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COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
Minutes of Coaimittee Meeting, Tuesday, May 24., 1955
Brookings I n s t i t u t i o n , Washington, D. C.
June 7, 1955
TO: Messrs. Allan Sproul, Chairman
V. Randolph Burgess
Robert D, Calkins
F. Cyril James
William McC. Martin, Jr.
Walter W. Stewart
Joseph H. Viilits
Tne Committee convened for a luncheon meeting at 12:/,. 5 p.m. in a
private dining room at Brookings. Mr. Allan Sproul> Cnairman, Mr. William McC.
Martin, Mr. V. Randolph Burgess, Dr. Robert Calkins, Mr. Winfield Riefler and
Mr. Donald Woodward were present. So was Miss Mildred Adams, Executive Director. The unavoidable absences of Dr. James, Dr. Stewart and Dr. Wiliits were
noted with regret.
After celling the meeting to order, Mr. Sproul reported on matters
discussed end action taken at two meetings of the Executive Committee (February
21st and May 4-th) held since the latest full Committee meeting on January 29th.
These included:
(e) A report on methods and costs of collecting papers followed by
"oolicy suggestions and a recommendation that the Committee consider appropriating $11,000 for estimated costs over the remaining life of the
project. Tho uommit^ee accepted the recommended policy and approved the
appropriation.
(b) An account of conversations with Columbia University looking
toward the establishing there of a center for collections of papers concerning the New York banking world. Mr. Sproul reported that these conversations were still inconclusive.
(c) An invitation to Dr. Shepard Clough to join the Committee; Dr.
Clough is in Europe and further action has been postponed until his return.
(d) A recommendation that in accordance with Brookings practice the
Committee adopt the policy of paying consultants $50 a day, with suitable
variation allowed as needed. The Coirardttee accepted this recommendation.
(e) A discussion of the timing and possible content of the annual
report to the Rockefeller Foundation. It was agreed that Dr. Calkins and
Mr, Woodward should make an official call on Dr. iMorman Buchanan, incoming
head of the Foundation's Division of Social Sciences, at an appropriate
date in July. It ^a.s requested that copies of tne report in draft form be
submitted to the Committee for their suggestions.
—2—
Reverting to this Committee's unfinished business, Mr. Sproul reported
that Br. Cyril James regretted his inability to accept the Committee's invitation to write the history and direct the collateral studies. Thereupon the
Executive Committee, in its meeting of May 4.th, suggested, that the Committee
shift its point of immediate attack from the history to the monograph approach
and seek an executive editor who might give the monograph plan proportion and
direction. Mr. Donald Woodward wes asked if he might find it possible to
undertake this, but advised the Committee he cannot free himself from other
commitments.
As an alternative it was suggested that, still holding to the
monograph approach, e. sub-committee be appointed which, in the course of
meetings to be held in the near future, would block out areas of interest, set
the monograph pattern in order, nominate possible writers and report its findings and recommendations to the full Committee.
This idea having been discussed and approved, Mr. Sproul suggested
that the editorial sub-committee be composed of Dr. Calkins, Mr. Woodward and
Dr. Stewart, with Mr. Riefler a reserve possibility in case Dr. Stewart found
himself unable to serve. This was approved. Mr. Sproul was asked to get in
touch with Dr. Stewart at once.* It was egreed that? as speed is desired, the
sub-committee would try to have a plan ready for Comirittee discussion by mid-*
July.
Suggestions were made that \jord of the monograph approach be sent to
learned journals as a way of discovering interested writers, and that the subject be presented at the December meeting of the American Economic Association.
Interest was general, but no action was taken.
A financial report was presented in two parts - a report of expenditures for the current year, with actual figures for nine months and estimates
for the other three, and a tentative budget for 1955-56. The budget, calling
for a total expenditure of $65,675 for the year was passed in principle; at the
same time a measure of flexibility in detail will be allowed in view of the
changing plans for 1955. Miss Adams' salary was raised $500 per annum "in
recognition of services."
Existing appointments to the office staff were confirmed as follows:
Miss Adams, Mrs. Singer, Miss Burstein were reappointed for the year July 1,
1955 - June 30, 1956. Miss Burnett was reappointed for 4. months in 1955> dates
not specified. Dr. Calkins observed that it might become necessary to reconstruct the present office plan when monographs were commissioned and monograph
writers needed service.
A preliminary report on possible publishing costs and arrangements,
requested last autumn, was presented by the executive director for the information of the Committee when needed.
* Mr. Sproul subseauently advised the Committee that Dr. Stewart had accepted
the appointment.
-3The Annual Report to the Rockefeller Foundation, now in draft form,
will be sent to all Committee members for their reading and criticism before
its presentation to the Foundation by Dr. Calkins and Mr. Voodward,
In recognition of the 70th anniversary of Dr. Stewart's birth
(May 24, 1385), Mr. Riefler vas asked to draft a telegram of affectionate congratulation. This was sent after the close of the meeting.
There being no further business, the meeting was adjourned at 2 p.m.
Donald Woodward
Secretary
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
April 27, 1955
Messrs
M l l l t a HeC. Mfertin, Jr#
Vinfleld V. RUfler
Walter V. Stewart
Following our various telephone calls io vhieh v
«tter:pt*d to set a Coiair.lt tee a siting dat« which vould be convenient for «ir«xyon*, you v i l l vant to know thmt V»dn«Bday,
24th, Is the first dete for viiich we could g«t g«n«ral
Ve h&ve therefor© set 12145 p*«* on V«dn«pd«y,
M«y 2^thf In the private dining room of the BrookingB Instl*
tution for a lunoheon aeeting. Thia hour l i teaUtive,
u l l l be confiiwed latter*
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE STSTEM
AGENDA FOR COMMITTEE MEETING
May 2k, 1955
12tk$ P*m.
Brookings
Minutes
Of the previous meeting January 29, 1955 at Princeton. (These Minutes
were distributed March 1, 1955. The Secretary has a copy.)
Reports On
Old Business
Invitation to Dr. James
«
Hew Business
Recommendations of the Executive Committee
2/21 On methods and costs of handling papers, that
1) the Committee consider appropriations only for the
purposes of setting papers in order and handling them,
but without the elements of study or evaluation proper
to an historian.
2) on an estimate of 10 major collections to be discovered
•which might need a substantial subsidy for handling and
10 smaller ones on which smaller sums would suffice, the
Committee consider appropriating $11,000 over the five-year
life of the project.
5A
On plan of proceeding via an executive editor
Possible interest of Mr. Woodward in this post.
Alternative suggestions
Financial report
Expenditures for 195h-55 (last three months estimated)
Tentative budget for 1955-56
Staff appointments for 1955-56 (Secretary has list)
Preliminary report on possible publishing costs and arrangements
(requested last autumn$ presented now for information only)
Annual Report to the Rockefeller Foundation (now in preparation Executive Committee to advise on and approve?)
Recognition of Dr. Stewart»s 70th birthday today ? (May 2k> 1885-1955)
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
c
Itooort
.
Hay 23, 1955
Pnhlt«h*i»« ginA
At the request of the Committee, your research director has*
the course of the last several souths, discussed vlth publishers of various
types the publishing problems which will arise as a part of this project* the
H a t includes U commercial publishers (Harcourt Brace, Harper Bros., W. V #
Norton and McGr* w-Hili) y the head of a book distributing fine (Book-of-theMoath Club), 1 university press (Princeton) end 2 foundations (Brookings end
Twentieth Century Fund), of vhich one does its ovn publishing Vitle the other
used to do its ova publishing*
From a strictly practical point of view, it vas perhaps too early to
get full value from these conversations. Ve do not yet know nov many books are
to be published, who is to be the chief historian, what are to be titles or
even, except in general, -what Is to be the content of those books* Until these
questions can be answered, it is difficult for any publisher to give an opinion
on vhich plans can be built* let, given this baste difficulty, it has hem
interesting to see how much time commercial publishers were willing to devote in
discussing it* Their advice and their suggestions varied, but without exception, the problem caught their attention and held it.
