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t ii . . i i Jr I T # i 4 f i I i * ; £ r | I t! \\ M -J I i !! Ill | :. HonotiSU Abraham R i b i c o f f Washington, • ON '7t' D. c . 20510 -^e3f Mr. Chairman : v^|§fet^le SubcocaaitCee nn -e j Efficiency and Open Government T Federal SP Operations Committee S 5 t h*» r e P ° r t to Title II of this b i l l ' d e i i ^ i» the S u ^ Act | requires that m e e t i n g s - Print No. 2 person be open to the * aSencies headed by mor*»i-h provisions- of Title n i hi* ^ ter a careful consideration - a t would seriouslyinterfere t0 Si6 . j ment of the Federal Reserve's statutor^f**** -**” y ^ achiev.- ” KiTS 2 S ttuI““' 1- «-2c«TSS‘»?ti*sru a u S tem fro m t h e F e d e r l T R e s e L v ^ r o l e and m o n e ta r y a u t h o r i t y . E f f e c t i v e e x . ™ ? N« i o n a ssig n e d to th e F e d e ra l R eserve by t h T r ^ , s t r e n g t h and v i t a l i t y o f t h e u s econm m in clu d e: (1) m a in ta in in g th e ^ (2) providing for the e/n^nein needed to o L T c p rom ote ia S " • r« p o n sib ilitia i t o eh* ' t h ? . national currency* -i « * * s o u r c e s , a s t a b l e g e n e r a l Pr i « l e v e l a^ ° o r p a y m e n ts ; and ( 3 ) a s s u r i n g t h e so u n d n e s s sy stem , p re se rv in g o rd e r ^ d o m e s t i c a n d i n ^ l , ^ markets, and promoting develcptnerts in f-f-, '~ t r i b u t e t o an e f f i c i e n t u s e o f r e s o u r c e ^ B° * r d b^ 5 s c e n t r a l bank » » P p tP W i ' •* are * * “ f 1 **1 * *® Che b a l a n c e COf a e " i a l b a n k i n g f tlonal financial - ?- th a t con* rceets regularly to*discM *“ JIdi“ ^ r^ P^ 1^ it1*8* the Board ‘ in international markets, and to'corsid!L hT °“?scic economy and policy actions in these a-eas Th-corf theeffects of monetary ; highly sensitive materials T -la tin ^ to '“ C?*slons inevitably involve tutions, and foreign centml'bankwn^ f i o v e ™ ^ / i“ t i R ■ *» fce.JkeU. N« +k/< ,4^ ^ puW|;, i-’grstvm,; ^ . «6t‘ i -*i ■i i ; .* •srg ismB&tfi? ■S5W iI M i |•#' '-fri*- P : flight f| busines s e s . Again, actions by -the pal icy .o f ter. rcqui re coord ina e lore wi " le •*is foreign ;c;entral l^nks :da satfcers?ptf sea« closure of such information coaid be a source nscnt to other governments as well as our own. m oS embarrass- >=; The functions of monetary policy cann effectively in an open forum, as i s evidenced b is no precedent among the world’ s c e n tra l banks constraints such as would be imposed by s. 5. armed that there Loa un< | H p R p m ___ vw M The bill appears to have two o f which has any relevance to a central banpl One aim, growing out of the evoiu-il tion of this legislation at the; l o c a l a n d S t a t e l e v e l , i s to providaO access jior the press and public to meetings where de cisions are to 3 be made- on contracting for expenditure of public funds. In thi s S regard, it is an anti-corruption proposal. The mere thought that * an anti-corruption bill need apply to the Federal Reserve would cast! douot on the integrity of our N a t i o n ’ s central bank and would under£* “ ‘ "■ ne c oniider.ee in tne collar and the ruture of our econociy. ^ iiie second aim oi the legislation appears to be to improve decision-making by exposing the deliberative process in agencies headed mere than one individual. Open meetings osay b e healthy for the business of a county board of supervisors, a local board of education or even ^or certain Federal regulatory agencies; But such govern mental functions are not analogous to the workings of a central bar.i-cing agency such as the Board of Governors whose deliberations frequently involve highly sensitive financial and econbmic informa tion. It would be just as logical to require open meetings of *he President s Cabinet, or meetings of the Secretary or State with his i-c-p Giues, or on the Secretary of the Treasury with foreign finance ministers. Fortunately, the bill does not reach this absurd result* 3 y - including the Federal Reserve within the definition of an agency" Lov,ever, tne bill seems .to assume that the functions of the Board l e similar to the administrative tas&s of regulatory agencies charged with, say, setting interstate freight rates or work safety standards. This ignores the unique role of a central bank in a nation s economy and could co serious, perhaps- irreparable, damage to our financial system. 