Regional President Speech

WCTCT WXWWTC PCTEL0HIBIT8 iflr Karl R. Bopp Mòre the Aitrioui Institute of 6x30 p.m., ìiaroh 11, 1$¡46 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis RECENT ECONOMIC DEVELOPMENTS Introduction 1. The current situation a. Domestic: strong inflationary pressures b. International: rapid deterioration 2. Origin of our present problems was the war I. Domestic developments A. Real factors 1. Construction a. Peak - July 1942, 286; latest, 93 b. Location 2. Manpower a. To armed forces - 12 million b. Civilian - 45 to 52 million c. Overtime d. Peak - March 1943> 132; latest, 116 3 • Production a. Peak - October 1943, 227; now, 149 b. About half for war, half for civilians c. Freight-car loadings: peak - Jan. 1944> 144; latest, 127 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 2 - B. Monetary factors 1. General objective: to assure adequate funds with minimum of disturbance - that is, minimum borrowing from banks 2. December 8, 1941 statement of Board of Governors: nThe financial and banking mechanism of the country is today in a stronger position to meet any emergency than ever before. The existing supply of funds and of bank reserves is fully adequate to meet all present and prospective needs of the Government and of pri­ vate activity. The Federal Reserve System has powers to add to these resources to whatever extent may be required in the future. The System is prepared to use its powers to assure that an ample supply of funcs is available at all times for financing the v;ar effort and to exert its influence tov;ard maintaining condi­ tions in the United States Government security mar­ ket that are satisfactory from the standpoint of the Government's requirements.n 3- Implications of statement and procedures employed to make it effective a. Pattern of rates (1) Origin of pattern (2) If you are going to stabilize begin where you are b. Post bill rate and repurchase option c. Reserves eliminated against war loan deposits Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis d. Reduction in reserve requirements in central reserve cities e. Half per cent preferential rate f. Nonbankable issues 4« Government finance Amount Per cent (Bill, t) Government expenditures*. ___387 , 100 Government receipts,net 156 40 Borrowings : From commercial banks 73 19 From Fed. Res. Banks. 22 6 From others........ 136 35 i J..... . *Incluaes $23 billion increase in Treasury balance. 5. The supply of money a. Demand + U.S. deposits and currency increased from $43 (12/31/40) to $127 billion (end of 1945) C. Prices - and distribution 1. Kept under control during the vrar through direct controls a. Rationing and priorities b. Maximum prices and wages Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis II. International developments A. The Bretton Woods Agreements B. The Eritish Loan Agreement III. Where we stand today Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Karl R. Bopp (1946, March 10). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19460311_karl_r_bopp

@misc{wtfs_regional_speeche_19460311_karl_r_bopp,
  author = {Karl R. Bopp},
  title = {Regional President Speech},
  year = {1946},
  month = {Mar},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19460311_karl_r_bopp},
  note = {Retrieved via When the Fed Speaks corpus}
}