c
In the course of these eonversations, certain areas of general agree*
first, it w^s agreed without exception that the project vould benefit from
enlisting the services of a single publisher to handle all books and manuscripts resulting from it#
Second, it was generally agreed that a common dress for all the books would
both ettaraet the eye and help cut costs* (Book design is a considerable
Item In publishing expense*) One ublisher vent so far as to speak of the
•dignity end monumental aspect" vhich come vith putting such a group of
volumes into series*
third, it was generally agreed that it would be veil, once a publisher had
been chosen, to enlist his help In planning the book in advance of writing*
There are savings of editorial time to be made if a uniform style sheet It
set op for 'the guidsnee of all authors working on various facets of the
project* (Style in this sense has to do with spelling, the setting of
tables, capitalization! and so forth*)
Fourth, on the matter of sales to be expected and costs, it was believed
that the books would probably not have a vide enough public appeal wo that
they could be counted on to psy for themselves, the Committee should
therefore be prepared to provide a publishing subsidy*
C
C
However, It should be noted that agreement on this fourth point, -while
general, was ty no means absolute. One publisher advised that such an idea
«i$it present a psychological handicap to the Committee uhleh -would do more ham
than good. His advice we.8, "Atoit to yourselves that you may have to subsidize,
but by no means assume that you must*"
Diverse Opinions
Subsidy
Outside these areas of agreement, the adviee m& opinion contributed
with such evident good will varied widely. Some of the commercial publishers
expressed themselves as preferring to have the books they publish stand on their
oim feet and not liking the idea of subsidy. Others tolerated subsidies, &n& a
third group, vliile not soliciting th«a took thm for granted in the case of books
slight perform a public service but could not rely on a vide popular appeal*
the most interesting contribution on the matter of subsi<tr v&s the
suggestion that i t could b® direct or indirect* % indirect subsidy the speaker
meant the promotion m& guarantee of a certain volume of sales in advance of
publication* He vent on to say that i f the Federal Reserve System would inform
their member banks that the history and i t s attendant monographs were volumes
which every member bank should have, subsequent promotion effort should be able
to secure a pre-publication guarantee of perhaps 6,000 copies* To these would
be added college sales, library sales and so on, making a total sale of perhaps
10,000 copies of each volume•
I t should be noted that this suggestion ease not from a publisher but
fro® the head of a nous® (Book~of-the-Month Club) vhlch distributes the books of
other publishers* In looking at the venture as posing a problem for promotion
and distribution rather than a publishing problem, he not only widened the prospect of possible readers and lightened the subsidy burden, but also made a nev
suggestion in the cost sector*
The figure of publishing costs i s a complex of step-ljy-step costs including copy-editing, composition, i^pe-setting, paper, pressvork, binding, advertising, promoting, etc* These seem to be separable to a surprising degree*
The suggestion of the distribution expert i s that the Committee might save money
toy going, manuscript in hand, to a book manufacturer i*ho would set the book up
and make the plates* The next step vould be to take the plates to a publisher
for the processes 'feat follow*
The publishing approach to the cost problem varied from a careful
estimate of price per page to a general all-over guess* These are based on an
edition of 2,000 to 3,000 copies per volume, vhich seems, vith the exception
noted above, to be the general estimate of the number to be sold*
V. ¥• Horton, a firm utiich does not like to publish subsidized books*
estimated roughly that the cost of a two-volume history, such as the Coraadttee
has in mind, including th© necessary charts and tables, might be $7,500j this
figure does not include tee costs of composition* I t i s comparable to a figure
mentioned by Harper Brothers* I t can not, hovever, be taken as cost of subsidy «
ft Matter for vhich close bargaining i s recommended*
-3MtaQraw-8111 Book Company has made arrangements on other project*
similar to those "which we were discussing with them. They are now publishing
the work of the Committee on Economic Development. They estimate th&t a 1,500
page, 2 volume history, 3,000 copies, would cost $22,AT?* As for monographs,
one of 250 pages, 2,000 copies printed, would cost $3,&32. As for the item of
subsidy, they suggest a 35-40$ formula in vhich the sponsoring agent (that i s ,
the Committee) would p&? for composition, copy-editing, paper, pressvork and
binding. She payment goes into a debit fund, &n& a return credit of 35-<4$# of
the net price i s set up. Vhen the credit rises to the point "where i t equals
the debit, the company begins peying a 35-40$ royalty. In this arrangement,
th© publisher assunteg costs of overhead end distribution*
the Princeton University Press, which handles the books and pamphlet*
for the National Bureau for Economic ftese&rch, thereby finds i t s e l f so heavily
loaded -with economic publications th&t they would not be interested in publishing
books for this Committee, They were, however, Interested in the problem. After
some figuring, they produced 6 rough estimate of costs. They said we should
figure on $8*50 per pftge for an edition of 2,000 copies plus binding costs of
$1,000, On 1,500 pages, which i s -what a two-volume history might contain, this
would Bean a manufacturing cost of |13,75O.
C
I t should be noted that this i s aot the figure asked for subslcfy. I t
l a a cost figure, and against i t would be balanced whatever sales the Frees was
able to make* Princeton did not, however, as does McGraw-Hill, suggest that i t
would be satisfied to get the manufacturing costs back. They feel t£iey should
be reimbursed for nan-rienufecturlng costs as well; the non-manufacturing costs
run about equal to the manufacturing costs* This would mean a rough total for
the history slone of $27,500, which i s comparable to the McGraw-Hill estimate.
Against figures life© these, the Brookings estimates are more cheerful*
Br. Celkins says that, In general, they run 30$ under other estimates; in this
instance* they ere much lower; i f foundations will pay the printing costs,
Breakings can usually break even on publication. An issue of 3,000 copies Means
#5,000 to $7,000 for printing costs. Of t h i s , the Co»mittee would not be ex*
peoted to provide a subsidiy of more than $3,000 to |4,000#
Other Considerations
Several other items raised in these conversations should be reported.
They coae under four headsi tax considerations, style, readability &n& scholarly
The question'of tax accountability was raised by the young men at the
Princeton Press. They warned that we may run into a tax problem if we try to
subsidize a eosneroial publisher. This detail, not mentioned before, needs further exploration*
In the metter of style, used here to denote the way a book is set up
asd the general dress which is given it, the Me(iraw-H!ll Company ranks high.
They have been leaders in lifting books on economics out of a traditionally dull
dress* They devote a great deal of attention to size of type, setting of tables,
design of dust jacket, design of the whole book, so ®s to make a dense and difficult subject look more attractive to tfee eye of t&e purchaser and the reader*
Thig factor plays a real part in the paleabilitgr of a book.
c
y i s a factor much stressed by the Twentieth Century Fund,
but eofiffii&ndlng l i t t l e attention among most publishers of books on ©eonosde and
monetary subjects. I t seems to be generally assumed that anyone vho will pick
up a book on those subject© i s prepared to move through thorny hedges of obscure
prose. At the same time, Mr, Grdvay T«e4 of Harpers spoke admiringly of the
lucidity with which Mr. Handolph Burgess v%teej he wishes that a l l writers of
books on monetary subjects would be as d e a r and readable.
Scholarly responsibility - this matter has been discussed in Co&siittee
neetings before now. If the Brookinga Institution should publish books resulting
from this project, their plan for ©eeuring scholarly responsibility, \&ich h&6
been explained to the CanE&ttee, vould probably be used.
XT.
As e result of these exploratory talks, the following recommendations
can be made!
H r s t , that, ae between the three tgrpes of publishers, the Cosaaittee narrov
i t s field of choice by dropping out the university presses. For this project, Brooklnge Institution, "which operates t non-profit press, offers tfte
chief advantages -which a university press can offer - prestige, scholarly
judgement, academic connections, subsidised r a t e s .
Second, the.t the decision es between a commercial publisher $at& Brookings
be undertaken in tvo steps, f i r s t by selecting the comaerciel publisher vho
i^ould seem to promise most for this project, &n& second by comparing the
advantages he offers with those offered by Brookings#
third, that In deciding as between eoss&erclal publishers, the Commit tee
• ley more stress on s k i l l in promotion and distribution of books than on
traditional prestige. In the laaaufacture of these books, publishing competence v i l l certainly be required, but their promotion and distribution
v i l i call for the services of a genius*
Fourth, that in considering the matter of subsl^f, the Committee
further the practicality of the indirect type, with i t s pre-publication
guarantee of * vider distribution than seemn to be contemplated by advocates
of a direet subsidy, the services of an expert in this technique may come
high, but the advantages of -wide distribution are so great as to sore than
counter-balsnce the expense factor.
C
o
Cost
All estimates 1tesed on 2 volim*.
Promotion and
Distribution
Costs
Total
$22,477
(35-40% subsidy required} 35-4036 of
net price of each
•ale to be credited
against this* When
subsidy repaid, a
35-40S& royalty to
be paid)
$13,750
($8*50 per page,
$1,000 binding
costs)
#5000-47000
(of which
$3000-414000
subsidy re—
quired)
17,500
included in above
figure
$13,750
(estimates an
aaount equal to
uanufiicturing
costs)
no charge
no chari
$5000-47000
17,500
$7,500
(does not include cost of
composition)
$7,500
Harper
& Bros.
frr^noeton 0. Press
McGraw-Hill
no charge
j
Brookinffs
¥. V. tforton
•
1,5000 pages, an edition of 2,000-3,000 copies
$22,^77
$27,500
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
o f ffnggegted
Mr. Sproul hasfee**approached for a roluae of papers on policy natters.
Mr* Burges® said l a s t July that he xms thinking in tents of a smell book
t@ be called, *fh© Federal Eeserre and the Public Interest*•
. ••
Malcolm Bryan o f A t l a n t a h a s s a i d , more o r l e s s s e r i o u s l y , t h a t ha vould
l i k e t o do e "Statement o f Federal Reserve Problems, v l t h some H i s t o r i c a l
Illustrations.*
tester Chandlor says there should be & volisae on the 1929 Stock Market
the Federal Reserve, possibly including the years through the Banking
Holiday, the recent voltne by Dr. Galbraith I s too quick and superficial
to be of much use*
Bray Hammond has recently subnitted a memorandum suggesting the following
TQWP Konographsi (l) the statutory evolution of reserve requirements from
1694 (incorporation of the Bask of England) to present} (z) The Bound
Money agitation prelusive to the Federal Reserve Aetj (3) The Collection
and Settlement Function of the Federal Reserre Banksj ( i ) Branch Banking
end the RegulatioR of Group Banking«
l»«oaard ©• Vaite, political scientist of the loiversit^' of Gliieago
of a trilogy concerned vith edainistr&tive history, of vhieh the
volume has just von a Bancroft Prise), has been suggested as the mam to do
a Bonograph on the Federal Reserve By stem a® a ease study i n public edmintstrattoa*
George Eddy, nov in the Treasury, end Villiem adeais Broun of Brookings
have been suggested as possible authors of a monograph on gold as of now.
