Full text of Paul A. Volcker Papers : General Accounting Office, Box 28, Item c199

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Federal Reserve Bank of St. Louis

Collection: Paul A. Volcker Papers
Call Number: MC279

Box 28

Preferred Citation: General Accounting Office, 1981-1985; Paul A. Volcker Papers, Box 28; Public
Policy Papers, Department of Rare Books and Special Collections, Princeton University Library
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Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS
• • •.
,
.• of GOveoi..
0
.• .4..

OF THE

•er,

FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
OFFICE OF STAFF DIRECTOR
FOR MANAGEMENT

May 14, 1985

U. S. General Accounting Office
General Services Administration Building
Room B-242
18th and F Streets, N. W.
Washington, D. C.
20405
Attention:

Mr. Hugh Pollon

Dear Sir:
In response to your May 6, 1985 letter to Chairman Volcker,
enclosed are Information Request Forms for officials that have
been provided home-to-work transportation. I have also attached
a copy of Chairman Volcker's letter of January 10, 1985, to
Senator Proxmire dealing with this subject.
If there are any additional questions, please contact
Robert E. Frazier at 452-3816.
Sincerely,

)-)
. David Frost
Enclosures

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Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON, ID. C. 20551

PAUL A. VOLCKER
CHAIRMAN

January 10, 1985

The Honorable William Proxmire
United States Senate
Washington, D.C. 20510
Dear Senator Proxmire:
I am pleased to respond to the questions posed in your
letter of January 2, 1985, concerning the use of motor vehicles
for transportation between home and places of employment.
In response to a similar inquiry, I wrote to you on
July 9, 1982 that although the requirements of section 1344 of
Title 31 of the U.S. Code do not, as a technical matter, apply
to the Board, our policy on this matter only allows for my use
of a motor vehicle as Chairman and for use by other Board
Members in limited and exceptional circumstances in connection
with official travel, and late night work or official
functions. Specifically, I stated that, "Under Board policy,
the six passenger motor vehicles operated by the Board to meet
its official transportation needs may not be used for
transportation of Board members or other Board employees
between their residence and their place of employment unless
security requirements or exigent circumstances make such
transportation essential." A copy of my letter is enclosed.
To help insure continued limited use of motor vehicles
in accordance with this policy, I have circulated a copy of
this correspondence to all Board Members, and asked the Board
Member responsible for administration personally to review our
policy with the Board.
I hope this satisfactorily answers the questions you
have raised.
Sincerely,

de,a
Enclosure

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Federal Reserve Bank of St. Louis

A., 7,

July 9, 1982

The Honorable William Proxmire United States Senate
20510
Washington, D.C.
Dear Senator Proxmire:
I am pleased to respond to the questions posed in
your letter of June 28 concerning the use of vehicles for
official purposes.
gib

As you know, section 638a of Title 31 of the U.S.
Code applies to vehicles purchased with appropriated funds and;
while the statute does not technically apply to the Federal
Reserve, the Board policy on use of motor vehicles is consistent
with its provisions.
Under Board policy, the six passenger motor vehicles
operated by the Board to meet its official transportation needs
may not be used for transportation of Board members or other
Board employees between their residence and their place of
employment, unless security requirements or exigent circumstances make such transportation essential. In accordance
with this policy, these vehicles are available solely for
official business and none is assigned to the exclusive use
of any member of the Board or its staff.
For some time, transportation hiks usually been provided to and from my residence (which happens to be within
walking distance) in accordance with the provisions of the
policy concerning use of vehicles for security reasons. This
transportation arrangement is one of several security measures
that the Board put into place in response to threats directed '
towards me as Chairman of the Board. A security professional
now typically accompanies me on all trips.and all drivers have
received special motor vehicle training to deal with threatening
situations.
The annual cost of the specially trained drivers
used for security purposes is $32.157. Overtime costs average
an additional $5,000 per year. The drivers are, of course,
available for business transportation during the day. Depreciation of the vehicles used for this transportation is estimated
at about $125 per month and operating costs at about $145 per
month.
I hope this satisfactorily answers the questions
that you raised.

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Federal Reserve Bank of St. Louis

!Sincerely,

INFORMATION REOTIFST FORM

been provided home-to-work
Government officials that have
1q85 in government-owned or
transportation since January 1,
udina vehicles with or
government-leased vehicles incl
rate form for each official.
without a driver. Use a sepa
If none please so indicate.

NAME OF GOVERNMENT OFFICIAL:
Paul A. Volcker

NT OFFICIAL:
TITLE OR POSITION OF GOVERNME
Reserve System
Chairman, Board of Governors, Federal

HOME-TO-WORK
AUTHORITY OR JuSTIFICATION FOR
TRANSPORTATION:
See attached sheet

SPORTATION (select one):
FREOUENCY OF HOME-TO-WORK TRAN

Daily

times per week

times per month

Other (describe)

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

OWNED OR LEASED:
INDICATE WHETHER VEHICLE IS
Owned
1

d in part 1
ment official identifie
Relatives of the govern
ce January 1,
ed transportation, sin
that have been provid
ased vehicles,
wned or government-le
1985, in government-o
when not
h or without a driver,
including vehicles wit
none please so
ernment official. If
accompanied by the gov
indicate.

FD TRANSPORTATION:
NAME OF RELATIVF PROVID
Barbara Volcker

MFNT OFFICIAL:
RELATIONSHIP TO GOVFRN
Wife

FREOUENCY OR OCCASION:
e a month when she comes to
Seldom -- less often than onc
ch
in official social events at whi
Washington to participate
te.
spouse's attendance is appropria
TION:
AUTHORITY OR JUSTIFICA
To accompany Chairman

E IS OWNED OR LEASED:
INDICATE WHFTHFR VEHICL
Owned

explanation
statement of policy, or
,
ons
cti
tru
ins
n
Writte
nsportation
ning home-to-work tra
of authority concer
ntified in part 1
ment official ide
ern
gov
any
to
hed
furnis
so indicate.
above. If none please
Statement
See attached Management Policy
vide a copy):
DESCRIPTION (also pro

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

data
Individual who can be contacted concerning any of the
shown on this form.