1 i. i i i 1'i f.i’ if r^s^ie Ab rahasu • .it-,? 't Pages.' r^we^v' • iJrli|i *j|fa w H k J S .; • • , ,. : -_: \‘ * j .r ‘ ,t .rfy!r> vacsob iaps--but far iron ali--to oe closed. I would subrjLt 'tha puolic interest is served by such aa exercise; in f. or many ^meetings uneer £ p u p 4.1 c; .access s.tatute coul» questions in the tiinds *or the public tt3. motives of the Board of Governor j , even though we were j meticulously within the bounds of the law. ■ Moreover, the clo sed neeting procedures thensel present an almost insuperable ad m in is tra tiv e hurdie. ] these procedures (described*nore f u l l y in the enclosed require that a s e p ara te voe^e be taken each time a meet* cion Oi a meeting i s to be (closed. Even preliminary me* require an o f f i c i a l vote f o r c l o s u r e . A record of such r u s t be made .pi^blie within one cay. The s u b je c t matter meetings with limited e xc eptions, whether open or closec be announced at l e a s t one week In advance. A f u l l writt, plai.civ_A.on, with c e r t a i n exc eptions , must be issue d as to mee.mg i s to be c l o s e d . , P ro spective attend ees must lie ................. and listed, together with their affil i a t i o n s . ‘ A lecoicins must be made of every closed meeting and retained by the agency ror at least two years. * Such transcripts or recordings niust also be furnished to any person requesting them. Any.portion of suer, recordings or transcripts tnat i s determined b ^ ^ j i agency to be e^ctr.pw j.iom public disclosure apparently re qu ires a recorded vote evidencing such determination. ■ - In my judgment, tne complexity of these procedural require ..iv.^v.o -s cO taLly incompatible with tne effective accomplishment o£ trie Bearers responsibilities which often require quick and decisive ^.c-i^n. i.n sum, x see^no alternative to a Complete exclusion from t.:^ r - m ’ s provisions for the Federal Reserve's central banking and -a-uiatory functions. u U S s include the formulation and irqplft. . Jr‘ r-°aei_ary policy, discussions and decisions relating to le..v_ej. or -«■s ■- -^?cr;, bank and bank holding ccmoany i-.:p^visi>n, internal administrative and budgetary decisions necesJ,li; ~r- OLi“ -l'cse runctions (including the Board's oversight responsibilities with respect tc the operations of the Federal, lanks), and related legislative l e t t e r s . 4 ^_JL 1 nope a n a t t h e s e c c r a e n t s w i l l be h e l p f u l to you and the C0 r_n.1 t t e e i n tne a u r t n e r c o n s i d e r a t i o n o f t h i s l e g i s l a t i o n . Sin cerely yours, A r t h u r F . Burns Enclosure Photocopy from Gerald R. Ford Library I t T;av, or c o a r s c . be c 1aimed -ha-: c r e t a i n of the C o a r i ' s r a a p o n s a j i l l t i e s an cne a r e a j : c o n s u l a r p r c a c . i o a —T r u th in Lending -■air v^rauit B i l l i n g , a q u a i C r e d i t O p p o r t u n i t y ,. u n f a i r t r a d e o r a c t i c e s , a na tn e i i . < e - - c o u _ a c o r e u n a e r the .arabit o f 4t h i s l^gjLs law ion w it ho ut ! ; i n v o k i n g t he k i n d o f a d v e r s e c o n s e q u e n c e s I ;have o u t l i n e d . f o r the ; c e n t r a l oan-.cmg r u n a t i e n s . lly n n d i s open on to i s q u e s t i o n , and the Committee may w i s h to c o n s i d e r wh et he r the consumer f u n c t i o n s might be a p p r o p r i a t e l y i m l u d e u . -
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