Philip Bell of H&verfard (author of a coming book on the sterling area)
has been recommended as author of a monograph on the Federal Reserve in
international dealings of the United States* Miroslav Kris of the Jfor Xork
T®d*mXfanmrwQBank and Gardner Patterson of Princeton have also been suggested for i*ork in the international aspects of Fe€eml Beserve a c t i v i t i e s ,
the Federal Reserve and International Finance, etc*
ET, John ¥llliems i s said (ty hi© secretary) to be now willing to do a
&onogrft$fe l a the Federal WMmrre series f i f properly approached* aiad a l lowed to choose his ovn subject*
iteil Warburg, in 1915, had compiled an unpublished History of the Bankers*
icceptances 1 Segulatios, vith careful analysis of varying attitudes within
x\$ Board, v-hich vould stake an excellent springboard for an historical
rfftv of the use of banker** eceeptances vi^iln the %stem« (Thle has just
tamed up i a Warburg papers given to Kr* George larrisoii) *
Voodlief Thomas is said to have collected a mass of material on brokers1
loans in the early period vhlch vould form the basis for * monograph on
those loans*
Br# Stetwrt has suggested that the executive director do tvo reportorifcl
monographs, one on the Bevelop&ent of the Research and Intelligence Functions in the Board &nd the Banks} the other on the Regional Aspects of the
Stf st«n - their Character and Value*
Howard Haekley of the Board legal staff is now •working on an outline or a
memorandum for a monograph on the Legal Aspects of the Federal Reserve Act*
In addition, we have & chronological list of possible titles from Dr«
Elmer ¥ood \&lch Is suggestive!
the Founding of the Federal Reserve (which might or taight not be
combined vith the Operations during the First World War)
The Development of Federal Reserve Policy during the nineteen
twenties (into the classic f o m in vhich B, Strong left it)
International Monetary Cooperation of the Nineteen Twenties
The Crisis of 1929 to 1933 and the Recovery
- .
the Federal Reserve Systm and the Treasury, vith Special .; ' •..
Reference to the Period since 1933
•Then there might b© a History of Federal Beserve Procedures and
Policies for the period a$ a tihole, ^Mch> though not attempting to
cover ell the source aaterial, vould get some of the cream* but in
the aedn would be analytical. Of course Karl (Bopp) ought to do this|
but if not, he ought to keep In very close touch vith it«*
May 24t 1955
through
/
£xp«adltares
'30/55
$21,3^3,0®
Bxp*n*M ( o f f i c e and
Brooking©
4,450.00
Oir ndler-Strv*>ng
Contingency
1,997.17
•53*325.00
#31*725.56
#42,149.51
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
wmxxnw&as •
2Mb
(
x)
for 1955^6
for 195V56
TENTATIVE BUDGET - 1955-1956
Salaries
Adams
-«<;; Singer
Bur stein.
Expenses
Office
Travel
2,500
3,500
Brookings Overhead Allowance
3,000
Projects (in work)
Chandler
5,000
Burnett (4 mos.)
1,237
McKinstry (bib.eat,) 2,700
8,937
Contingency
Conferences
2,000
Unallocated
Total
a/ Budget for 1954-55
Estimated Expenditures
(as of May 1954)
Underrun (est.)
Budget for 1955-56 (original)
$53,325
Budget for 1955-56 (Revised)
$65,675
42,150
11,175
54,500
»
A"
L'fr- c tJX uj
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
\
Copied far ' •
t*@ii3ittft# K i t i n g
1955
to
i»rli#y ftgiod (fno
Stltriea and
Contrecta
1*6,000,
Costs
ToUl
#300,
Mr
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
STAFF APPOINTMENTS
Hiss Mildred Adams
Appointed January 15, 1954 to May 1, 1954
fteappointed May 1, 1954 through June 30, 1954
Reappointed Jul^ 1, 1954 through June 30, 1955
Mrs. Ellen C. Singer
Given temporary appointment September 9, 1954
to December 9, 1954
Eeappointed December 9, 1954 through
June 30, 1955
Miss Irma Burstein
Given temporary appointment November 19
1954 to February 1, 1955
fieappointed February 1, 1955 through Jun« 30, 1955
iHHHHHHHHBHHKHHHHHHHf-,
Miss Marguerite Burd^tt
Given six-month appointment October 15,
1954 to April 15, 1955
Reappointed for two months, April 15 to
June 15, 1955
(To be reappointed for four months at
unspecified date in autumn)
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
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COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
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COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
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tuUoa in suiting i t |.«i@lbXe to eoetbia* ^ « , i l o t «Ad th« fir*-ye«r grant»•
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Mr, 0prouX tfeum *«k*a Dr. X w l lopp, a t It««4 of
for diacuatjioii tis«lr jstsio-outlia«f v5iloh h#d b*«a **«t to
for iA*ir r««dii^ * v««k in
furfier
pv, ^ ^ for tin* Coast %*••'« three ndvifterft* presents t i e l r
an e rough ©Hronologf of FadersI R<t6*rT* history, lat«ft<i«d to ;,
rathor ta*A to biad %ua «Ye«tu&i historifta in asy «*/• H« then
g to r®ad aloud th« sLOPO-outiln© jj&mgrtph hj pur&grapii **ith P«%NI for C
t»# eootteat* *• £>roc<Kiur« ^.leri (vdt.i ti£» out for lunch hour and a basin***
ft«*tiBg) X**t*4 throughout th*
t h i s T t r ^ t i A r^i^ita h»& bwx distributed to «»ch »«ab«r of th« Coci^ittcc
w«lX &s to tiic con£iait#.iitfc, T^k*n ^1th the R&7,o-outiins, th^
llty th«»« Eiirmt*»j bot^i #iiJ. b« ineorted in the Kinute Book.
p
v*«r« &&d« vhieh b#ar on Co@&itt«# vork en€ should
here*
(«) fir. «l^i9*i #:^e<Nl i f th* Fwltwd E«i#rr# Ho^rd or tht »»v Xortc
of w* ^rojcei, ##t&blish &n ere ,iv«s unit In their
Ki#fl#r, n>^fing for th« HoAr^t ml6 th«t %4il
to r©s«»rc t,. ttiey migfet b« b«mp«r«<! by sp«c« Xiid.t«tl0f$§, Hr. Sproui
the »«* lork B?^ak ^ft4 he<5 in isind for y«ar» tht d^^trebllit^ of d#area!*** &* 61 istiact from riles *nd recordej ta*y hope to g«t trm this
project th» !<!•&& tmd tb« itr^ttig to go t&«#id with li«
br* J«m«p also tsXed wafitisr the Fnd#i^X Keacrv^ JJi-nkc Jiad
th# ?iloWr.i.Kii-UJ-be cu;iid conduit th« directore 1 Minute Haok#f vi\ich
hold cniCl^i ovIUfeiiCf-, - Hr» H#fX^r mpli«d tor tha Ho&vd th#t judg«e«at t s to
uq&t to <ii0©io#« -would b« on «n &d hc« b&aie, vith t h t Bo*rd dl«pod*d to b«
««tlnig«# Mr. S l
Xork lMaikf feut
t i e s oftd not b@©a put in prsclse tsnit to the other banks* $r* tfttrg«6
of Oi^cuaaloti voiy.d be found recorded in siinut^ books.
Mig« *dfeja« t3KgU«iii^ Vie potej.tlfii. p e r i l to research 3ietKrI&l
by th^ t«rs@ of tbn F»derftl E#atrrn $6h«fhile for Instruction of
S
v i l i s«$ t^ftt r®&8diiU. netioja i s takon oa this point.