NAME:
Robert E. Frazier

TITLE OR POSITION:
Director, Division of Support Services

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PHONE:
452-3816

•

AUTHORITY OR JUSTIFICATION FOR HOME-TO-WORK TRANSPORTATION:

Transportation has been provided to and from Chairman Volcker's
residence in accordance with Title 31, Section 638A, USC
concerning use of vehicles for security reasons. This
transportation arrangement is one of several security measures
that the Board put into place in response to threats directed
towards Chairman Volcker. A security professional accompanies
him on all trips and drivers have received special motor
vehicle training to deal with threatening situations.

https://fraser.stlouisfed.org
Federal
Reserve Bank of St. Louis
I

•

Attachment

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE
APPROVED BY

2/4/85

DATE OF REVISION

PASSENGER AND UTILITY VEHICLE POLICY
POLICY STATEMENT
The Board has elected to comply with the provisions of Title 31,
U.S. Code, concerning the operation of motor vehicles. Specifically,
31, U.S.C. states, that government vehicles may only be used for "official
purposes" and "official purposes" does not include home-to-work transportation.
Under Board policy the motor vehicles operated by the Board to
meet its official transportation needs may not be used for transportation
their
of Board Members or other Board employees between their residences and
ances
place of employment, unless security requirements or exigent circumst
make such transporation essential. The policy also provides that when it is
clearly in the best interests of the Board, transportation may be provided to
and from Board Members' homes in connection with official travel. Such
transportation may also be provided on rare occasions when Board Members
must work exceptionally late hours or attend official functions which extend
into the late evening.
GUIDELINES
PASSENGER VEHICLE OPERATIONS
Priority for the use of the Board's motor vehicles is given to
Board Members, Senior officials of the Board's staff and Senior officials
of Federal Reserve Banks.
The supervisor of the Motor Transport Unit is responsible for
the
all vehicle operations and requests for transportation should be made to
Garage.Board
Motor Transport Unit (ext. 3463 or 3464), located in the
Requests for transportation should be arranged as far in advance
as possible in order that trips may be consolidated to insure maximum use of
vehicles, as well as consideration for use of public transportation.
Requests should also specify the destination, return trip requests and any
other pertinent information. The Motor Transport Dispatcher should be
notified promptly of cancellations and delayed trips.
Chauffeurs' normal work days are staggered so that they are on duty
from 7:00 a.m. to 9:00 p.m.; whenever possible trips should be scheduled to be
completed during this period in order to avoid payment of overtime.
UTILITY VEHICLE OPERATIONS
Utility vehicles are used to support the Board's mail delivery and
service.
pick-up service; pick-up and delivery of general supplies and shuttle

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

2 4 85

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE
APPROVED BY
DATE OF REVISION

Mail Delivery and Pick-Up Service
1:15 p.m.
Deliveries are scheduled for 9:30 a.m., 11:15 a.m.,
accompanied
be
d
mail shoul
and 2:15 p.m. daily, Monday through Friday. All
the Board
to
and brought
by FR Form 477 (Request for Pick-Up and Delivery)
other
from
pick-up
Garage at least 15 minutes prior to delivery. Mail
for
3250)
3, ext.
agencies will be brought to the Board's Mail Room (G-23
further distribution.
Shuttle Service
Foggy Bottom
Foggy Bottom Metro Station - Morning trips from
South Garage, are en a
Metro Station to the 1-G Level, Martin Building
Afternoon trips from
turnaround basis starting at 7:00 a.m. to 9:30 a.m.
Foggy Bottom Metro Station
1-G Level, Martin Building South Garage, to the
at 6:00 p.m.
start at 4:00, 4:30, 5:00, 5:25, with the last trip
ng the Motor
Airport and Hotels - Trips can be arranged by calli
Transport Unit.
General Hauling
rt of the Board's
Arrangements for general hauling in direct suppo
Unit.
mission can be made by calling the Motor Transport
RESPONSIBILITY
responsible for the
The Division of Support Services will be
administration of the policy.
RECESSION
be amended or
This policy will be reviewed annually and may
ces warrant.
otherwise changed from time to time as circumstan

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

INFORMATION RFOTIPST FORM

ded home-to-work
Government officials that have been provi
government-owned or
transportation since January 1, 1q85 in
les with or
government-leased vehicles includina vehic
each official.
without a driver. Use a separate form for
If none please so indicate.

NAME OF GOVERNMENT OFFICIAL:
Preston Martin

TITLE OR POSITION OF GOVERNMENT OFFICIAL:
ve System
Vice Chairman, Board of Governors of the Federal Reser

AUTHORITY OR JUSTIFICATION FOR HOME-TO-WORK
TRANSPORTATION: Use of vehicles is in connection with
late night
exceptional circumstances with official travel and
work or official functions.
(select one):
FREQUENCY OF HOME-TO-1401:W TRANSPORTATION

Daily

times per week

times per month

Other (describe)

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

ad hoc (average of 6 single way trips
per month since 1/1/85)

D:
INDICATE WHETHER VEHICLE IS OWNED OR LEASE

tified in part 1
Relatives of the government official iden
since January 1,
that have been provided transportation,
sed vehicles,
1985, in government-owned or government-lea
a driver, when not
including vehicles with or without
If none please so
accompanied by the government official.
indicate.

NONE

ON:
NAME OF RELATIVE PROVIDED TRANSPORTATI

RELATIONSHIP TO GOVERNMENT OFFICIAL:

FREQUENCY OR OCCASION:

AUTHORITY OR JUSTIFICATION:

OR LEASED:
INDICATE WHETHER VEHICLE IS OWNED

of policy, or explanation
Written instructions, statement
k transportation
of authority concerning home-to-wor
identified in part 1
furnished to any government official
above.

If none please so indicate.

See attached Management Policy Statement
DESCRIPTION (also provide a copy):

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Individual who can be contacted concerning any of the data
shown on this form.

NAME:
Robert E. _Frazier

TITLE OR POSITION:
Director, Division of Support Services

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PHONE:
452-3816

Attachment

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE
APPROVED BY

2/4/85

DATE OF REVISION

PASSENGER AND UTILITY VEHICLE POLICY
POLICY STATEMENT
The Board has elected to comply with the provisions of Title 31,
U.S. Code, concerning the operation of is vehicles. Specifically,
states, that government vehicles ma y only be used for "official
purposes" and "official purposes" does not include home-to-work transportation.
Under Board policy the motor vehicles operated by the Board to
meet its official transportation needs may not be used for transportation
of Board Members or other Board employees between their residences and their
place of employment, unless security requirements or exigent circumstances
make such transporation essential. The policy also provides that when it is
clearly in the best interests of the Board, transportation may be provided to
and from Board Members' homes in connection with official travel. Such
transportation may also be provided on rare occasions when Board Members
must work exceptionally late hours or attend official functions which extend
into the late evening.
GUIDELINES
PASSENGER VEHICLE OPERATIONS
Priority for the use of the Board's motor vehicles is given to
Board Members, Senior officials of the Board's staff and Senior officials
of Federal Reserve Banks.
The supervisor of the Motor Transport Unit is responsible for
all vehicle operations and requests for transportation should be made to the
Motor Transport Unit (ext. 3463 or 3464), located in the Board Garage.Requests for transportation should be arranged as far in advance
as possible in order that trips may be consolidated to insure maximum use of
vehicles, as well as consideration for use of public transportation.
Requests should also specify the destination, return trip requests and any
other pertinent information. The Motor Transport Dispatcher should be
notified promptly of cancellations and delayed trips.
Chauffeurs' normal work days are staggered so that they are on duty
from 7:00 a.m. to 9:00 p.m.; whenever possible trips should be scheduled to be
completed during this period in order to avoid payment of overtime.
UTILITY VEHICLE OPERATIONS
Utility vehicles are used to support the Board's mail delivery and
pick-up service; pick-up and delivery of general supplies and shuttle service.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

