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Jammry 13* It Im* always bmn bsportant and 1* now otore important than ever thatftft&hFe&oraX Reserve Bank have an adequate ©oonomio depart^ 9*«nt hoaded by a full-tiis» economist* JDa general* the purpose of mm a departsaent i s threefold? to serve th# Board of Oovernors* tlie lank* and the publio• fo fit* Board of Governors in i t * work &*«&» to fe*v» m ^ of •Qoaoalo d©reiop«©ats in th«i viuriou* regions of the oountr/, w#ll *s ic tho aatloxi *« A whol©. It i s difficult for peraone for th» develoiKsadiat «a4 tr*n»i«i*s*io» of «uoh iuTorafttios to th« Bourd. •This r«fuir«« tb« miitt«gt«m« of ro«#&n^ dopftrtwentu with *t«£f# to dflToloo u&& jaftintftia th« infojnMtloii, 1B r#o«Jit J M M th through tho ooncSuot of m*saorou» spot aonro^i, to $r«*«&t on «hort iafonaatioia oovorius region* throughout tho ©oimtr^. th» oo^l«t#* of *u©h «urv*y« ha»« honr^or, booR liait«4 in «oa» distriots by tho f«u?t tJmt th« WMwarisfa 4#p»rts»at» of #os» -of th« B*»it« woro not ftdoqu&toly «qui^jp©4 to supply tho asoMtsiur^ iaforaatioa «^ni»8t % baokgrouttd of ooat i i t t with l#«4«r* in 4i*triot «Bt«rpr!**s• to Bmrtt the fh» roaomroii 4op«r1»»ttt of «aoh Hoservo Simk mitt k©#p Bank offioiale iaforntd «# to ©oouomia d«v«Xop»«at* both withia th® <ii»triat and smtioimlly. E*oh B*ak tisould Atnumo & position of I«*d«r«hlp in it* end to do this th* of floors should leoup in olo*# touoh with and fimwooial derolo^aonts in la^ortftrat rogion* In thoir dilttrlot. fh© S^st«»v« wsrk «4d that of o*oh d*Ak I* mmh broiulor than tho puroly ttftohosioml fu^otioxs* of bank oforfttiom^ fl*o*l Rgoaoy, «ad tho like. Im the dovolopmout of sM>a«rUry m& oro^it polioy* oojatidorfittiaa wi*t bo to th« i«fort«nt probloa* that *ri** 1B ooanootion with Indus try* sad fiimnoo, wd o&ofe Sank s%t«t hmim it* affioors infor»*d on i f th«y *ro to t»k» •» aotiiro part in doaisiom* th*t aro within & $ivm r«£lon* B*ak' official* a»mt Imvo not only tiio imawlodgo gained from oontaot with b*®&tif$« btaiiJS«*»attKi, mad ^thor« in tho locality but al«o timt provi«lo4 by tho ro*#«roh d«p*Tta*-at ia It* ooatiauon* aad appraisal of oooaomio oonditiims throughout tho district. offieials oust «l*o b« kopt fully inforaed o» rational &« «• looal devclopssenta «o t!wnt# *he& o»#ting with tho Board of 3oror»or* or with tho f*«dor*l Qpm Markot Co»aittoo to consider Systssi polioy* oaoh aay ooatrlbut© fully to th# diious*loe. and s#o that ?robl«jaa ia^artaiit to hi* district are viewed in their proper perspective and ar« given full oonsidor * 2m To sorvo the public If the Sank* are to oocmpy ft position of leadership in their own eesysraitlee, they wast be reeogaiied MI authorities on affair a within thoir districts. This can beat be aocoagplished by building up a research departaa&nt which will know conditions IM i t s <iistri©t thoroughly and will be available for consultation with Federal, State, and local governmental agencies* private organisations* wid individual* mho are Interested In a knowledge of what is &oi»S oa in a cOMsamity. At preacnt th«r# ar« no other »uch agooolos to whioh on© nay go for information on local developnont«. the Federal &e«erv* Banks have already aad* aoau» plaoe for the»•elvea l a this reepeot and Have been of real seryioe to the publle# but the work ahould be expanded further* the pr&ftent program for regional coononio ettidlee ehould do miob in this direction i f the Banks develop their staffs sufficiently to do the work and i f the result* «o far as possible are mde available to the public and the public i s inforaaed of this fast. EEUTI05 OF guivKl; or (Xi7WSmu& to W FEDERAL Frier t o 1956 the researoh department a were under the supervision of the chair awn and Federal leserve Agents« l a the l a t t e r half of that year the research departsaaiita were transferred t o the Banks as a jmrt of the transfer of the non-statutory duties of the Chainaen and Federal ftomwr** Agents to the operatiftf, ds^art»snts of the Banks. At the t i » e t h i s transfer was aade there was s e t forth, i s the l e t t e r s sent t o eaoh Sank authorising the shange, a s e t of principles to l»overa the operations of the research departments after their transfer from the Agent f s department t o the- Bank* Briefly these principles stated that the Board expected i t s Division of Koseareh and S t a t i s t i e s t o keep in olose touch with the a o t i v l t i e s of similar desartnenta at Beserve Banks and would expeot full cooperation i n the System*s work l a t h i s f i e l d . Hew projeote of an extensive nature proposed by a Bank should bo worked out in cooperation with the Board*s 01vision of Eesearoh sad S t a t i s t i c s , and fro« t$m t o tisae the Board would request the Banks to oooperat© on special studies of orlaary interest to the Board* the Board would continue the praetioe of reviewing a l l publications of the Federal Reserve panics dealing with amtters of more than losal interest and requiring approval of the Board before they are issued. The budgets of the research departaent* oontlmaed t o be subject t o advanoe approval of the Board and a l l appointments of persons to supervisory positions in the departments regained subject t o Soard approval. thu« th« Board retained «up*rvi«ory oootrol cnrtr the roewuroh iid oould, At i t s di»or«tioii» withdraw th«sa from the Bimic«. In th« ©vejst that & f»d«ral l«a«rv* B*nk « M unwilllag to est&blieh an rftse&rch dep^rtsrsoast or to allow I t *uff ioient fu«d§ t e oftrry out 4«»sied <*«se»tiaX b^ the io*r4, th« d#pfijrtia©Et oould at Any p\it under the Chfdrwms «fco is the Xonal ropr»*eatntive of the- Board
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