Kr« Burg«ss brought ap tlie n»ed for r«vl»v of the hi story ~
bjr a eoapatest ^ v i s o r / group» At th© Chftliunn's r#cra«i8t, 8r» C^Iki
Brookifligi> proo«<iiunr of us ^dvisiorjr oooalttec *nd/or tho eirouletioo of
for ooiem«at* ^rfc %roal a£3ttrw4t the gro:ip thftt th^ Cot^Rltt^o
in mind a.nci #ita#r ue# th« ttrookiag» proo#d«r« or another
it*
a>ftnation
# ia
t«i«vidloA s i t t i a g room for * bu*ia«»» ateiion under the
of Hr« p
of tlt« aiwrlmif! »#««iim (hftld Ho^siBb^r 22f 1954) Hadfe«#Jid l t -
Kr* Sprrml reported the following decisions of Hie Executive
at i t s seating on B»o«sb«r 2&f 1954*
On caXlcatlong of paps-rg uncovered in the work of th* research director*
that &n overall pl»ft be prepared n&tii a budget B»de %Meh vlXX glv© busts
for decision m& appropriation^ that the research dirtoior adopt as a polio/
rttassMmdlng that relevant eolleetloAs b# deposited (&i la the Library of
Congress* {h) in n regional uaiversitgr vlth ^fhleh the fa&il/ oone«ni«4
{
a iantttutlott as
for CoBteitt«# ftetlfltl*** the y©.»«&roii dlreotor i t to
• letter «dhrlftlatf peoplt vhe »iglit have papers useful for his tori eel
li^t th# CoiR»ittee i s iateresteds es £nnoufiee«:ent of the
tioa of the Ul&m invootorr by Dr* JClnc«iid la to go to interested
On ^ro^oae^ prpw> iatenriev^t the appropriation of 1500 to i»y the
cost of experiments ia group inttrriens wider th* leadership of Sr» Valter
Oa the n«ffiliM of an historian, tb« cossipijUtion of » 11 et of aiise possible candidate*, froa suggestions &«de by GQiemlttee iMBB^rs ^ihich vere
then vinnoved by ®^b«r® of the £3Beeatl.Ye
thea preeented the l i s t of
Cowsittte preferenee* I t i s eppended
career *5«t* on eeeh candidate \m$ read} the
Fm.nk Fetter w#r# elisdaatedi discussion of the
sao cosiceasus appesred*
possible historians la order of
to these silautes* Blogrfefliie
n«>m«« of Hr* Itoverd Ellis sad &r
rsnsiAixi£. «®v#a \»§ seo,eralf but
Mr* Bprml ihm suggested thst^it might he jposslble to #ec^re the services of Br« Cyril Jm*** for the poet* ^aasiltiee spproval ^as is^«di&t« fend esthuslestle* Dr» JSJHW expressed hleself as «ager to re tuns to vritlng after
jmrB of edteinistrative work but aoi certain that he eould do 11 at this
If r*»8f?ibl«, he ^idd prof tr to imdertake the tank In e university
^
For this, the Institute of Mvooeed Studies^ tlie Voodvw Wilson
at Princeton, sna ^@ Uiilv^rotty of l^nna/ivaisl* nere a l l
Dr. Jtmva w i l l mmkm h%* decision mM cgmnmlc^t* vith the
vlthln %mn de/s. Details of stipend, r^w^reh *id, lnoud of ouerfttioo, and so
fortli sust be -wcirked out#
*r» Sprotil appointed Br» OfeHelas^ Br* St4»v^rt and Mr. Hcsod«iyi to act
with film as a Cosaelttee to' discuss the «stter Is detail nith Dr* 4m$*m vhen the
latter i s
sible
then passed to Tferi-c?tts facets of the history and the pos-
Mr. Klefler suf^eated thtt AlexKiider Loreday mlcht do a »®£or&ndaBi on
the flaanei&l *i«d #<sonomie r«eon«traction of Europe after Vorl$ ¥%r I end the
of the Strong-ttoTBan-SehaQht tri&ngle In relation to it»
Sr* Stewart* dmibtful of ftis Loveday's health* {suggested Hr* H«
Siepaami (of the Ba^k of Borlandj &® one uUo. <sottI4 vrtt« ^ H cad froa
l a this area, thia •*»* approved fcy Hr« t i e f l e r *
that Mr«> Carl Xverean (of ®Mm&fm}
em tashnis&I K&ttera in tht iatofnatioatl
VOVLLA
b# good
Mr. l t « f l t r mid that Hr« Br®/ E«8»d»d i a <m* of th«
7 1.8t«r*8t9d in banking history, M?» H«s»o]id# ^ho has
$ book r^nuscrlpt oa th# history of the ^^con:] Weak of the United
tuts at d l f f t m t t ti».»a swiid ti« \«st«d t# wrlt» n iso^i.r«ph cm (
that X«NI up t^ ^ # F#d©r&l %&mr*Q Act aad (fe) the
Hiss Ad&ms r«.-orUd iafor.t.?.Uon th^t Hr« Htttf^,ottcf s
•abutted to the MAeaallXaa Ccmpsj^r, spfi&uied by then as & $ood Job> but
fti»#<5 oa th# gr^osid Vmt i t vould fittr&ot too m*XL $& &udleao« to be
i*r# Bur^«$^t5 eoi^eate^ tli&t Kr» Hsisaoiid's book thot^Xd b# p*tbXiah#d and
tiiat a gufesl^r @f 15*000 ml^ht be provided fe/ ^a# Merrill Fouadstion*
Dr» WiXXits a^eed Aether the plaanlag of ti0-i^gi!*|?hs vaft to be done fc
the hi?ft€>Ti«ia or the Oeasssltte*. ^r-* ftproul reepondtaA that both viould be active
in
sug^er-ted that i t Bsifht be v e i l to piC-- « fe%f p
htateriftnt as TBm&rofo assistants tad •bye*k 1km in* oa the project*
MJtmmed at 2i30« ^ # CocstKittee then
to t^i# ^Xd Room to resune i t s diseuis^ioa >4th the fere# consultants*
"• •
At the end of the discussion Dr» VSLXIits expressed hl$ feeliag that
1» attwtptiai to reesXl and rwspjpridse recent history* the te^dttee t«g i n i ti«tlng » process iisportiwit beyond th# eomp«s§ of the fiYe-*gr«ar ©ta^r no^r under
Appro¥«l of the conf9rimee-*vith'»consuXt6nts aethod i « s geMral f &w$ hope
e3^rease<l that farther seetiafg of fee kind. vevl<dl be 8Chedul*d, Kr
the Cs^saitte*1® grfetitud* to the eottuXteats* •
meeting vas adjourned et
(Acting Secretary/
omanm on IHE ustoia or ms n&mu& wmim mmwi
ECONOMIST HIS
in or^tr of rating ecoordtd th<n b^ comrotiite ehoiet
Lester ? # Chandler
¥• Lintatr
Paul V. HcCracken
Homrd S,
Mils
Eerl J, He«ilton
£* A* J. Johnson
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
Februaiy 23. 1955
SO* Messrs* Alias Sproul, Chaix««a ^° c ^ ' ^
¥* Randolph Bux$ess - c^» c ^ ^ y *
Sobert D. Galklss ~ ^ -" F* C*rril James
N^s <^i 4
MeC. Martin, Js*
V, Stewrt - ^- ^ ^ 'x^'24
Vinfield V, Bleflep
Bopp
The tr&n&cript of tii# aeoom Prinoeton conference, held
29th, Is enclosed.
I t has been reed b/ Dr. K&rl Bopp and two members of
the Comirlttee1 s et&ff aM edited to correct certain obvious errors of ;/•_-.'•
trenscription, Ve have thought you would prefer to have us leave untouched the conversational shape of sentences except *here etenpigrp* difficulties throw meaning Into doubt*
*T
Tou v i l l s t i l l find evidence of moment© vhen the transcriber vac
confused either by simultaneous phrases from two people or by a thought :
only half expressed* We hope that participants vho find themselres saying
things they did not mean to asy v i l l send us whatever corrections they
would Ilk© to have MB.&Q in the staster copy* Ve ^111 then eirculat© aa " '•
errata sheet to be Inserted In the transcript*
Mildred MAmm
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
13 USIAESS MEETIMi
AttEflDA
Princeton Inn
January 29* 1955
1:30 P.m. Committee Meeting Convenes in 2nd Floor Sitting Room,
Mr. Sproul, Chairman
Minutes of last meeting (distributed 12/2/54 by mailj
Report of Executive Committee actions, December 28, 1954
1. Policy decisions on collections of papers discovered
a. Overall budget to be framed
b. Deposit to be recommended in Library of Congress,
regional university or Columbia
c. Appropriation of $500 for experimental group
interviews to be led by Dr. btewart
2. Compilation of rated list of possible historians as
suggested by Committee members and winnowed by
Executive Committee (list appended^
Discussion and decision on historian
2:30 P.m. Meeting Adjourns
2:A0 P.m. Resumption of Meeting with Consultants
COMMITTEE O N THE HISTORY OF THE FEDERAL RESERVE SYSTEM
POSSIBLE ECONOMIST HISTORIANS
in order of rating accorded them by composite choice
Lester V. Chandler
John V. Lintner
Raymond J. Saulnier
Paul W. McCracken
Hovard S. Ellis
Earl J. Hamilton
Nell Jacoby
E. A. J. Johnson
Frank ¥. Fetter
SOME ASPECTS AND PURPOSES OF THE
COMPREHENSIVE HISTORY OF THE FEDERAL RESERVE SYSTEM
General approach and purposes
A.
Some of the major objectives of the Comprehensive History
1.
To gather and preserve all relevant information about the Federal Reserve
System that could possibly bear on the evolution of the structure and
functioning of the System.
2.0 To present a comprehensive analysis from an evolutionary point of view,
tracing the development of ideas and showing the interrelationships of
social attitudes, social and economic events, pressure groups, and personalities on the structure and functioning of the System.,
3.
Some things to be given special attention^*"
a.
4.
B.
One of the central interests of the entire study should be the
methods and terms on which money has been made available to the
banking system and the economy as a whole« This would include,
of course, all major changes in the methods used, such as discounting and open market operations „ But it would also give
adequate attention to changes of policy represented by changes
in methods of administration even though there was no change in
the broad method of providing or extracting funds. This would
require adequate attention to the whole question of location of
control, the methods of administration, and the development of
ideas by those who make policy„
Things to be avoided
a.
This should not in any sense be considered an official history
and the writer should feel perfectly free to criticize, evaluate,
and interpret.
"bo
It should not be financial history in the narrow sense but should
be a social history, giving due emphasis to intellectual and political, as well as the narrower economic and financial, philosophies
and events.
Some of the specific topics and events that might be considered
1.
The backgrounds of the Federal Reserve System
a.
This should include a detailed analysis of all the conditions and
thinking that led to the movement, for financial reform and that
influenced the form of the legislation finally enacted. This
would include not only the legislative history and the conflicts
in the Government accompanying the consideration of the legislation but should also include a consideration of the existing
international monetary and financial relationships, the nature
and structure of our own economy, the conflicts over broad
economic policies, the structure and functioning of our "banking
system, the economic theories underlying the various proposals,
and the personalities that were involved in the whole movement.
b.
2.
Period of organization and growth - November 1914 to April 1917
a.
3.
4.
A similar study relating to the organization of the Federal
Reserve Districts, of the Federal Reserve Board, and of the
Federal Reserve Banks before the banks were actually opened
for business.
The whole process of determining the structure and organization
of the Federal Reserve Banks, the selection of personnel for the
Federal Reserve Banks, the division of control between the Federal
Reserve Board and the Federal Reserve Banks, the location of control within the Federal Reserve Banks, the process of arriving at
decisions as to the appropriate objectives of the Federal Reserve
Banks for the longer run and for the existing situation, and the
relationship between Federal Reserve operations and American
foreign policy. Worthy of special consideration are not only ':
longer term growth considerations, such as, building of the prestige of the System, but the desirability of making earnings in
order both to build prestige and to attract members.
War and inflation - 1917 to 1920
a.
