Regional President Speech

FROM: RELEASED FOR PM’s TEE AMERICAN BANKERS ASSOCIATION TUESDAY, OCT. 8, 1963 THE NEWS BUREAU George J. Kelly, Director A.B.A. Convention Headquarters Room Wk02-h, Statler Hilton Hotel Washington, D. C. Phone: Executive 3-1000j Ext. 1053* 105^ ADDRESS OF M. MONROE KIMBREL President of The American Bankers Association, before the First General Session of the 89th Annual Convention of the A.B.A., Constitution Hall, Washington, D. C., Tuesday Morning, Oct. 8, 1963. Mr. Kimbrel is chairman of the hoard, First National Bank, Thomson, Ga. For several years now, it has been the custom to schedule the report of the president at the start of the first general session of the convention. This practice, I have decided, is primarily for the benefit of the president, and I can think of at least three good reasons commending it. First, the president, by speaking at the outset, cannot possibly be embarrassed by repeating what someone else has said. Second, it takes the pressure off the president so that he can conduct the rest of the program in relative ease. The third, and perhaps the most important reason, is that someone long ago decided that it is impossible for the president, within the few minutes allotted, to cover all of the activities of The American Bankers Association during the course of a year0 Leading off the program with his report permits others to develop items of importance that might be omitted. We changed the order slightly this year to give primary attention to the Centennial. In these next few minutes I want to discuss some of the activities and events which took place during my year of stewardship. However, before doing so, I want to take this opportunity to express my thanks to the many people who have helped make the past two years so rewarding and enjoyable. Digitized for FRASER (More) http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ADDRESS OF M. MONROE KIMBREL 2 As some of you may recall, last year in Atlantic City -when I accepted this position, I pointed out that I would have to run to keep up with the pace set "by Sam Fleming, my predecessor, While serving with him as vice president, I had learned to strengthen my stride. During the past year I needed this longer stride to stay ahead of my running mate, Bill Kelly, who as you know is another big man who moves quickly. I am sure that Bill is going to make an excellent spokesman for banking. To Dr. Walker and the staff of the association, I want to say that I appreciate your efforts perhaps more than most bankers, because I had the chance to work closely with you on more matters than some of my colleagues. I also want to thank the many bankers who did such excellent work with the various committees and divisions. These men who devote countless hours to association work make an immeasurable contribution to the associations effectiveness. Nita, my wife, whom many of you have met, has afforded understanding and support far beyond the terms of her contract. When it was impossible for her to keep up with me, she did the next best thing--she put up with me. As you know, our meeting here in Washington brings to a climax the Centennial celebration of the dual banking system. Much has been said about this already, but I do want to add one point. That is, in my opinion, the Centennial was not only the largest, but the most successful public relations and public education program ever undertaken by organized banking. Moreover, I feel confident that some of the momentum gained by banks working on Centennial programs will continue to help us keep the public informed about new developments, new services, and new ways to be more useful to the communities they serve. Turning to other matters, it is evident that the pace of activity has quickened in many areas. The trend toward retail banking has continued to accelerate. More banks, for example, are participating in mortgage lending (More ) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ADDRESS OF M* MONROE KEMBREL 3 activities. To help hanks in their efforts to establish or expand mortgage operations, the A,B,A, in August opened a National Mortgage School at Ohio State, Over 1^0 hankers attended the first session, and these students will return for a second week next summer. The early reports on the school have heen extremely favorable, and I feel that the association is filling a major need by conducting this program. In addition, the association^ proposal for creating two federally chartered corporations to insure and deal in conventional mortgages was discussed in recent hearings conducted by Senator Sparkman, After the hearings, the Senator stated that he felt that effective secondary market legislation would be passed in the next session. The net effect of such legislation would be to make conventional mortgages much more marketable and liquid. This would be of great assistance to all mortgage lenders, and particularly the small banks. Along with the increased interest in mortgage lending, bankers have been expanding their role in the instalment credit field. Here again, many banks have found that they need additional qualified instalment lending personnel. To help train these people, particularly in the beginning and middle management levels, the A.B.A. has approved plans for an instalment credit school, which will cover all subjects related to instalment and consumer credit, including direct and indirect financing, both wholesale and retail, technical and operational aspects, competitive practices, collections, costs and business development. The location and opening date of the school will be announced in the near future. The growth of automation in banking has confronted many bankers with complex questions. Should I try to automate some of my operations? What is the best method? How many operations could be automated? What will it cost? What is the best time schedule