24 85

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE
APPROVED BY
DATE OF REVISION

Mail Delivery and Pick -Up Service
5 a.m., 1:15 p.m.
Deliveries are scheduled for 9:30 a.m., 11:1
ay. All mail should be accompanied
and 2:15 p.m. daily, Monday through Frid
Delivery) and brought to the Board
by FR Form 477 (Request for Pick-Up and
very. Mail pick-up from other
Garage at least 15 minutes prior to deli
Room (G-233, ext. 3250) for
agencies will be brought to the Board's Mail
further distribution.
Shuttle Service
s from Foggy Bottom
Foggy Bottom Metro Station - Morning trip
Building South Garage, are on a
Metro Station to the 1-G Level, Martin
to 9:30 a.m. Afternoon trips from
turnaround basis starting at 7:00 a.m.
to the Foggy Bottom Metro Station
1-G Level, Martin Building South Garage,
last trip at 6:00 p.m.
start at 4:00, 4:30, 5:00, 5:25, with the
by calling the Motor
Airport and Hotels - Trips can be arranged
Transport Unit.
General Hauling
ct support of the Board's
Arrangements for general hauling in dire
t
r Transpor Unit.
mission can be made by calling the Moto
RESPONSIBILITY
be responsible for the
The Division of Support Services will
administration of the policy.
RECESSION
and may be amended or
This policy will be reviewed annually
circumstances warrant.
otherwise changed from time to time as

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

INFORMATION REOTIFST FORM

been provided home-to-work
Government officials that have
or
1, 1q85 in government-owned
transportation since January
uding vehicles with or
government-leased vehicles incl
form for each official.
without a driver. Use a separate
If none please so indicate.

NAME OF GOVERNMENT OFFICIAL:
Henry C. Wallich

NT OFFICIAL:
TITLE OR POSITION OF GOVERNME
ral Reserve System
Governor, Board of Governors of the Fede

HOME-TO-WORK
AUTHORITY OR JUSTIFICATION FOR
TRANSPORTATION:
exceptional circumstances
Use of vehicles is in connection with
or official functions.
with official travel and late night work
SPORTATION (select one):
FRFOUENCY OF POmF-TO-wORK TRAN

Daily
times ver week

times per month

Other (describe)

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

trips per
ad hoc (average of 4 single way
85)
1/1/
month since

OWNED OR LEASED:
INDICATE WHETHER VEHICLE IS

al identified in part 1
Relatives of the government offici
ortation, since January 1,
that have been provided transp
ernment-leased vehicles,
1985, in government-owned or gov
t a driver, when not
including vehicles with or withou
icial. If none please so
accompanied by the government off
indicate.
NONE

ORTATION:
NAME OF RELATIVE PROVIDED TRANSP

ICIAL:
RELATIONSHIP TO GOVERNMENT OFF

FREOUENCY OR OCCASION:

AUTHORITY OR JUSTIFICATION:

ED OR LEASED:
INDICATE WHETHER VEHICLE IS OWN

lanation
ent of policy, or exp
Written instructions, statem
e-to-work transportation
of authority concerning hom
in part 1
t official identified
furnished to any governmen
above.

If none please so indicate.

icy Statement
See attached Management Pol
a copy):
DESCRIPTION (also provide

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

of the data
Individual who can be contacted concerning any
shown on this form.

NAMF:
Robert E. Frazier

TITLE OR POSITION:
Director, Division of Support Services

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PHONE:

452-3816

Attachment

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE
APPROVED ElY

2/4/85

DATE OF REVISION

PASSENGER AND UTILITY VEHICLE POLICY
POLICY STATEMENT
The Board has elected to comply with the provisions of Title 31,
cally,
U.S. Code, concerning the operation of motor vehicles. Specifi
"official
for
used
31, U.S.C. states, that government vehicles may only be
rtation.
transpo
-work
purposes" and "official purposes" does not include home-to
Under Board policy the motor vehicles operated by the Board to
tation
meet its official transportation needs may not be used for transpor
and their
es
of Board Members or other Board employees between their residenc
place of employment, unless security requirements or exigent circumstances
it is
make such transporation essential. The policy also provides that when
to
provided
be
may
clearly in the best interests of the Board, transportation
Such
and from Board Members' homes in connection with official travel.
transportation may also be provided on rare occasions when Board Members
extend
must work exceptionally late hours or attend official functions which
into the late evening.
GUIDELINES
PASSENGER VEHICLE OPERATIONS
Priority for the use of the Board's motor vehicles is given to
s
Board Members, Senior officials of the Board's staff and Senior official
of Federal Reserve Banks.
The supervisor of the Motor Transport Unit is responsible for
to the
all vehicle operations and requests for transportation should be made
Garage.
Board
the
Motor Transport Unit (ext. 3463 or 3464), located in
Requests for transportation should be arranged as far in advance
use of
as possible in order that trips may be consolidated to insure maximum
.
vehicles, as well as consideration for use of public transportation
any
Requests should also specify the destination, return trip requests and
be
other pertinent information. The Motor Transport Dispatcher should
notified promptly of cancellations and delayed trips.
Chauffeurs' normal work days are staggered so that they are on duty
d to be
from 7:00 a.m. to 9:00 p.m.; whenever possible trips should be schedule
completed during this period in order to avoid payment of overtime.
UTILITY VEHICLE OPERATIONS
Utility vehicles are used to support the Board's mail delivery and
service.
pick-up service; pick-up and delivery of general supplies and shuttle

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

16.

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE
APPROVED BY
DATE OF REVISION

General Hauling
of the Board's
Arrangements for general hauling in direct support
mission can be made by calling the Motor Transport Unit.
RESPONSIBILITY
nsible for the
The Division of Support Services will be respo
administration of the policy.
RECESSION
amended or
This policy will be reviewed annually and may be
ces warrant.
otherwise changed from time to time as circumstan

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

INFORMATION RFOTIFST FORM

ded home-to-work
Government officials that have been provi
government-owned or
transportation since January 1, 1485 in
les with or
government-leased vehicles including vehic
each official.
without a driver. Use a separate form for
If none please so indicate.

