Regional President Speech

FIELD POUND TABLE CONFERENCE CENTRAL CITY BANKERS Benjamin Franklin Hotel, Philadelphia Monday, November 22, 194-3 - 4 to 9 p. m. (K. R. Bopp's notes) OBJECTIVE: To contribute to economic stability at high levels of employment and income thru influencing the flow of expenditures. METHOD; Indirectly by influencing the volume of nor.ey - VELOCITY (L INSTRUMENTS: Influence of emount of reserves and reserve reouirements Objective: to influence flow of expenditures A. A matter of judgment as to prospects the most distrusted prosperity in history 1. 1946 ^ in Government Expenditures - C.E.B. 2. Fall 1946^ stock prices 3. 194V ^ Inventory boom 4. 1943 ^Private export boom ^ ' Large c&sh surplus of Treasury Break in farm prices B. hh&t is the outlook today? Raymond Rodgers Obviously a matter of judgment The Gross National Expenditure approach Weak spots - Pay mono. Rodgers Construction - esp. high priced single dwellings - plant and equipment to rxke up ,rrr shortage Export boom off Bumper cropc Cotton textiles Corn Shoes Wheat Men's clothing Cotton Liquor Housefuroishings Paper Coal Radios Semi-luxuries Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 2 - Method end Instruments A. The Fed h£S felt since July 194-7 thrt it should exercise restrr-.irt B. Carft influence expenditures directly hit thru volume of money - even th?t indirectly thru arount of reserves and reserve requirements. (if0 control over velocity) _____________Federal Peserve System___________ Gold &23 bil* Notes ?24 bil. Governments 23 : Deposits 22 Discounts ; Res. bal. $20 II* FEDERAL RESERVE PROGRAM OF RESTRAINT SINCE JULY 1947 A. Reducing holdings of short-term Governments ■ July 194-7 1. Increase in rate of bills 2. Increase in rete of certificates B. November 194-7 - request for additional authority over reserves C. November-December - heavy selling of long bonds to the Federal 1. Reluctant purchases on the scale dovn 2. December 24 - abrupt lowering of pegs 1943 D. January - increase in discount rete from 1 to 1 1/4% E. February 27 - central reserve city requirements increased 2% F. April - repeat request for additional poviers G. The summer interruption 1. May 13 - announcement on June and July refundings H. June 11 - central reserve city requirements increesed 2f. I. August - increase in discount rates from 1 l/4 to 1 l/2$ J. Special session of Congress 1. Consumer credit controls 2. Increased authority over reserve requirements Inference to use before vl/ support prices Digitized for FRASER K. September 16-24- - reserve requirements increased by 7$ and 11/2% http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 3 - Over-all results since June 30, 1947 Gold Cert. / 2.8 : Notes Governments / 1.0 : Deposits / 4.7 : - non res. depiT____._S : Reserves 3.9 Requirements Feb. 2JK .5 June 2% *5 Sept. 2-1 1/2 2.0 3.0 What do we do from here on? Depends on prospects. If up, Do nothing Increase short rates " long rates " reserve requirements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Karl R. Bopp (1948, November 21). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19481122_karl_r_bopp

@misc{wtfs_regional_speeche_19481122_karl_r_bopp,
  author = {Karl R. Bopp},
  title = {Regional President Speech},
  year = {1948},
  month = {Nov},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19481122_karl_r_bopp},
  note = {Retrieved via When the Fed Speaks corpus}
}