to follow? These questions will ultimately have to be answered by each banker facing them. However, in response to the growing demand for assistance in this area, the association has established a department of automation (More) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ADDRESS OF M. MONROE KIMEREL k and market research* This department has already outlined an intensive program that, in my judgment, will greatly "benefit the nation1 s "banks. Next month in Chicago, this program will "be kicked off when the A.B.A, sponsors its first annual three-day working conference on automation for "bank operating officers. With the rising demands for capital for the nation*s farmers, many small banks have found that they must rely more and more on their large correspondents. To acquaint some of the larger hanks with the problems faced by banks serving agricultural areas, the A.B.A., for the first time, held an Agribanking Conference this year. Those who attended the meeting thought it was extremely helpful, and similar conferences of this nature are being considered. In his report to you tomorrow morning, Dr. Walker will discuss some of the current issues relating to bank legislation and regulation. Today I just want to say that our Washington office is now close to full strength; staffing at the senior level has been completed. We are proud of the team that has been assembled. I urge you to make use of them. When you have questions concerning Federal legislative or agency items, get in touch with Charlie McNeill or one of his staff. This procedure is particularly important when the association takes an action of which you*re critical. Many times the factors entering into such decisions are quite complex and can only be adequately explained in personal correspondence or conversation. These, of course, are just a few examples of what your association is doing to help you meet some of the problems that confront the industry. I could go on almost indefinitely discussing the other projects, conferences, schools and work­ shops organized by the A.B.A, for your benefit. However, rather than dwell on these continuing programs, I would instead like to spend the remaining portion of my report discussing some broad matters of interest to banking. Most of you have observed, I am sure, that during the past few years the banking industry has become more willing to speak up on national economic issues. (More) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ADDRESS OF M. MONROE KIMBREL 5 Our philosophy, simply stated, is this: unless we are willing to enter public discussions of matters that have a direct effect on our economy, we have no one hut ourselves to blame if the discussions end with policies that we do not like. We have found that our views on a broad range of issues are not only welcome, but are frequently sought by members of Congress and by the departments and agencies of Government. Moreover, whether we support or oppose specific proposals, our positions, when made known, have invariably helped to increase respect for banking, During the past year, we have joined the debate on many national issues and national problems, For example, when we were considering various ways to mark the official opening of the Centennial year, we decided that the most significant contribution that the industry could make would be to sponsor a Symposium on Economic Growth right here in Washington. The symposium was directly responsive to President Kennedy’s call for a dialogue between business and government on what this nation should do to further economic progress and, in the opinion of bankers and speakers who participated, was highly productive. The proceedings, of which about 20,000 copies have been distributed, have been acclaimed by economists and teachers both here and abroad as a major contribution to economic and financial literature, I don’t think we have ever undertaken anything that demonstrated so clearly banking*s interest and role in furthering economic progress. The President’s remarks at the symposium constituted a spirited defense of his income tax cut proposal, which had been presented to the Congress only a few weeks earlier. As you know, the President’s proposal called for a $13.6 billion cut in Federal income tax rates, applicable to both individuals and corporations, and a number of structural changes which would recoup $3*^ billion of the reduction. Thus, his proposal called for a net reduction of $10,2 billion. (More) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ADDRESS OF M. MONROE KIMBREL 6 The position of The American Bankers Association on this matter was formulated more than a year ago, as a result of deliberations by our Economic Policy and Administrative Committees, and confirmed by resolution at our convention in Atlantic City, At that time, we adopted a resolution recognizing the need for a tax reduction. We stated that it would foster incentive and job-producing investment. However, we also resolved that four safeguards should be observed in the transition to lower taxes. In shortened form, they were: (l) That the cut be tailored to provide for sustained economic expansion, rather than simply provide a one-shot boost to the economy; and thus the reductions should be both substantial and permanent. (2) That tax reductions should be implemented within the bounds of fiscal prudence. That is, we felt government spending over a protracted period should be strictly controlled. (3) We stated that the shift to lower taxes should be spread over more than one year. And , (*o our resolution stated that the implementation of the program must be accompanied by a willingness to employ maximum flexibility in the use of debt management and monetary policy, including a willingness to rely on market forces for the determination of long-term rates of interest. The President submitted his tax proposals in January