NAME OF GOVERNMENT OFFICIAL:
Martha R. Seger

TITLE OR POSITION OF GOVERNMENT OFFICIAL:
m
Governor, Board of Governors of the Federal Reserve Syste

AUTHORITY OR JUSTIFICATION FOR HOME-TO-WORK
TRANSPORTATION:
ces,
Use of vehicles is in connection with exceptional circumstan
ions.
funct
ial
with official travel and late night work or offic

(select one):
FRFOUENCY OF ROMP-TO-WORK TRANSPORTATION

Daily

times per week

times per month

Other (describe)

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

ad hoc (average of 4 single way trips every
month since 1/1/85)

D:
INDICATE WHETHER VEHICLE IS OWNED OR LEASE

identified in part 1
Relatives of the government official
tation, since January 1,
that have been provided transpor
rnment-leased vehicles,
1985, in government-owned or gove
a driver, when not
including vehicles with or without
cial. If none please so
accompanied by the government offi
indicate.
NONE

TATION:
NAME OF RELATIVE PROVIDED TRANSPOR

:
RELATIONSHIP TO GOVERNMENT OFFICIAL

FRFOUENCY OR OCCASION:

AUTHORITY OR JUSTIFICATION:

INDICATE WHETHER VEHICLE IS

nwNFD OR LEASED:

ion
t of policy, or explanat
Written instructions, statemen
-to-work transportation
of authority concerning home
1
cial identified in part
furnished to any government offi
.
above. If none please so indicate
See attached Management Policy Statement
):
DESCRIPTION (also provide a copy

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

data
Individual who can be contacted concerning any of the
shown on this form.

NAME:
Robert E. Frazier

TITLE OR POSITION:
Director, Division of Support Services

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PHONE:
452-3816

•M\

Attachment

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE
APPROVED BY

2/4/85

DATE OF REVISION

Requests for transportation should be arranged as far in advance
as possible in order that trips may be consolidated to insure maximum use of
vehicles, as well as consideration for use of public transportation.
Requests should also specify the destination, return trip requests and any
other pertinent information. The Motor Transport Dispatcher should be
notified promptly of cancellations and delayed trips.
Chauffeurs' normal work days are staggered so that they are on duty
from 7:00 a.m. to 9:00 p.m.; whenever possible trips should be scheduled to be
completed during this period in order to avoid payment of overtime.
UTILITY VEHICLE OPERATIONS
Utility vehicles are used to support the Board's mail delivery and
pick-up service; pick-up and delivery of general supplies and shuttle service.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

MANAGEMENT
POLICY
STATEMENT

DATE

2 4 85

APPROVED BY
DATE OF REVISION

Mail Delivery and Pick-Up Service
1:15 p.m.
Deliveries are scheduled for 9:30 a.m., 11:15 a.m.,
should be accompanied
and 2:15 p.m. daily, Monday through Friday. All mail
brought to the Board
by FR Form 477 (Request for Pick-Up and Delivery) and
p from other
Garage at least 15 minutes prior to delivery. Mail pick-u
ext. 3250) for
3,
(G-23
Room
Mail
's
agencies will be brought to the Board
further distribution.
Shuttle Service
Bottom
Foggy Bottom Metro Station - Morning trips from Foggy
on a
are
e,
Garag
South
ng
Metro Station to the 1-G Level, Martin Buildi
from
trips
noon
After
a.m.
turnaround basis starting at 7:00 a.m. to 9:30
on
Stati
Metro
Bottom
Foggy
the
1-G Level, Martin Building South Garage, to
p.m.
6:00
at
trip
start at 4:00, 4:30, 5:00, 5:25, with the last
ng the Motor
Airport and Hotels - Trips can be arranged by calli
Transport Unit.
General Hauling
rt of the Board's
Arrangements for general hauling in direct suppo
mission can be made by calling the Motor Transport Unit.
RESPONSIBILITY
nsible for the
The Division of Support Services will be respo
administration of the policy.
RECESSION
amended or
This policy will be reviewed annually and may be
ces warrant.
otherwise changed from time to time as circumstan

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Federal Reserve Bank of St. Louis

UNITED STATES GENERAL ACCOUNTING OFFICE
WASHINGTON, D.C. 20548

GENERAL GOVERNMENT
DIVISION

(
4-W4
3
iY)

The Honorable Paul A. Volcker
Chairman, Federal Reserve System
Dear Mr. Volcker:

The General Accounting Office has been requested by the
Chairman of the Subcommittee on Legislation and National Security, House Committee on Government Operations, to determine
which government officials have been provided government transportation between their homes and their places of employment in
the United States since January 1, 1985, and to obtain other related information. This work is being performed under GAO's
assignment code 014010.
In order to meet the Chairman's request for our expeditious
response, we request that within ten calendar days from the date
of this letter your agency complete the attached information request form and return it to:
United States General Accounting Office
Attention: Hugh Pollon
Room B-242
General Services Administration Building
18th and F Streets, N.W.
Washington, D.C. 20405
Please prepare a separate form for each official who has
been provided home to work transportation or return the form
with a negative response when that is applicable. Also please
show in part four on the form the name of an agency representative we may contact in the event we may wish to clarify or
verify any of the information provided.
If you should have any questions or wish further information about this request, you may call Hugh G. Pollon or Tyrone
Mason on 557-7944.
Sincerely yours,

oki4

22(aA

ames G. Mitchell
Senior Associate Director
Enclosures

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Federal Reserve Bank of St. Louis

INFORMATION RFOTTPST FORM

Government officials that have been provided home-to-work
transportation since January 1, 1q85 in government-owned or
government-leased vehicles includina vehicles with or
without a driver,

If none please so indicate.

NAME OF GOVERNMENT OFFICIAL:

TITLE OR POSITION OF GOVERNMENT OFFICIAL:

ATITHORITY OR JUSTIFICATION FOR HOME-TO-WORK
TRANSPORTATInm:

FREOUENCY OF POMP-TO-WORK TRANSPORTATION (select one):

Daily

times per week

times per month

Other (describe)

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Federal Reserve Bank of St. Louis

•

rise a separate form for each official.

INDICATE WHETHER VEHICLE IS OWNED OR LEASED:

Relatives of the government official identified in part 1
that have been provided transportation, since January 1,
1985, in government-owned or government-leased vehicles,
including vehicles with or without a driver, when not
accompanied by the government official.

If none please so

indicate.

NAME OF RFLATIVP PROVIDED TRANSPORTATION:

RELATIONSHIP TO GOVERNMENT OFFICIAL:

FRFOUENCY OR OCCASION:

AUTHORITY OR JUSTIFICATION:

TNDICATF WRPTHFR VFHICLF T

OWNFD nR LEASED:

Written instructions, statement of policy, or explanation
of authority concerning home-to-work transportation
furnished to any government official identified in part 1
above.

