Full text of Marriner S. Eccles Papers : President's Address on the Occasion of the Official Opening of the Federal Reserve Building, Box 2, Folder 20, Item 4

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Z-55
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

Following is the text of the President's address on the occasion of the official
opening of the Federal Reserve Building on October 20, 19S7:

MR. CHAIRMAN, LADIES AND GENTLEMEN:
You have come here this afternoon for something more than a
mere formality. This structure is worthy to rank among the foremost of
the Capital's architectural achievements, and you and I have gathered
here to pay tribute to the beauty and dignity of lino and form wrought
by those who conceived and executed this building.
But we are conscious of a larger meaning in this brief ceremony — of the role that the Federal Reserve plays in the broad purpose
which this Government must serve. That purpose is to gain for all of
our people the greatest attainable measure of economic well-being, the
largest degree of economic security and stability.
To advance the country towards this goal is the real mission
of the Federal Reserve System. It cannot be attained by that System
alone, but neither can it be reached without the proper functioning of
our monetary and credit machinery. That machinery must be steadily perfected and coordinated with all other instruments of Government to promote the most productive utilization of our human and material resources.
Only in that way can we hope to achieve and maintain an enduring prosperity, free from the disastrous extremes of booms and depressions. Only
in that way can our economic system and our democratic institutions endure.
Nearly a quarter of a century has passed since the Federal Reserve System was established. Its creation, out of the nation1s banking
experience from the beginning of the Republic, was duo to the statesmanship of President Wilson, and to the courageous leadership in the Congress
for which the Senior Senator from Virginia, Carter Glass, ?/iIl always deserve the Nation's gratitude.
It is fitting that President Wilson's portrait in bronze should
have the place of honor in the main entrance to this building. And it is
appropriate that the words inscribed under it should be taken from his
first inaugural address. Let me quote them:
"We shall deal with our economic system as it is and as
it may be modified, not as it might be if we had a clean sheet
of paper to write uponj and step by step we shall make it what
it should be."




Those penetrating words admirably apply to our banking system,
which must be constantly alert to changing conditions in order that it
may be prepared to adapt itself to the growing and changing needs of our
people in their daily life and work.
The Federal Reserve System, as it was originally established,
was adapted to the pre-war world and brought about a great improvement
in the money system. Steps were taken in 1917 to adapt it to the urgent
necessities of a ?/ar-ridden world. In mobilizing the country's gold reserves and in facilitating the Government's vast financing operations,
the Reserve System performed a vital role in the winning of the war.
It is clear now, in retrospect, that if further changes to
meet post-war conditions load been made in our banking system in the
1920!s, it would have been in a far better position to moderate the
forces that brought about the great depression. But from the end of
the war until we were in the midst of economic collapse a decade later,
no changes were made in the banking structure to make it function more
effectively in the public interest.
Since that time the nation has done much to improve its banking system. It must continue step by step to make the banking system
what it should bo. We must not complacently suppose that we have achieved
perfection. We have provided for the insurance of deposits for the benefit of the great mass of small depositors. By the Banking and Security
Exchange Acts of 1935, 1954 and 1955, the Federal Reserve System was
given increased power to improve banking conditions and to aid the Government in combatting practices which were evil in their results. Those
powers have been concentrated to a greater degree than before in a single
public body, so that they can be used promptly and effectively in accordance with the changing needs of the country. 19S7 is not 1915; nor do
we want to turn the hands of the clock back.
The Federal Reserve System, tested by nearly a quarter of a
century of operation, is a public institution capable of adaptation to
future, as it has been to past needs and conditions. It is a piece of
machinery vital to the Nation1s steady progress towards the goal of a
sounder banking system capable of contributing its full share to lasting economic progress and well-being.
The Board of Governors, v^hose building we are dedicating today,
was reconstituted by the Banking Act of 1955. To this public body Congress has entrusted broad powers which enable it to affect the volume and
the cost of money, thus exerting a powerful influence upon the expansion
and contraction in the flow of money tnrough the channels of agriculture,
trade and industry. In this way much can be done towards the maintenance
of more stable employment. Much can be done to aid in acJiieving greater
stability of the true value of the dollar.