of this year, and I immediately appointed a special committee of outstanding bankers to study the Presidents proposals and see how close they came to meeting the criteria set forth in our resolution. The report of this special committee was adopted unanimously by the Administrative Committee in February and provided the basis for Dr, Walker*s testimony before the House Ways and Means Committee in March. The substance of this testimony was that, unless the Congress could find effective ways to level off Federal spending, no major income tax cut should be enacted at this time. On the other hand, if spending could be held stable during the period of transition to lower tax rates, the burden on enterprise and initiative (More) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis ADDRESS OF M. MONROE KIMBREL 7 would have "been reduced in a fiscally responsible manner. The normal growth in Federal revenues that occurs from year to year, instead of having been used for greater spending as has been the case in each year since 195^+j would be pre-empted for growth-producing, job-creating tax reduction. I describe these events to you in some detail for two reasons. First, I wanted to show you the thoroughness of the policy-making progress in the A.B.A. I assure you that a comprehensive analysis of the issue was made by the staff. Then this vital matter was discussed from every angle, debated at length, and disposed of only after every viewpoint had been heard and weighed. My second reason for describing these events in detail is to demonstrate to you that the efforts of your association in influencing public economic policy may be bearing fruit. Our impact, of course, is difficult to measure. But the proposed cut is— as we recommended— substantial and permanent. It is spread over more than one year, thereby reducing the immediate fiscal impact. Moreover, there are indications that both the Congress and the Executive branch will, in the future, exercise a tighter rein over Federal spending. Whether this rein will be tight enough to make so large a tax cut fiscally responsible we cannot say at this time. But I assure you that association spokesmen will, before the Congress and elsewhere, continue to argue strongly for fiscal restraint as a condition for sound tax rate reform. Tie next forum for such remarks will be the Senate Finance Committee, which will begin hearings on the bill next week. Your association will present these views to that committee. I might, as a final item in my report to you, mention one other aspect of our relations with government— an aspect that, although relatively minor on the surface, has far-reaching implications. Within the past two months I have sent two letters to the Chairman of the House Banking and Currency Committee endorsing the objectives of surveys undertaken by that committee. I have urged the banks which have received the long, detailed questionnaires to respond to them. Being associated with a small bank, I fully Digitized for rFReAaSlEiRz e that answering such questionnaires is costly and time-consuming. http://fraser.stlouisfed.org/ (More ) Federal Reserve Bank of St. Louis ADDRESS OF M. MONROE KBffiHEL 8 If this is the case, why do I ask hanks to respond? Obviously, the Congressional committee which has distributed the questionnaires possesses the power of subpoena, which if used could force banks to respond, but there are other reasons. First, as most of you know, I have been close to A.BoA, legislative matters for several years and, as a result, I have come to have a very high regard for the United States Congress and the committees which are, in fact, the backbone of the legislative process, I feel that it is incumbent upon me as president of The American Bankers Association to provide the fullest measure of cooperation to any Congressional committee which is seeking to gather information in the area of its responsibility. We have a fundamental responsibility to the people of this nation— and this means to their representatives, the United States Congress-which we cannot ignore. My inquiries have assured me that these recent questionnaires are properly designed to gather important information. Moreover, these surveys have the full backing of the Congressional committee under whose name they are being distributed. Furthermore, the A.B.A. staff has made many suggestions to decrease the burden on responding banks. These were accepted by the committee?s staff. Thus I repeat my urging. It is in the public interest, banking*s interest, and your interest to cooperate fully with any Congressional committee investigating matters in its legitimate area of interest. This is my view. It is the view of The American Bankers Association. Approximately one year ago today, in Atlantic City, I assumed the presidency of The American Bankers Association with a deep feeling of humility and a strong sense of responsibility. That feeling has, in the past year, not lessened but increased. I stand before you today humble in the feeling that, of the many challenges that confront us, my administration has been able to respond to only a few. Nevertheless, I do believe that American banking has made progress in the past year, and for this full credit must go, not to me, but to those bankers and staff members who have worked tirelessly in your interests. I thank them. And I thank you for the privilege of serving as your Digitized for FRASER http://fraser.pstrloeusisifedd.eonrgt/ Federal Reserve Bank of St. Louis #

Monroe Kimbrel (1963, October 7). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19631008_monroe_kimbrel

@misc{wtfs_regional_speeche_19631008_monroe_kimbrel,
  author = {Monroe Kimbrel},
  title = {Regional President Speech},
  year = {1963},
  month = {Oct},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19631008_monroe_kimbrel},
  note = {Retrieved via When the Fed Speaks corpus}
}