If none please so indicate.

DESCRIPTION (also provide a copy):

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Federal Reserve Bank of St. Louis

•

Individual who can be contacted concerning any of the data
shown on this form.

NAME:

TITLE OR POSITION:

PHONE:

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Federal Reserve Bank of St. Louis

COMPTROLLER GENERAL OF THE UNITED STATES
WASHINGTON D.C. 20548

September 13, 1984

-,
1

Cr)
rr1

aroma

72
,
rri --n
cra
"LI tr. C7.
4
.<
t
r-r-7
rn

The Honorable Paul A. Volcker
Chairman, Board of Governors of
the Federal Reserve System
Washington, D.C. 20551

Dear Chairman Volcker:
We are scheduled to meet on October 9 at 4:00 p.m. in
your office. At that time, I would like to give you some
background about the Comptroller General's Consultant Panel,
to whom you have agreed to speak on the evening of November 8.
I would also like to use the opportunity of our meeting
to discuss with you our efforts to encourage a fundamental
reform of the federal government's financial management structure.
Some of our ideas, on issues ranging from budget formulation
to financial reporting are discussed in a two-volume draft
report, of which I have enclosed a copy. I would greatly value
your reaction to those ideas, your suggestions as to other
issues we should raise, and your advice on how we can best
proceed in developing a consensus on solutions.
Sincer

y yours,

44
41
4
Charles A. Bowsher
Comptroller General
of the United States
Enclosure--Draft Report "Managing the Cost of Government:
Building An Effective Financial Management Structure"
(GAO/AFMD-84-43 and 43-A)

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Federal Reserve Bank of St. Louis

•

COMPTROLLER GENERAL'S CONSULTANT PANEL

4/27/84

Barreaux, Theodore C.
Vice-President in charge of
Washington Office of
American Institute of
Certified Public Accountants

Former Assistant to the Chairman
and Directol of Congressional
Relations, SEC (1972-76).

Bucy, J. Fred
President a pd Chief Operating
Texas Instruments,
Of
Inc.

With Texas Instruments since
1953; numerous awards for
engineering excellence;
numerous related associations
including senior consultant
to Defense Science Board and
Member of Technology Assessment Advisory Council of OTA.

Burton, John C. (Dr.), Dean,
Graduate School of Business,
Columbia University

Served 4 years as Chief
Accountant of the SEC and was
Deputy Mayor for Finance of
the City of New York before
going to Columbia University.

Cardwell, James Bruce
Executive Vice-President,
Blue Cross Blue Shield
Association

Former Commissioner of Social
Security (1973-77) and other
senior positions within HEW
(1958-73).

Chetkovich, Michael N.
Director, External Affairs,
University of California
(Berkeley)

Former Managing Partner,
Deloittee, Haskins & Sells.

Cohen, Sheldon
Attorney
Cohen & Uretz

Former chief counsel of IRS
(1963-65) and IRS Commissioner
(1965-69); member of current
firm since 1969; serves on
numerous public and religious
boards and commissions.

Coleman, William
Attorney
O'Melveny & Myers

Former Secretary of Department
of Transportation (1975-77);
serves on numerous boards of
directors (IBM, Chase
Manhattan, Pepsi Co., others);
served on numerous governmental and civic boards and
commissions.

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Federal Reserve Bank of St. Louis

Dunlop, John T. (Dr.)
Lamont University Professor,
Harvard University

Former Secretary of Labor
(1975-76); prominent in labor
relations field.

Franklin, Barbara Hackman
Senior Fellow, Wharton School
(Director of Public Policy
Fellowship Program)

Former White House Staff member
and Commissioner, U.S. Consumer
Product Safety Commission.

Grayson, C. Jackson, Jr. (Dr.)
Chairman, Board of Directors,
The American Productivity
Center, Inc.

Former Chairman, U.S. Price
Commission; current member of
President's National Productivity Advisory Committee.

Holland, Robert C. (Dr.)
President, Committee for
Economic Development

Former member of the Board of
Governors of the Federal
Reserve System.

Inman, Bobby R.
President and Chief Executive
Officer,
Microelectronics and Computer
Technology Corp.

Retired Admiral, USN. Naval
intelligence specialist.
Former Deputy Director,
Central Intelligence Agency,
and Director, National
Security Agency.

Kent, Ralph E.
Retired

Former Senior Partner of
Arthur Young & Co., and served
as President of the AICPA.

Laird, Melvin R.
Senior Counsellor,
Reader's Digest Assn.

Served as Secretary of Defense,
Counsellor to the President on
Domestic Affairs; Former Member
of Congress.

Lee, Kent
Farmer

Retired Vice Admiral, USN.;
former Chief of Air Systems
Command. Held numerous
important policy positions and
sea commands.

Linowes, David F.
Harold Boesehenstein Professor
of Political Economy and
Public Policy, University of
Illinois

Former partner Leopold & Linowes,
CPAs (1946-62); partner S.D.
Leidesdorf & Co., CPAs (196365) and Laventhol & Horwath
(1965-75); serves on several
corporate boards of directors;
former Chairman of Federal
Privacy Protection Commission.

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Federal Reserve Bank of St. Louis

Luce, Charles F.
Attorney
Preston, Ellis and Holman

Recently joined law firm in
Portland, Oregon; served as
Chairman of Consolidated
Edison Co., of New York from
1967-82 and was Under Secretary of Interior 1966-67.

MacLaury, Bruce K.
President
The Brookings Institution

Served as President of the
Federal Reserve Bank of
Minneapolis (1971-77) and
Treasury's Deputy Under
Secretary for Monetary Affairs
(1969-71).

Paget, Richard M.
President
Cresap, McCormick and Paget

Former Member, President Nixon's
Counsil on Executive Organization; former Captain, USN
Reserve.

Peet, Raymond E.
Vice President-International
and Consultant to the
President, Teledyne Ryan
Aeronautical Co.

Retired Vice Admiral, USN.
Areas of expertise are command
and control, nuclear power
applications, and foreign
military sales. Held numerous
important policy positions and
sea commands.

Petrie, Donald A.
Partner
Lazard Freres & Co.

Since 1966 has been a financial
consultant; previously Chairman of the Executive Committee,
AVIS, Inc.; President, Hertz
American Express International;
Executive Vice President, Hertz
Corp.
NI"

Rhinelander, John
Attorney
Shaw, Pittman, Potts
& Trowbridge

Former Undersecretary of HUD
(1975-77) and general counsel
HEW (1973-75); other legal
positions in U.S. Government
including advisor to SALT
delegation (1971-72). With
firm since 1977.
current
.

