Regional President Speech

Philadelphia Field Meeting held on Tuesday, May 29, 1962, at 6*00 p.m., at the Sheraton Hotel, Philadelphia. ROLE OF THE FEDERAL RESERVE SYSTEM I. PROMOTE OUR ECONOMIC OBJECTIVES. A. Reasonably full employment. B. Stable price level. C. Balance in international payments. H . LIMITATIONS: Can't do alone! e.g. Developments in steel. A. Labor. B. Management. C. Government. We as a society have some basic issues to resolve. III. NATIONAL GOALS OF OUR ECONOMIC SYSTEM. A. Section 2 of Employment Act of 1946: M. . . Federal Government shall use all practicable means . . . in a manner calculated to foster and promote free competitive enterprise and the general welfare ... to promote maximum employment, produc­ tion, and purchasing power." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis -2- IV. OPERATE IN ACTUAL WORLD — not ideal world of models. A. Maturity based on experience. — not erratic — promptly. — not frighten easily. — not stubborn for sake of stubbornness. B. Tradition to adapt. — from conviction, not as expediency. C. A recent illustration. 1. The model and leaning against the wind. 2. The real world. Large unemployment. Stable price level. Adverse balance of payments. 3. Resolution — adaptation. Provide reserves WITHOUT Depressing short-term rates. D. Another illustration. 1. Dealing in foreign currencies. (a) Advantages of a convertible world. (b) Hazards of a convertible world. $ Key Currency. (c) What can and cannot be achieved. "Other assets, denominated in foreign currencies.” Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis PROPOSAL TO CHANGE TERM OF CHAIRMAN AND VICE CHAIRMAN OF THE BOARD OF GOVERNORS. A. History; Before 1935 — President designated a Governor + Vice Governor — No specified term: Until 1927 — for one year. 1927-1936 — "until otherwise directed." Banking Act of 1935 — Chairman + Vice Chairman — "To serve as such for a term of four years." 1936-1948 exp. Jan. 31 Eccles 1948 Apr. 15 McCabe 1951 Apr. 2 Martin Present term expires — 3/31/63» B. Kennedy proposals of April 17, 1962. 1. The proposals: (a) Terms of Chairman + Vice Chairman to begin— February 1, 1965 — to be for 4 years. TRANSITION: Appointment PRIOR TO — Expire then. (b) Terms of Governors to expire — January 31, odd numbered years. TRANSITION: Extend encumbent terms by one year. 2. Will this lead to Executive Control? (a) Not a "Supreme Court Packing" operation. KENNEDY LOSES — (1) Part of term of Chairman appointed by him. (2) Appointment of one Governor. "Lame Duck" appointment — late in term? Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis (b) Spotlight on the appointment. (1) Domestic interest in. (2) Foreign interest in. (c) Job makes the man responsible. (d) Character of Appointee. Truman - McCabe. (1) Strong man — will influence administration. (2) Weak man — cannot commit the System. (3) System has been battered — but not a pushover. 3. The source and meaning of independence. (a) Central Bank cannot be irresponsible. (b) REAL power not legal — BUT earned. The power of resignation — with reasons. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Karl R. Bopp (1962, May 28). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19620529_karl_r_bopp

@misc{wtfs_regional_speeche_19620529_karl_r_bopp,
  author = {Karl R. Bopp},
  title = {Regional President Speech},
  year = {1962},
  month = {May},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19620529_karl_r_bopp},
  note = {Retrieved via When the Fed Speaks corpus}
}