A comprehensive analysis of the entire war financing program and
of ideas relating to it and the relationship of the Federal Reserve
to the whole process„ The effect of the prevailing economic theory
on the types of assistance given by the Federal Reserve to both
public and private financing.
b.
In addition, adequate attention should be paid to such things as
the effect of the war period on membership in the Federal Reserve
System, the prestige of the Federal Reserve System, the relationship between the Treasury and the Federal Reserve, the tendency
to concentrate power in the Federal Reserve Bank of New York, the
subordination of the Federal Reserve Board in dealing with monetary
problems, the growth of relations with foreign central banks and
governments, the impact of this experience on the earlier philosophy
of the Federal Reserve Act and of Federal Reserve policy, and contemporary ideas as to later developments.
The Federal Reserve and deflation - 1920 to 1921
Analysis of events during period and of Federal Reserve policies.
A satisfactory treatment would include not only actual Federal
Reserve actions but a close scrutiny of the changing role of
Treasury financing, of basic philosophy and theory of the public
at that time, and of the Federal Reserve officials. It would
also include a detailed analysis of the process of decisionmaking and of the theories and objectives, explicit or implicit,
of those who engage in the process.
5.
The search for appropriate peacetime organizations and policies 1921 to 1929
This period will have a number of themes and subthemes which
are sometimes woven together and sometimes not. Among the major
problems were the following:
a.
The struggle toward a basic philosophy of central banking: the
conflict between the old commercial loan theory which would have
prescribed a passive approach and the theory of positive control
which would often require actions directly in conflict with those
appropriate to the commercial loan theory.
b.
Changes in the methods of business financing and their impact upon
the character of commercial-bank earning assets and upon the volume
of brokers' loans. The need for secondary reserve assets as a
factor in the growth of loans from non-banking lenders to the
market.
c.
The role of gold in the System: the continued allegiance to the
international gold standard as an ultimate ideal, coupled with
actions that were, at least in the short run, in direct violation of the rules of the gold standard game but sometimes with
the intent to reestablish the gold standard internationally.
d.
The frequent conflict of more immediate guides or objectives:
the objective of reestablishing an international gold standard
and of promoting recovery abroad, the accommodation of commerce,
industry and agriculture at reasonable interest rates, a positive policy of stabilizing business conditions, price stabilization, the development of New York as an international financial
center, the control of speculation on the stock exchanges.
e.
The evolution of instruments of Federal Reserve policy: changes
in both the techniques and relative importance of instruments such
as the discount rate, moral suasion of various types, open market
operations, international stabilization credits, development of
the "factor analysis" of the money market - member bank reserves
and related items. This investigation will necessarily involve
the procedures for arriving at decisions and the location of
control.
f.
The process of decision-making and the location of control: this
analysis will highlight the fact that the original theory of the
Act - that there would be at least the possibility of separate
credit policies for the various regions - came under closer scrutiny and was accompanied by many conflicts between the principles
of centralized control and of regional autonomy. This involved
not only the division of decision-making and control between the
Federal Reserve Board and the regional Banks, but also the question
as to whether and to what extent a centralized control should be
exercised by the Federal Reserve Board or by centralized associations formed by the regional Banks. The weakening of the influence of the Federal Reserve Bank of New York and the increase of
the influence of the Federal Reserve Board following the death
of Strong.
4
6.
Federal Reserve actions in a period of deflation and breakdown 1929 to 1933
In analyzing this period the following important things should
be stressed and interrelated:
a.
The prevailing philosophy of the public at large, the Government,
and Federal Reserve officials as to the responsibility of the
central bank and of the Government in dealing with conditions in
such a periodu
b.
"Sound money" beliefs carried over from pre-1914 days that "currency manipulation" should not be used in an attempt to bring
about revival, overlooking the fact that a currency must necessarily be managed with respect to some criteria of stability when
it is no longer managed with respect to the gold reserve.
c.
Lack of grasp of America's place in the world financial structure.
Belief that the United States must adjust to world monetary conditions and could do little to determine them.
d.
The persistence of the belief that the United States could take
no positive action to halt deflation even after the international
gold standard had ceased to exist and most countries of the world
had adopted national currency policies. International developments
such as the cessation of foreign loans, international financial
panics, breakdown of gold standards, wide changes in exchange
rates, etc.
e.
Business cycle indoctrination which stressed the idea that the
forces of depression were fundamentally nonmonetary and that
monetary measures could play little part in bringing about
recovery.
f.
On the other hand, there was a latent tradition, sometimes
referred to as Bryanism, that monetary action was vital in
restoring prosperity. But the monetary procedure contemplated
was not primarily central banking procedure =>
g.
The tradition of business cycle theory that depression was healing
and beneficent and not degenerative and leading to crack-up. This
tradition regarded deliberate monetary expansion to shorten the
"recuperative" period as harmful.
h.
But with the deepening of the depression, the growing popularity
of the belief that there were inherent forces in a capitalistic
society making for stagnation and blocking the technical possibilities for much higher living standards. This point of view
looked toward fundamental changes in the rules in the economic
organization for the most part rather than monetary procedures.
i.
The decline in availability of bankable assets as the depression
deepened, indicating the vulnerability to contraction of a monetary system that issues money against debts. The vicious circle
of monetary contraction and the decline in the safety of debts
and the willingness to go into debt except by distress borrowers,
proneness of American banking structure to failure, role of restrictive legislation, such as the collateral requirements behind Federal
Reserve notes and restrictions of eligibility of paper for discount.
The resulting lack of responsiveness of the economy to central banking
measures for expansion.
j.
7.
The diminishing tolerance of the economy for severe liquidation.
Federal Reserve policy from the banking crisis of 1933 to our entry into
World War II - 1933 to 1941
The treatment of this period should trace the disillusion of the
public and the despair that existing thinking and institutions
could provide an adequate solution. It would combine a discussion
of actual Federal Reserve policies with a description and analysis
of the very important changes in the legislation relating to the
Federal Reserve System. It would try to trace out all the lines
of development that culminated in actual or proposed changes in
the basic law and in the actual structure and operation of the
System.
Early Recovery Period
a.
Belief that monetary measures must be mainly outside central
banking procedures. (Preparation for the issue of script an
extreme instance of blindness to central banking possibilities.)
Due partly to lack of understanding of central banking; partly
to the loss of prestige of the Federal Reserve during the crisis;
and to the historical traditions regarding money of leading groups
sponsoring monetary expansion. (For instance, looking back to
bimetallism and to greenbacks in the Thomas Amendment.) Establishment of new institutions and procedures, such as deposit
insurance, R.F.C., and so on.
b.
The loss of confidence in business leaders which came with the
collapse resulted in greater receptiveness to reform legislation.
The popular attitude that greed and dishonesty were in great part
responsible for the collapse emphasized the necessity of "driving
the money changers from the temples" and diverted attention from
the monetary aspects of the collapse.
c.
Closely related was the idea that the failure to curb speculation
by denying credit to speculators specifically was an important
cause of the collapse. This belief led not only to reform legislation, but to the search for selective monetary controls; and
it made central banking policy very sensitive to a rise of stock
prices down to the present day.
d.
The continued misunderstanding of the place of the United States
in the world financial structure was evidenced by some attempt
at competitive devaluation. The problem of providing dollars
was complicated by the protectionism of strong pressure groups.
Later Recovery Period
8.
a.
Abandonment by the Administration of monetary action as an important means of increasing general demand, and greater emphasis upon
fiscal policy, increase of farm income, and upon raising wages and
other labor income by nonmonetary means.
b.
Foreign totalitarian influences on methods of maintaining prosperity.
In such ideology central banks were mere agents through which governments exercised naked power. Liquidity as such was not viewed as an
important means of regulating money outlay. The central core of
their mechanism was power itself,
c.
Drop in interest rates to low level as the result of historical
accident rather than deliberate action. The drop in long-term
rates welcomed by the Federal Reserve. But the large excess reserves, which were mainly responsible for the drop, regarded as a
potential danger of inflation. This fear of inflation in the midst
of semidepression characterized the attitude of the Federal Reserve
until Pearl Harbor.
d.
The shift in influence over monetary policy toward the Treasury.
In part this was due to the new powers of the Treasury over reserves directly, but mainly it was due to the influence acquired
by the Administration during the crisis and to the loss of prestige by the Federal Reserve during the depression and crisis.
e.
The policy of maintaining "orderly markets" in government securities materialized during the restriction of 1937* Though this did
not imply pegging of rates, it marked a definite change from the
ideas of the twenties, when short rates were supposed to be varied
with respect to business conditions. After 1937 "the Federal Reserve
realized they would allow rates to drift within wide limits and
would intervene only to prevent sudden changes. The Federal Reserve
seemed by many to have become merely a check collection agency.
This policy of drift was partly the consequence of the unfortunate
events following the experiment in tightening in 1936-37*
f.
Pegging the Market: The policy of maintaining "orderly markets",
though not at all contemplating the pegging of rates, prepared the
way psychologically and developed a procedure for pegging. (The
market became accustomed to the Federal Reserve's interventions
for the purpose of affecting security prices as such.) The
Treasury had decided on pegging many months before Pearl Harbor.
The Federal Reserve did not object to the 2-l/2 per cent ceiling
on the long-term rate, but objected to the rigidity of the pattern.
The Federal Reserve Bank of New York would have preferred a higher
long-term rate, but did not advocate raising the ceiling in the
situation existing when the rate was pegged.
Federal Reserve policy during World War II - 1941 to 1945
a.