Richardson, Elliot L.
Attorney
Milbank, Tweed,
Hadley & McCloy

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Federal Reserve Bank of St. Louis

Former Under Secretary of State,
Secretary of Commerce, Defense
and HEW; Attorney General; and
Ambassador-at-Large.

Schaetzel, J. Robert
Retired

Former Ambassador to the
European Community (1966-72);
Deputy Assistant Secretary of
State for Atlantic Affairs
(1962-66); other senior State
Department positions
(1945-62).

Seamans, Robert C. Jr. (Dr.)
Henry R. Luce Professor of
Environment and Public
Policy, Massachusetts
Institute of Technology

Former Dean of Engineering, MIT
(1977-81); Administrator of
ERDA (1974-77); President,
National Academy of Engineering (1973-74); Secretary of
the Air Force (1969-73);
Associate Administrator and
then Deputy Administrator,
NASA (1960-68).

Simmons, Edwin H.
Director, Marine Corps
Historical Center

Retired Brigadier General, USMC.
Highly decorated for activities spanning a diversified
military career beginning in
1942.

Weaver, Robert (Dr.)

Formerly Distinguished Professor
Emeritus, Hunter College
(1970-80); President,
Bernard M. Baruch College
(1969-70); Secretary, HUD
(1966-68); Administrator,
Housing and Home Finance
Administration (1961-66).

Weinberg, Sidney J., Jr.
Partner
Goldman, Sachs & Co.

With Goldman, Sachs as an
investment banking specialist
since 1965; previously with
Owens-Corning Fiberglass Corp.
(1949-65).

Williams, Karen Hastie
Attorney
Crowell & Moring

Served as Administrator, Office
of Federal Procurement Policy
(OMB), Chief Counsel, U.S.
Senate Committee on the Budget,
and Law Clerk to Associate
Justice Thurgood Marshall.

Zwick, Charles J.
Chairman
Southeast Banking, N.A.

With Southeast Banking as
President from 1969-82; with
Bureau of the Budget from
1965-69 serving as its
Director.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

•••

•',0of 001,4.. •„.

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551

Division of
Research and Statistics

June 26, 1981

Mr. William J. Anderson
Director
United States General
Accounting Office
Washington, D.C. 20548
Dear Mr. Anderson:
This letter is written in response to your recent request for comments
on the GAO draft report entitled "The Congress Should Control Federal Credit
Programs to Promote Economic Stabilization."
The rapid and uncontrolled growth of federal credit activities over
the past decade is a subject of concern to the Federal Reserve. The fact that
the volume of direct loans and loan guarantees outstanding has nearly tripled
over the past decade, together with the widening range of economic activities
assisted by federal credit programs, suggests the need for systematic review
by the Congress. Nevertheless, it does not seem to us appropriate to attempt
to use controls over federal credit programs for countercyclical purposes as
the GAO report suggests.
Some important progress has been made toward establishing comprehensive review of federal credit programs in the context of the budget process.
As you know, information on federal credit programs is now more readily available to the Congress and the public, and procedures for subjecting federal
credit programs to budgetary control were tried on an experimental basis in the
last session of Congress. This effort, however, is still in its infancy. It
inevitably involves many difficulties including the necessity for the Congress
to become familiar with the new information and to make hard decisions in the
very sensitive area of committee jurisdiction. Therefore, it seems inappropriate now to complicate the problems with which the Congress is struggling.
The GAO draft report would tend to do so by recommending specific objectives
for control when the procedures for achieving control are not yet well established.
Furthermore, we believe that efforts to achieve better cyclical
control of federal credit programs would stand in the way of achieving other
objectives with higher priority. In our view, it is more important for the
Congress to focus its main attention on achieving a better understanding of
the allocative efforts (and possible unintended side-effects) of the broad
array of credit programs, and on limiting the long-run expansion of federal
credit programs by assessing whether some programs which served high-priority
social purposes in the past may now divert credit from more important uses.
In addition, it is important for the Congress to develop criteria for

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Federal Reserve Bank of St. Louis

Mr. William J. Anderson
Page 2
determining whether credit assistance, direct spending or tax provisions are
the most appropriate tools for achieving the goals of specific programs.
Emphasis on the cyclical characteristics of federal credit programs
must take into account the specific intent of some programs to protect certain
types of borrowers--those deemed to be disadvantaged in credit markets or to
have very high-priority needs--from fluctuations in the cost and availability
of credit. Before making a sweeping recommendation that the aggregate volume
of federal credit assistance should be controlled with a view toward stabilization objectives, it would appear desirable to assist the Congress in determining the number and size of programs that are inherently procyclical. In
addition, the Congress will need assistance with the difficult problem of
determining the economic costs of procyclical patterns in federal credit programs in order to balance these costs against the benefits of assisting particular groups of borrowers.
Finally, it should be noted that the thrust of economic policy recently
has been to focus on longer-term objectives rather than on cyclical stabilization.
Reports by the Joint Economic Committee during the last Congress, for example,
emphasized pursuit of steadier and more predictable policies and gave a highpriority to attacking structural problems such as slow productivity growth and
imperfections in labor markets. The current administration is also emphasizing
the predictability of economic policy in view of the important role of expectations in influencing economic developments. Thus, the central premise of the
GAO draft report seems to be at variance with the general direction of current
economic policy.
In regard to the recommendation that the Congress require periodic
reports by the Board of Governors on the success of any mechanisms for controlling federal credit programs, we would like to note that the reports submitted
twice a year under the Humphrey-Hawkins Act provide a forum in which the Board
can discuss conditions in financial markets and the relation between the goals
of monetary policy and budgetary policy. Additional and separate reports,
focused solely on federal credit programs, would not appear to assist policy
coordination. On the contrary, reports evaluating growth and fluctuations in
federal credit assistance that had already occurred might serve only to generate
needless controversy.
I appreciate the opportunity to comment on the draft report and hope
that these comments will be useful to you.
Sincerely yours,

James L. Kichline
Director
SLepper/LEGramley/JLKichline:lw
(OSDM #155)
bcc: Governor Gramley, Ms. Lepper, Mr. Mulrenin, Ms. Wolfe (2)

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Federal Reserve Bank of St. Louis

•

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Office Correspondence
To
From

James L. Kichline
Office of Staff Director
for Management
(Edward T. Mulrenin)

