if it has succeeded in obtaining fair consideration of that point of view, then I think it has achieved all the independence that it should have." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 3 - Aopr.>pri<ite monetary policies A* Relationship to fiscal policy 1. Magnitude of the budget GENERAL BUDGET SUilMARY (In billions of dollars) July Fiscal January through Fiscal Classification year tnrough Decem_ year 1944 June ber 1942 _________________ 1943 19^2 Receipts: Direct tax«« on iniivid- uals___.........____.. 13» i 6.7 1.6 3.7 .Direct tax«« on corpora­ tions ...»••••»«•••••••• 34*9 6.2 3*9 5*0 Other....••••••••••••••• L.L 2.2 2.L _1l»1 Met receipts...... 33.1 15>2 7.3 12.3 'Expenditures: War activities*......... 97.0 41*9 32.1 26.0' Interest on the public debt........ 3.0 1.1 .7 1.3 Jther activities*............ 4«! 2.3 2.3 5.1 Total expenditures.104.1 45.3 35.1 32.4 .'Bases« of «xp«ndLtur»8.*... 71.0 30.2 27.3 19.6 j$qMndlttLres by GoronuMnt colorations and iei* 4*i 4.0 1.0 3.6 l a p in Treasury balaac«. - *1 -7.7 *7*6 ♦ »4 ftierease In debt.••*••••••• 75*7 26.7 35.7 2J.5 teblic at cod of p s r j o d . »210»5 3L3|.»8 108.2 72»4_ la ad&tlon to n«r esqienditiires ®jA®y la%«t acccwt« .the figare® for ewrporati«« «ad ag«cies ttndade 2.3 M U i« dollars in fiscal year 1%2, 3»3 teilHoo Im lf4f# and 2.7 billion in 1944. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 4 - 2. Sources of funds 3. Ownership of Government securities OWNERSHIP OF U. S. GOVERNMENT SECURITIES (Amounts in billions of dollars) Estimated-------C h a n_g e------- holdings June 30, Dec. 31, June 30, Dec. 31, 1942 to 1941 to 1941 to 1942* Dec. 31, June 30, Dec. 31, _________________________ 1942 1942 1941 41.3 ♦ 14.9 ♦ 4.6 + 1.7 irai Reserve Banks. 6.2 ♦ 3.5 ♦ •4 ♦ .1 lal savings banks.. 4.6 ♦ .7 ♦ .2 ♦ .3 irance companies... 11.0 ♦ 2.1 ♦ • 9 ♦ 1.0 ir investor group; xketable issues... 15.1 ♦ 4.1 ♦ 1.1 ♦ .6 fimarketable issues 21.2 ♦ 8.1 ♦ 4.5 ♦ 4-3 ral agencies and trust funds: ecial issues..... 9.0 ♦ 1.1 ♦ .9 ♦ .9 blic issues...... 3.2 ♦ .4 ♦ .2 ♦ .2 Total interest- bearing direct and guaranteed securities out­ standing........ 111.6 ♦ 35.1 ♦ 12.7 ♦ 9.0 Itiïsïâtes for commercial banks, mutual savings banks, in- Irance companies, and other investor groups are prelimi- Pr­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 5 - 4. Taxation, forced saving, voluntary saving, and inflation a. Graduated income taxes on aaount of income b. Forced saving based on increases in income over income in a base period c. Voluntary saving through organised drives d. Bank purchases B. Alternative methods of providing reserves 1. Sources of demand for reserves a. Increased deposits b. Drain of cash into circulation 2. Treasury operations and the flow of funds a. Central reserve cities b. Reserve cities c. Country banks 3. Methods of providing funds a. Reduction in reserve requirements b* Open Market operation« o. Loans to member banks (l) Variations Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Karl R. Bopp (1943, March 11). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19430312_karl_r_bopp

@misc{wtfs_regional_speeche_19430312_karl_r_bopp,
  author = {Karl R. Bopp},
  title = {Regional President Speech},
  year = {1943},
  month = {Mar},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19430312_karl_r_bopp},
  note = {Retrieved via When the Fed Speaks corpus}
}