A thorough description and analysis of the role of the Federal
Reserve in World War II finance should stress the contrast with
World War I. The contrast should include differences in basic
philosophies as to the function of the Federal Reserve, differing
techniques of supplying necessary money, differing philosophies
as to the proper behavior of interest rates, differing reliances
on monetary policy, fiscal policy, and direct controls, and differing estimates as to the nature of the problems which would have
to be faced after the culmination of war.
9-
b.
Some important changes arising out of this period: the tremendous
increase in the national debt, the practice of pegging the price
of Government securities, the shift of policy-making to the
Treasury, the proof that a central bank can control interest
rates, changes in the law to facilitate Treasury financing.
c.
The Federal Reserve position was that credit expansion was inevitable during the War and that it was inflationary, but that raising
rates would do little to prevent the expansion.
The search for appropriate peacetime organizations and policies - 1945
to 1954
This should include a contrast between the search which grew out
of depression and the search which grew out of inflation. Very
important background materials for a consideration of this period
would include the continued fear of depression in the midst of
inflation, the general demand that all the powers of Government
be employed to prevent the recurrence of serious depression, the
emerging popularity of fiscal policy as an instrument of economic
stabilization, the widespread disillusionment as to the power of
monetary policy to deal with unemployment and inflation, the
greater tolerance of the public for direct controls as a means
of obtaining objectives and its equal willingness to see their
abolition at the earliest possible moment, a search for extension of powers to reconcile expanding money supply with control
of inflation, support of the securities market with control of
inflation, development of the concepts of rigidly controlled
markets, free markets, and flexibly controlled markets.
Karl R. Bopp
Lester V. Chandler
Elmer Wood
January 14, 1955
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
2I f 1955
y # Qrril
ViJULUst
V.
a,
Um tfoodmrd*
na«ftb«r that «uft*r th* 8s®#tiag of #\ia^«^» ibvtnlwr 2 i , 1954
22 to
. At t:^t tL&«, they
*ft«r fltut1/, vfc^ to b«
on J&iiu ry
tlit origlaKl s i s u*s *
of whkt ti?,« C^s^ltt## w*m& by e coa-i p*fi#n#tv* hi3tor/ of
Reserve %tt«a tiui an outline f#r i t s writing*
in |>r«0^t#d n# # rou^a uttecii t to
tbin iftt«a<}»d &@ n fialsi^d jproduGi, t^# eoawU-Uots night hmf
In
$mm
w&ctionjs, «#«ag to b« eonolusivn; into th* fom of
f
to be «3i|>lor«d» The/ do mot vieri to i©/os# tlktlr ld««s oa th«a ultlm
torlaa, but t-iey do f««l toat & b*?^ic .focus of t&# cr^-.r«h«a«iv« history
fee the <i#ir«io£meiit of 14«&@« WiUiln thmir X3&X%® of ti^f AH<5 ep*««, th«
they eoul do vfc^ to iiiu»tr^.t« v^.^.t t>i«y h*d l a adnd* Trio hi:* tori en a t
find th*it ld«&s betualijr d«v«49p#d v«ry differently fitm tli# v&jr in
outilnt ^s i>r»«M»itiMj i « <l#&tgQ*d ^ pr&irolt** aoi to
the C<ws^dtt«* will eo »ce#pt i t ,
Mildred
Director
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
7 # 1955
Misers* Allen %roul
¥• Bftadolpb
Bobert D« Cuikim*
*U11«* MoC. Mtrtia,
p
Donald 3. Woodward
This 1» to
Ux I t s
Caanitttc'a
for
Most of th* Qmmittm
their intentif>n to b*
sent,
Jta?wng«Mftte v i l i b« ilsiliur to thos« «t
Ing* Tht thr»« e^guitants v l l l @s*t f t t-h* Ian for a
aot only
f but
report of th#
vlXX
-lismiision
of
on tilt
report of
to
of m
prtferring to spund Fridngr aight
the ffl#«tl»g lit th# ln& &T* *tk«d to co»s^uttl©«t« with Miss
cost-:, incl\idiag' trt^sportA Lion, io4glaf ^um r»«iueat«d,
e t c . S i l l s «t t,1<* ?ri;jo<iton I en ,111 b« r«»d#red direct to
i fcnd a stikiess^mt of your tr&nap-ortf.tlon costs should go
li«r for the appropriate r^fuctU
9
Tour» until the
B«
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
10*
^^(P
^H^W^P^IW^Wfc'JJ^W *W ^Mpj^^^^W^l^
Th« four Huts at$>ro##iiilii£ th« choice of £x#outlr« Co««lVpo»«lUe vrtters of th* Haiarf art *JU l a . T
g «oa*«lii tw^itir-i^o mmw* of %4tt^j aim i^Mtlnwl few wr
six r»©#iY»d thr«« or ^or» 'Vdtftsi oaly
of iv«aty»tvo mmmu If
w©i tiurift or foor toU«» «ai * mmmi
lit
%
I ttfc* I t frwa ^ * t mm tmU at tai» V*«hiagton a c t i n g
to b* >:>-r*s*nt#d to th# full CossattU* ^dll be those on the
M i t t ^ «4U torin* biogy«sml« «iii «ar«*r data oa thwij i f
ftwttt— »M^rff nlglt ot>i#r iofonafiUott, «w will tsy to i « t it*
foxy
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
3*»t*ff v .
•V ^fflBf^PW^
^* w
W
l
^
SeiX
^^'^BBWB'iWk
™ w^
flwj^fl^^^^^^W^^
*.
^
^
f
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
tmm
*L RasdeXph Burges*
Robert $•
YilXUv HcC. Ifer-tin,
fb K« Willit®
&Xd b* V
The 6«wmitte« » e t ?»t lOtOO a.*« t « t h t C«r»nf«r#*j^« E#^a of the
, ta^s, £c?ifi«r (for Mr*
t
C«lfclf!« --T,« i l l ? Dr« Jogejis ^ i l i i t t , ^^wly *'levied, tefp»nr«i: for
| * r t pf ihe afternoon tsts&Mitm* H#ssr«. tmrl
The tMMititkf wfe* called to oonsidor the «omel«sl«as reiich®«l im th«
Saturday, Uov*fishi»r 50th, * t $hn C^sftaitt**1^ r«><|«i<»4t| in thmiv *gnm± miv% %&
o th« jofe of |HP«p^riau th# histargr (of
i
the re* o r t on the eo«'i->letion of the
l a i d fcef»re the aembere^ teit withoat a
Pi** Curl £op^, aa fe««d of the gr©«,: af edlvi»er» # ««d -&.ak«s4 feim to
the mjfesst*R«« #f the
Dr. Boppt *i^e»*iciiii? for the CJaw&tt®©* e three $^vi
for coaaitt«e dieeaeeios ^. t e n t a t i v e dmigv* of t^he ©ctirss project ^hich v
include (A) a cos;:r«li#sglv6 h i s t o r y In three or four velim«ftj (B) the
of source 8u».teri9il| inelu^iiog »» -«kfi»ot«t«d bibliography ft»S * t
voXisse sf seleoted »»i-uhXi9hei& •ttowmm%»» (C) s. history for the
readerf fcfid (£) s s e r i e s of sosogrs-ihs vhieh vcwld conetitute resee.roh in
depth Isstc eertaim Kipeote of th« hietory wfcieh could not be e u f f i e i e s t l y
^ ifi- the co3»r:rehefn*ive
Qn the b^sls of th«t reoonaiez^i$tion# Br» &opp then c i
Rfetive «ppro@6he0 to the eonpreheneive h i s t o r y ( i f topical^ how
i f ehronoio|:ie«X» whieh tlam i#rioci,at)i the d«sir«^ extis^t of
the quettios of orgtmlzfttloi) - ^iven the tsa*» of *»teri*l
coul<£ the ecnsprehen&iYe hietory t# written ty o«# ?«r*on
with a s s i s t a n t * t or w&» the &oeu&*ut%tiaa *a extensive (end i n %h& a&
) th«-t 8«v^ra..t writers wouldfc©n
The pretMUit&tioo •*?&&
during vhieii thefotw&l
s wire
&r*d followed by extensive
tr*cd# in I t s
t
in
an
(i)
to doais:
h^i* pretty of
1? the T
this
(3)
t o be &«»<3
h i s t o r y i s tfefr
of tfca
of
th*t
Into tw© g
o-f ^
the other t o e
so on;
vlll
(4)
tli&tj of the two ways t o "aqueese *#h#t i s r«1ev?^att> out
of feiBtoricol dfttfe^ th« CosBKltteo y-r©fO*ea to ua« fe^yi •
arprsocb ^e«re4 ci;r«sf»lly t© time, %psi
h vhleh et&a&jade *xpiftr*tlots of to|;lc *aft
through
(5)
t h a t i f 1^« etiolco bad t o -bo si*4e !;>#tw®©» «.n eeooo»ist
uaf««ili*r vith h i ^ t o r i o a l is^feodi ®r sm historian us*
le«ijmo<t iB: ^coaoralc aod ssoaeit*ry »ff«ir»> the die wtmld
fciy be c»«t for the f i r s t }
(6)
in
itart tho &iM bo to oo»plete the
Hi® 5 3f««r p#ri«cl for wfeich functa ^re proiriitd, but ^
a f a i r prosp^et th%t f^rt^«r heir-' *»6 -t longer
cn be
*i
to gui£« the tixr©e
in the »ext
ype o|H&r«.tor ft
of t h e i r tr-»k.
roblf« «f ««®itif men to writing gjoats i n the
tb« &w»etifciv» Coaaittu* h*.d »» o^portuniijr to
Levin Cklaeti«r« «^nd sfooclief tfe«mis es & t«a« t ?&& &r. %-%vl Hamilton its &
of finiuBM»«« I t
ttummt periodical u r l t l n g * *?»d on th*t sm^is* mn& i a J M ^
ft#r d^citiBg t h a t -'* sMKionii eoof»re&e» with th« three ®
for ifeiurday, J^cu-^ry St^s (th* « x ^ r U i t a
(Remarks at close of morning session, Sunday, November 21, 1954)
DR. WOOD: I am slightly hazy as to just how the thing has
crystallized.