Date
Subject:

may_2_8_4__1981

GAO Draft Report

I) Attached is a copy of a recently received draft GAO report.
We were not involved in the preparation of this report. Please note
that the report contains a recommendation for consideration by the
Congress that the Federal Reserve, as well as other government agencies,
prepare periodic reports on the success of the operation of the proposed control mechanism for Federal credit assistance programs. Because
of the recommendation, GAO would like to get our comments on the draft
report.
Normally, all responses to draft GAO reports with recommendations
to the Fed are reviewed by the pertinent oversight committee and the
Board. It may be that because this study was done by a unit in GAO
other than that assigned to the Federal Reserve and because the recommendation is to the Congress and not to the Federal Reserve, the Board
should not get involved in a response, and if any response is to be
submitted at all, it should remain at the staff level. Because you are
closest to the situation, I will leave to your discretion whether the
Board itself should get involved in the response. At a minimum, though,
I would recommend that staff comment on the technical aspects of the
report and the recommendation regarding the Fed.
Please let me know which path you think the response to the
report should take. If it is to be reviewed by the Board, it must go
on or about June 22 since the response to GAO is due on June 26.
Attachments
cc:

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Federal Reserve Bank of St. Louis

Ms. Wells (#55)
Ms. Doying

63OA 4'7/
UNITED STATES GENERAL ACCOUNTING OFFICE

z en
tr Vk
s j:
lq.'outcl‘

WASHINGTON, D.C. 20548

GENERAL GOVERNMENT
DIVISION

MAY 2 7 1981

The Honorable Paul A. Volcker
Chairman, Board of Governors
of the Federal Reserve System
Dear Mr. Volcker:
Enclosed are five copies of a draft of our proposed report to the
Congress on the role of Federal credit assistance activities in economi
c
stabilization.
We are providing the draft report to the Board for review and comment
before it is issued in final form.
It is requested that your comments be provided by 30 days from
the
above date. Public Law 96-226 limits the period of time for comment
on
this report to 30 days from the date of this letter unless the
Comptroller
General grants an extension after the head of the agency (1) shows
that
a longer period is necessary and (2) shows that an extension is likely
to result in improvement in the accuracy of the report. In any event,
no extensions will be granted beyond 60 days. If you cannot meet
the
30-day deadline, please contact Mr. James Bellkat 275-1551 immedia
tely.
As indicated on the draft report cover, the draft and all of its
copies belong, and must be returned on demand, to the General Account
ing
Office. Also, the report's use is restricted and its publication or
other improper disclosure should be prevented.
Should you have any questions, please contact Mr. Bell of our
Program Analysis Division.
Sincerely yours,
`&3,9
William J. Anderson
Director
Enclosures - 5

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Federal Reserve Bank of St. Louis

*Also Craig Simmons
R.. 7

11(3-z-t-42-vv
BOARD OF 30VERNORS
OF THF:

FEDERAL RESERVE SYSTEM

Office Correspondence
To

Board Members

From

Edward T. Mulrenin

Date
Subject:

2
--

February 23, 1981

GAO Draft Report Proposing

Closing of the Federal Reserve Banks

Attached for your information is he digest of the GAO's draft
report dealing with the feasibility of closing the Federal Reserve Banks.
Congressman Reuss requested the study. There are no recommendations in
the report. GAO's conclusion is that shifting the functions of the Banks
elsewhere saves the taxpayer nothing. Please let me know if you wish
to see a copy of the complete draft report.
Attachment

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Federal Reserve Bank of St. Louis

UNITED STATES GENERAL ACCOUNTING OFFICE
WASHINGTON, D.C. 20548

GENERAL GOVERNMENT
v sION

sEB 18 1981

The Honorable Paul A. Volcker
Chairman, Board of Governors
of the Federal Reserve System
Dear Mr. Volcker:
In accordance with Public Law 95-320, we are sending,
for your review and comment, 25 copies of our draft report
to the former Chairman of the House Committee on Banking,
Finance and Urban Affairs concerning the effects of a proposed closing of the Federal Reserve Banks. You have 30
days to submit comments on this proposed report. If you
have difficulty meeting this requirement, please contact
us as soon as possible.
All copies of this draft belong to the General Accounting Office and must be returned on demand. Use of this draft
is restricted and its publication or other improper disclosure
should be prevented.
Your comments will be included in our final report. If
you have any questions about the draft, please contact Charlie
Daniel on 452-2833 or Steven Virbick on 275-3641.
Sincerely yours,

• 0...).,f31.a.".".imp.k,

William J. Anderson
Director
Enclosures - 25

•41611111.....
••,•

•

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• 1.44
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•,

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Federal Reserve Bank of St. Louis

1,
,
47
171
1.#

••

OP •

'4.4'..."1111.0.L0,04a114010.4

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bor,

DRAFT

DRAFT OF A
PROPOSED REPORT
RESPONSE TO QUESTIONS BEARING
ON THE FEASIBILITY OF CLOSING THE FEDERAL
RESERVE BANKS

NOTICE—THIS DRAFT RESTRICTED TO OFFICIAL USE
This document is a draft of a proposed report of the General Accounting Office. It was
prepared by GAO's staff as a basis for obtaining advance review and comment by those having
responsibilities concerning the subjects discussed in the draft. It has not been fully reviewed
within GAO and is, therefore, subject to revision.
Recipients of this draft must not show or release its contents for purposes other than official
review and comment under any circumstances. At all times it must be safeguarded to prevent
publication or other improper disclosure of the information contained therein. This draft and
all copies thereof remain the property of. and must be returned on demand to, -the General
Accounting Office.

PREP AR ED
BY TIIE STAFF
OF TIIE
U.S. GENERAL kCCOUNTING OFFICE

GAO Form 515 p1/77)
R•ploess GAO Forms 331, 332, ord 333

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Federal Reserve Bank of St. Louis

DRAFT

DRAFT
COVER SUMMARY
The Federal Reserve Banks spent an
estimated $790 million on their operations in 1980. They own property
and equipment worth an estimated
$853 million. Closing the banks
to save the operating expenses and
I.in from the sale of property
raises important cost, service and
policy questions. It is not readily
apparent that any alternative is ready
to replace them. Clearly no one alternative will answer all the service,
policy and cost considerations.

DRAFT

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Federal Reserve Bank of St. Louis

DRAF7
CONTENTS
Page
DIGEST
CHAPTER
1

laer'1.1

INTRODUCTION
Why the system was created
The nature of the Federal Reserve
System
Federal Reserve Bank functions
Objective, scope and methodology

1
2
3
5
6
8
8

FEDERAL RESERVE BANK OPERATING COSTS
Operating costs are increasing
Sources of revenues used for
operating expenses
The Federal Reserve System's cost
reporting system
Service lines represent bank
operating costs

OPERATING EXPENSES OF THE BOSTON
FEDERAL RESERVE BANK
Personnel expenses
Materials and supplies expenses
Equipment expenses
Shipping expenses
Travel expenses
Communication expenses
Building expenses
Other expenses

18
19
20
21
21
22
23
23
24

FEDERAL RESERVE BANK PROPERTY AND
EQUIPMENT
Federal Reserve Bank property
by category
Land
Buildings
Building machinery and equipment
Operating machinery and equipment
Artwork

8
9

26
26
27
28
29
30
30

1:),1207
Page
CHAPTER
CLOSING OF FEDERAL RESERVE BANKS WOULD
INVOLVE SEVERAL INTERRELATED FACTORS
Savings and cost factors
Policy factors
Monetary and economic policy
service line
U.S. Treasury and Government agencies
service line
Financial institutions and the public
service line
Supervision and regulation
service line
Conclusions

32
32
37
38
40
42
43
45

APPENDIX

III

Letter dated October 6, 1980 from
Representative Henry S. Reuss
to the General Accounting Office

Federal Reserve Bank operating costs by
service line--calendar year 1979

Federal Reserve Bank operating costs by
service line--calendar year 1980

Operating costs of the Federal Reserve
Bank of Boston--calendar years 1979
and 1980

Federal Reserve Bank property by district

ABBREVIATIONS
FOMC

Federal Open Market Committee

PACS

Planning and Control System

RCPC

Regional Check Processing Center

**Th

-VZ •

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Federal Reserve Bank of St. Louis

i71
1

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Federal Reserve Bank of St. Louis

7Ths. ,..4\ 727
COMPTROLLER GENERAL'S
REPORT TO THE HONORABLE
HENRY S. REUSS
HOUSE OF REPRESENTATIVES

RESPONSE TO QUESTIONS
BEARING ON THE FEASIBILITY
OF CLOSING THE FEDERAL
RESERVE BANKS

DIGEST
The Federal Reserve System was established
in 1913 to serve as the Nation's central
bank. Central bank functions are carried
out under the general guidance of a Board
of Governors which oversees the activities
of 12 regional banks (See ch. 1).
The Federal Reserve Banks, the operating
arms of the central banking system, have
been performing an array of services for
commercial banks and the U.S. Government.
Many of the services performed by the
reserve banks are similar to services performed by commercial banks for their business and individual customers.
With the passage of the Monetary Control
Act of 1980, the Federal Reserve will begin
to charae for services that were free to
its member banks. There is speculation
that the pricing of Federal Reserve services will result in private industry
venders of similar services eventually
competing away the System's customers.
Legislation (H.R. 7001) was introduced
in the 96th Congress to remove the reserve
bank presidents from participating in the
Federal Open Market Committee.
Combining these factors with an interest
in holding down Government spending generally, the former Chairman of the House
Committee on Banking, Housing, and Urban
Affairs has questioned the need for the
continued existence of the 12 Federal
Reserve Districts. To aid the Committee
in its deliberations on this matter, we
were asked to:

1.)1A;t6i-iJ
--Review the costs to operate the Banks.
(See ch. 2.)
--Determine the estimated market value
of Bank property and equipment. (See
ch. 4.)
--Review the operating costs of one
Bank in detail, including administrative costs. (See ch. 3.)
--Present a discussion of the implications of closing the banks. (See
ch. 5.)
OPERATING COSTS
Funds for operating the Federal Reserve
Banks are not appropriated by the Congress,
but are provided out of reserve bank earnings
from open market trading and other sources.
In 1980, reserve bank earnings are projected
to be $12,802 million; operating costs about
$790 million. (See ch. 2.)
Expenses are broken down into four major
categories, representing the major reserve
bank functions:
--Monetary and economic policy,
--Fiscal agency functions,
--Services to financial institutions
and the public, and
--Bank supervision and regulation.
The operating costs of the Federal Reserve
Bank of Boston are presented in detail to
show how funds for operating costs are being
spent. The Boston bank's operating costs
represent almost 7 percent of reserve banks'
operating expenses in 1979 and 1980. (See
ch. 3.)

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FEDERAL RESERVE BANK
PROPERTY AND EQUIPMENT
The Federal Reserve Banks own many kinds
of property--mostly real estate and equipment--that is used in carrying out normal
bank operations. The Banks' property and
equipment is valued at slightly over $853
million.
The reserve banks are undertaking extensive
building programs. In the last 5 years, four
new bank buildings have been completed and
numerous pieces of property acquired for
future use. Building programs--new facilities or renovations--are now planned for seven
additional banks. (See ch. 4.)
Items of operating machinery and equipment
are also constantly being replaced and
upgraded throughout the Federal Reserve
System. Changes may be necessary in view
of the requirements of the Monetary Control Act of 1980 to price services as well
as make system improvements in general.
(See ch. 4.)
IMPLICATIONS OF FEDERAL
RESERVE BANK CLOSING
Considerations to close the Federal Reserve
Banks raise important cost, service and
policy questions. The Federal Reserve
Banks have been in existence for nearly 70
years now and has numerous responsibilities
affecting domestic and foreign banking,
the U.S. economy, and consumers in general.
It is not readily apparent that any alternative is ready to replace them. Clearly
no one alternative will answer all the
service, policy and cost considerations.
Because the Federal Reserve services are
necessary, were the Banks to be eliminated,
the need for similar services will still
exist. In most cases, the various services
or functions will have to be performed by
someone else at a price. Whether or not
any cost savings will result will require
a careful study of cost related factors
such as alternatives to providing similar
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Federal Reserve Bank of St. Louis

services, the quality of the services to
be provided, and the costs to the taxpayer.
Although some reserve bank real property
is located in choice urban sites in cities,
disposal of such property may present
unique problems. It is difficult, if
not impossible, to predict how much could
be realized if the property is sold. In
the past, Banks have experienced gains as
well as losses on real property disposals.
(See ch. 4.)

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CONCLUSIONS
A large portion of the current Federal Reserve Bank
operating expenses would still be incurred if the banks
were to be eliminated. In most cases, the various services
or functions will need to be performed by someone else:
the Board, another regulatory agency, another Federal
agency, or private industry. In general, shifting of
functions from the Federal Reserve Banks to elsewhere in
the Government saves the taxpayer nothing.

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The estimated market value of Federal Reserve Bank
property may not be what the Government would realize from
its sale. As the Boston and Richmond experiences show,
many factors interact to determine how soon a buyer can-Pbe
found and how much a buyer would be willing to pay.
The hypothetical closing of the Federal Reserve Banks
raises a number of important service and policy issues.
The roles of the Federal Reserve Banks in monetary_policy,
as arms of the central bank, and as commercial bank supervisors have been shaped and refined and have grown over the
70 years of their existence. It is not apparent that any one
alternative is ready or able to replace them. Even on a
service-by-service basis, no obvious alternative surfaces
which clearly answers all of the policy and service questions.

Full text of Paul A. Volcker Papers : General Accounting Office, Box 28, Item c199

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