DR. SPROUL: I'll try to summarize it, and everyone else may
have a somewhat different view.
It seems to me that so far as it has crystallized, it has
crystallized first around the idea that Dr. James and Win Riefler have
suggested, that there would be one man full-time who would be working on
the comprehensive history with assistants, research people, #orking for
him, and with another group of part-time, one or two-year men, who would
be working on various mongraphs and associated with him in the whole
general project. That so far as the outline here is concerned, instead
of having C, a history for the general reader, and D, mongraphs, we would
^r
have two groups, however we list them, one of which would be in the broad
stream of the comprehensive history that has been mentioned here:
economic study, constitutional study, international study, personality
study, and a general study, which would include the climate, the pressures
which have been mentioned; and then there would be, second, the subsidiary,
the peripheral monggraphs on these other aspects of Federal Reserve operation and relations with the Treasury and with the banking system which have
been listed, in addition to others that might be suggested.
Going down to 4, that,so far as we have gone, suggests a single
writer for the work on the comprehensive history and several writers for both
the broad stream books and the tributary stream monographs.
DR. BOPP: And that on the monographs, several —
particularly those dealing with the broad stream —
probably
would involve the full
-
time of a person for a year or two*
2
-
Others, technical monographs, could
be done part time*
MR. RIEFLER: Could we put it this way, that there are two
ways of trying to squeeze what is relevant out of historical data. One is
a very careful approach geared primarily to time, the chronological approach,
The other is the problem approach, which tries to take a problem from a
topic and explore it. And we plan to use both on a equal basis.
DR. JAMES: There is the other point, that if the monographs
are well done within the first two or three years, they are going to
be invaluable to whomever is writing the comprehensive history, because he
will know where he wants to ask questions and what original documents he
wants to examine.
COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM
Conference with Three Experts
Princeton Inn
Sunday, November 21, 1954Agenda
10:00 a.nu
Meeting convenes, Mr. Sproul, Chairman
Progress report (at hand - needs mention only)
Report on Kincaid project (at hand - needs mention only)
Introduction of Dr. Bopp and his two colleagues
Meeting to be turned over to Dr. Bopp as Chairman pro tern.
12:15 p.m.
^^
Adjourn for lunch
2:00 p.m.
Reconvene for afternoon session
4.:30 p.m.
Summary statement from the Committee Chairman
Choice of date for 2nd conference some six weeks hence Saturday, January 8th, and Monday, January 10th, for working group?
Sunday, January 9th, for Committee and group?
5:00 p.m.
Adjournment
Q
Outline fonmXft.tftd fcy Bra* Bopp, Chandler and ¥ood in
meeting <;t Princeton, Noire&ber 20, 1954 fend presented ea the
basis for Goiaadttee discussion on liovember 2X»t (see p&ge 6
of t e x t ) .
A« Coiupreh€«8lv« histoxy
B« Souro« material
i , imsotatad blbilogr&piqr
2* i©i#ot@d uupubiished
G» Hltttoiy for tae
i t B&nk Supervision
2* CTaack Ciesriag end Collection
3* Fiscal
4*
5« CJonetltution&l History
6# F«raonn«l
7» Bole in Inter;ii.tiontl Fin&uce
S» Banjsmin Strong Biography
9.
II.
Otbtr?
Ai,TI«HATnE lFPIK)ACaE$ OF T?f£ CQKP8KHEISXVE HI0TOHI
A*
B,
III.
topical
How int®gr%t#?
Caronological
periods?
C0VEME
1, Vhat aspects ahould be coverad In «11 periods?
B« Vh&t aspects ©re H a l t e d es to
•
ALHMUTXV8 OHCUHIXATIOMS 10ft OONPftSanfStVC HXSfOKt
A» Single writer
B# Sevarel vritara
* hov aehivra integr»tion # continuity,
and eonslstencj of
October f t , If54
Eobcrt i''. Calking
?• Cyril JtaMtB
Villiam H«C. H»rUi5, Jr.
ValUr V.
la oar r»c#at vir« lulling you that- Sunday, Wwmtom 21st 9
provwi to be th« aoat g«a#t*lly possible dnt« for th« n*atin$ with
Pr* Bopp ftc4 his confr©r«& Dr. Qmsdlftr trut Dr» Vood, v« promised
that details vould folio*. This Is the
- 10 A.X, to 5 F»X* incluaiag ltsscheoc.
- ]*rltte#tos Xsa9 Princ«toaf Mm Jersey. (
preferrtrg to arrive C&turtiay night «n4/or stay through Soauay
night are invited to do so at Coaaitt«e expeam. A aisall imab^r of
with bath has b«c» r»»«rr«^ and will b« h^ldi for us until
13thj if you would l i t e oa« of %h®m, or any otj»r tjrpt of
, Mies M&ms v i l i b« glad to tak* cara of i t on wora
froa you.)
of
to attend and will tcic# part in th* eonfamoca vitfe
- Tit® st##tiBg lt*#lf will b«
roora at tb« Irm. Dr. Bopp «xp#ct« to ^ve for
Co»Bitt©e sesbsrs a rough r o s m of points which aroaa in tfee 3-oan
diw^aftion th« day b«for« - thi« to servo s.« a springboard for question s, ?snav*r»,
opioione. Because bo la T»ry ««g«r that ao bit of
th« Gowiitt**1 a coanial shall b# lost, h# Ims askad us to have a
tm bend to record tb« «ieeustioft. fhi» ttehntqtM
j
th« t«king of not«a with tb« &ooo*p*nylng dangers of
the sttaotyp* record i s solely for the guidance of Dr. flopp «&d Ills
group and it* use will b# limited to that purpose. It ahould not
discussloa In th« illght«at.
Cost» - B«ll»ving thit eonf«r«ne« to b« a vit*l at#p ia our
plant, th# romaitt*« v l l l charg* lt»©lf vitb all coet», Including
pGrt&tion, lodging vheti re<3u©st«d, a*alfi, «to. Bill* at th« Princeton
will !&• r^id«rt4 dir«<st to Mlas Ad&m«. If yow will baud Ml«3 Adas
of your transportation coats, she will »86 that th«y *r«
to you.
vith hl& lmp*» f«r tlwi 21«tt
Donald B.
Ostobor
Allan
Babart D. Calkins
?• Cyril Jaaas
V l l l i u i MoC. Martin, Jr.
Walter 1 . Stew**
B, ¥o<Kh#&r*l
(tontlaattit
Ton will fe# fl«d to t**r that Dr. f a r ! ttpp imports
In getting Prof*a»or» L*#t«r Cfcaadltr «*& Wlmmr Vood to Jola biw In a
m&n* %o giv» cl«»r«r dafinitios to th« job of preparlnj ^ * history
H# aov &«•<!§ to caow vbat ^#t# would b® eoav«rsl«nt for the f a l l
to MMit with htm and his collo%i5u*6 for a
©f thi» witt Important stattar*
plan of vorJc whloh was «k#tcb*d In * conf«renca vlth
Bopp lnclad«s tvo w«#k-«nd c<snf«r«?5O«st to be held u w>ntb or nix
apart* ?»r th# f i r s t of thas# y DT# Bopp sagg#«t« a thra#»dmy »««tiBC at
?rtn©#l®c> (probably i s tfe« Frlae#toji I«a) of vfeleb th« f i r s t &«y ¥oa!4 b#
to p r t l i a l n a r j dlacmstiami vittda hi* thrMMwn gtxinpp tho ®«eond
inrit« a l l Com-^itte« siaiibara for a general -iiecaasioa and alrlmg of
a l l idama, th« third vould &g*ln b« a working saaalor. of the three-^«a group
or, tba pr*f©r«iice of Cosmitta* awmbwri, Dr» Bopp
suggest wMftisf «lUi«r $*txur&xy9 $WL4»$ «ad Jtoc4*y, or £tmd*y»
Ta«»aay» Of the»v daye, only th« -ilddla 00* would c^ocoj-n tha
t>:e f i r s t ^eclaior. I s vhether tmmi ttaa wwb#r» vould pro for to
davata a Swi4»7 or a Kond»y to t h i s rlta.1 as«*tirf. The »»oond decision
m a i i d i a tfce da to; the v««k-^r.rfg stt|^aata4 &r* the *#oond or the third
l a Xowttber (13th, U%h, 15th, H t h or
)
r\irth«r I t a l i a of th#ta maatlstg* will \m «l«anMl later*
a»d th* date an» tha firat t&l&is ta bo o«cld»d. May n» koev four
on both of tfcata?
tba
The tiise i* m short tbmt 1 §s asking « j aaaistsnt, Mrs.
to pfeoaa jrour aacrotary OB Itoday asornlng la ord»r to got yemr eb©le#s la
thi»
©•«•
fary
• Br* Earl
Minutes of the Meeting of the
Cosaalttes on the History of the federal fie serve System
the nutting opened at 1 P.M. in a private dining roo* at th#
Brooking© Institution under the ohaim&nship of Hr, Allan SprouX* Members
praeeat were Messrs* Sprowl, Burgess, C&lkinsf Riefler representing Mr*
M&rtin, Stewart and Voodv*rtf. Absent, Mr* Martin* Miss Adams, research
director, siso attended,
Mr. CsXfclns reported that the Kockefeller foundation h*d extended
until Septeaber ^)th the time period during which the $ 10,000 fund ullovsd
for the pilot project could b® ns#d. Srooldngs thereupon extended the joint
appointment of Hist Adams to their stuff to the end of June; subsequent plans
will b© ns&cle by thea bttform thet date arrive®,
At th# Ch«ina&nf s request, the Secretary presented an agenda con*
tulninf four iteias. Th^se in the order presented9 and vith the fection taken
on thew, follovi
X* "Clarifying the relatloa^hjp whioh is to exist between Brooklogs snd the
Connittee*
Coaiaitt#e decision is tsked cm bttis of s aetao clrcuXated to ®#!nb#rt by
Dr. Robert Cslkins. Choices presented &rei
(a) Plan I - Coemittee to assume direct responsiteilltj for project
nn$ expenditure of gr»ntf vith Brooking* sotlng only a* fiscal
agent*
(b) Plan II * Coms<tee and Brooklngs to assume joint responsibility
for project mnd expenditures*
(c) Plan III - Brooking? to assume responsibility for project and
thefccfe&ioistratiosof funds Is agreement vith the Committeej
latter taking on advisory capacity only**
After « statement of the Covalttee1* vish that Brookings continue
in the clo$e relationship v M o h prevailed under the pilot study and vas assu*t*d in the proposal for » further grant, discussion followed on the degree
of responsibility which th® Goasaittee should, could and/or voiald like
to assart*. The process by which Brooking® ettstoaarlly supervises and
approves n&nuacripts was explained, m& SO also was th© analogous procedure of th© CID. It wtss assumed th&t the Committee would face similar
problems, partlettlarly In r»g*r^ to the history sad to the vork of scholars
accepting subventions*
The discussion of various possible degrees of Coatslttee respons i b i l i t y revelled « ir«aad of thiafclng In favor of a ranrtaed Coissdttoe orh«r*lqr tfe# «r*tif« OoJ»®itt«« (with »OB» additio&a at
point 3) votild «ot isostly la &n adiriaory capacity and <m policy
whilo s aa&llar segment would bo deolga&tdd at lh« Executive Coassltte©*
It m>& decided th*t given Him degree of responsibility m§wm& by
the Cotamitts* vbeii i t asked the Hoekefslier FouBdatlon for th® psjor grftot,
Plan IX with fo»# modifications best sets forth the Comittee1® desired relationship vdth the Brooking® Institution lo th# bAndlisg of thut grant.
It was
suggested that sodifle&tlons In detail be in the direction of flexibility, &d
hoc d^eisiojas on indivldml projeets t a elesrer drsving of lines of responsibility as between Brook.ings and th© Cosualtte© in the taakiag of contracts vith
authors &n& th® supervision of their fnilfillsent,
Mr, Moodw&rd, r©pr@©euting
the Comittee t va$ asked to work out with Mr. Calkins for Brookiags further
details of Flan II and to elrealate a second draft for Cotaaittee approTsl*
2*
"fls-djag & laajoy. staff mm (or vosati) to act as sdnlrdstrstiir© assistant
to Hiss Ads3fttf and later ag project director• (Sxplaaetory aeisso had been
elrculatitd by the Secretary in adraxice of the meeting,)
Comaittee prefereRcs is- asked as to type to b* noughtj suggestions are
nestled as to naaes within those
(&} Retired expert vho v^uld like to bt drafted back*
(b) Active person of proven ability vho can be attracted from
bask or college by value of experience for future post.
(c) Young and promising parson with proper aeadsmio background
and a few ye&rs experience- in banking, teaching and journalism.•
After soae dismission as to whether the desired administrative astlfttaM should or should »ot be the person expected to writ® the definitive
history, i t v** agreed that It would be difficult to- find both skill* In one
person «n4 that vb*t was needed wet an aaciaUint who could b#eo&e project
•wseutiv* under Mr, Sur«|e#«, tb« <i#«ir#d stuff want th«© B«»#d a« to ineltid*
Hr« Burg««» (to be ev^ntuallsr in chnr^) f Mr, George Roberts (to writ* th#
history or in whatevdr cnpsoity b« cho&«), Hiss A4ns« (to oontinuo a@ i« for
perhaps a y«»r), as understudy of guoh c©liber that h« or ehe coultl, aft«r
training, #v®ntuslly tak« Misa Adtas1 place.
Hr. Buries wa» mpoverwi to
explore tb« «vailfiblllty of Mr. Hob«rta| Miss Ad«s» %m» «jpovr#d to explore
possible understudy choices, on the basis of suggestions a&d« by Committee
, and to report.
*A«8ttrlng
breadth of viewpoint on mssjor sabj«cti? of inqislry,
ta.ryfs memo on this point v«» circulated in advance ©f the
pr#fT«nce in asked oa two proposed wtthodts
(«)
(b)
(k
Asking Individual tt&teacsts OR pussllng problems.
Arranging an ad hoc conference ia October vith fifteen or
twenty persoas expert Jus banking, history and politic&l
science. Suggestions are asked as to time, plsc*, con*
sultanta to be
the Coasiitt#e approved the desire for breadth of rievpoint,
shoved no interest in either (a) or (b) &s presented in the Secretary1*
aemo. They vere fegre^d that the Coamdttee vould benefit by « widened
rai^e of interests vhleh went outside Fetiernl Reserve experience^ ®n&
that the addition of perhaps three meabera chosen preferably from assong
historians nnd ©eofiomlsts would b« d«»lr«ble.
Cr. John Villiams, )Dr. Jacob
finer, Hrm Cyril James, Mr. Villlaa Myers were suggested.
It -wms aecjded
that a l i s t of individuals proposed be circularised so as to determine
Ccamittee preferences.
4*
*r^tflble projects - Dr, Sinicald and Lester Chsadl#r.
(Set? Secretary 1 •
f royfoiotial :ife^firovnl i s eskfed on UM» following*
(ft)
(b)
Proposal of I>r. Elbert fink&id to spend the summer
and indexing th@ Carter Glass papers vith the aid of m gr»4u»t«
student vhom he « i l l treiisj a«me of »tttdMit and proposed eo*t
to follow.
Proposal of fhr* L««t#r Oi«ni41®r to #ab&rk in February 1955 o»
a study of *8«o Strong, C«ntrml Banker*. Tim® Mid cost budgets
to follow.*
Provisional appror&l was given both the Rinkald amd the Chandler
project, but igor® facts would bm needed b#for© formal oojaait»eat co«ld be
OR «it,her»
The Sinkaic project Is seen as a summer's work of arrange-
and Inventory by n graduate utudent tinder the auparviaion mnd vith the
sdvice of Dr. Klnkald* The Chaadler project was explained n.a iaoludlng a
possible subvention of $12fCK)O to |15»CK)O plu# typing eoftta a»d publiaM?*g
nld| i t veuXd begin iis February 1955 ^»«i continue for at le&®t a ?®&v* Or-inion v^.j; general that thie l a t t e r project should take the fora of a aajor study*
tfee Eeie^rdh Director wag spked to get &ore detail on both projects for Coa~
mitten consideration after ?4ay 20th*
Tfeei^e being BO further business the ?seetiag waa adjourned at
P.H.
Voodvurd
Secretary
C
COMMITTEE O N THE HISTORY OF THE FEDERAL RESERVE SYSTEM
Notes of a Committee Meeting in Washington
gpril 7, 195JL
The meeting was convened in the office of Mr. Burgess at the Treasury
and chaired by him.
Those present in addition to Mr. Burgess were Dr. Calkins,
Mr. Riefler appearing for Mr. Martin, Dr. Stewart, Mr. Woodward. Miss Mildred
Adams also attended in her capacity as Research Director. Mr. Sproul was unable
to attend.
The meeting was called primarily to consider and comment upon a draft
of the Report of the Pilot Project, and Proposal for the larger history project,
which are to be presented to the Rockefeller Foundation on April 18th. Hitherto,
reports on what was happening under the pilot project have gone to the Committee
in the form of progress reports. Almost three months have elapsed since the
office first opened, and a great deal of work has been done, but this is the
first time that all the men on the Coirardttee have met together. Previously,
smaller groups met on specific topics of discussion.
Mr. Woodward presented the draft Report end Proposal. He described
the proposed study as that of an institution which men invented and men operate,
but which, like all man-made institutions of stature, takes on values and imperatives of its own. The study therefore becomes in part a probing into those
values and imperatives and the policies they dictate.
The following important points were made:
First, some doubt was expressed that Mr. Sproul and Mr. Martin would
want to stay on the Committee in the history writing stage, if they found themselves put in the position of having at the same time to rule on the use of
hitherto confidential material.
Second, when Mr. Martin accepted membership on the Committee, a condition of his participation was the acceptance of a cut-off date of 1935> after
Committee Meeting
4/7/54
- 2 -
-which no history would be written. If the Committee does not accept this cut-off
date, he (or Mr, Riefler for him) must go back to the Board to ask further consideration of their decision in this matter.
Third, it was stated that the Brookings Institution would present the
proposal to the Rockefeller Foundation in its name, rather than have it go in as
a Committee proposal. The reasoning was that Mr. Sproul and Mr. Martin could
not very well ask for Rockefeller money to study the System. They had not come
on the Committee until after the pilot grant had been made, and it was assumed
that, by the same token, they would prefer not to be making the request for the
main grant. It was stated that Committee participation in the longer project
would be similar to the way things had gone in the pilot project.
Fourth, after lengthy discussion of the draft report and proposal,
an expression of general approval was given, with the understanding that notice
would be taken of comments and criticisms made in the course of the discussion,
Ko formal minutes of this meeting were kept by the Chairman, The
above record is taken from notes made by the Research Director and included in
the Minute Book as an important early statement of policy and opinion,
Mildred Adams
@FedFRASER