Full text of Paul A. Volcker Papers : Federal Reserve : Eccles Building Dedication, Box 29, Item c207

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Collection: Paul A. Volcker Papers
Call Number: MC279

Box 29

Preferred Citation: Federal Reserve: Eccles Building Dedication, 1983; Paul A. Volcker Papers,
Box 29; Public Policy Papers, Department of Rare Books and Special Collections, Princeton
University Library
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Federal

The Men
Who Made
the Fed

Reserve Bank of Philadelphia

THE MEN WHO MADE THE FED*
By Lawrence C. Murdoch, Jr.
The Federal Reserve, our central bank, draws strength
from its diversity. It is a regional system which blends
opposing attitudes, interests, hopes and fears. It was
created by Congress but it has many characteristics found in
private enterprise.
The people who played major parts in the birth and
growth of the Fed also were a diverse lot with different
kinds of strengths and abilities. But because of luck,fate or
whatever, the right kind of
person seemed to emerge at
the right time.
The first of the men who
made the Fed, Carter Glass,
we will call the fighter. He
was only five foot-four, but
he could rip into the opposition
like one of the Bantam roosters
he kept as a boy in Lynchburg,
Virginia.
Glass was born in 1858 to an
aristocratic southern family.
The Civil War wiped out his
Carter Glass fought the conparents' fortune and he grew
troversial Federal Reserve Bill
through a hostile Congress.
up knowing poverty and bitterness. At 13, he left school and
found work as a printer's devil. He had to fight to survive as a
boy, and he kept doing it all his life.
'
In this pamphlet the author attempts to draw caricatures rather than paint
portraits. The former simply captures a few outstanding features and
exaggerates them while the latter shows more of a lifelike image.

By age 30 Glass was the owner of the Lynchburg Daily
News. His opinionated editorials led him into politics, and
in 1902 he ran successfully for Congress.
As it turned out, Glass was the kind of warrior it took to
fight the controversial Federal Reserve Bill through a
hostile Congress. He had to overcome opposition from Wall
Street and the bankers on the one hand and the agrarian,
easy-money interests on the other. He got the job done,
however, and the Fed was created just before Christmas in
1913.
Glass was just as pugnacious in the 1930s when efforts
were being made to bring the Fed more under central
control. But, as we shall see, the results were somewhat
different.
Benjamin Strong, the first
president of the New York
Reserve Bank, was the organizer. He started the Bank from
scratch and played a major
role in financing World War
I. He helped discover how
open market operations affect
the economy and was instrumental in the restoration of
the gold standard in the 1920s.
Strong had three older brothers who, like his father and
grandfather, graduated from
prestigious colleges. But when
his time came,the family funds
Benjamin Strong organized
the New York Reserve Bank
had run out and he went to
and tried to dominate the Fed.
work as a bank clerk. Although
he lost this first job because
of poor penmanship, Strong eventually rose to become
president of Bankers Trust, and in 1914, was persuaded to
2

take the presidency of the brand new Federal Reserve Bank
of New York.
In principle, Strong did not favor a regional central
banking system, but since there was one, he felt the real
power should be located in New York. He called the Board
of Governors "a timid bunch" and dominated the System
from Manhattan. He managed this partly because of New
York's status as the nation's
financial center and partly
because of the force of his
own personality.
Marriner Eccles was the
centralizer. He was appointed a Federal Reserve
Board Governor in 1934
near the bottom of the Depression. As a New Dealer,
he felt that monetary policy
should be part of an overall
coordinated effort and he
sought to bring the 12 ReMarriner Eccles sought to centralize authority in the Board of
serve Banks more under
Governors.
the authority of the Board
of Governors in Washington.
Carter Glass, who was in the Senate at the time, was
bitterly opposed to Eccles' plan because he feared it might
reduce the System's independence. The aging warrior
fought hard, won a few skirmishes, but lost the battle.
The Banking Act of 1935, which Eccles backed, gave
complete control over the purchase and sale of government
securities to the Federal Open Market Committee. Before
that, the individual Reserve Banks had had some degree of
authority to conduct such transactions on their own.
The Act authorized the President to appoint the Chairman
of the Board of Governors and, in turn, gave the Board the

power to approve the selection of Reserve Bank presidents
and first vice presidents. In addition, the Board got new
authority over discount rates, reserve requirements, and the
management of Reserve Banks. President Roosevelt used
his new power and appointed Eccles Chairman in 1936.
Eccles' grandfather brought his family from the slums of
Glasgow, Scotland, to Utah, where the clan prospered and
his father, David, built up a chain of successful businesses.
From the age of eight, the young Eccles worked every
summer in one of his father's factories and put all his
earnings in a bank. At 19 he began a two-year stint as a
Mormon missionary in Scotland.
David Eccles died when his son was 22 and left him a
business empire worth 7 million dollars. Marriner Eccles
managed things so well that he was head of a chain of 26
banks, as well as many other businesses, when he came to
the Fed.
He was a small man with a narrow face and keen eyes. A
biographer said he had a dry, impersonal manner and let
himself go only when out shooting ducks or when given a
bag of peanuts.
Eccles' ideology was fervent but far from inflexible. He
favored easy money and deficit spending in the depressed
1930s, but in the latter 1940s when inflation was more the
problem he pushed for higher interest rates and a balanced
budget.
The Federal Reserve had "pegged" interest rates at low
levels in order to help finance World War II. When the
hostilities were over, the Treasury wanted the low rates to
continue in order to make it easier and cheaper to manage
the huge Federal debt created during the War. Eccles called
the low-rate policy an "engine of inflation" and tried hard,
but unsuccessfully, to pull out the pegs.
When Eccles' term was up, Thomas McCabe, president
of Scott Paper Company, was named Chairman of the Board
4

of Governors while Eccles remained as a Board member.
McCabe also wanted to free
the Fed to raise interest rates
and fight inflation. However,
he differed from Eccles in
personality and method. Eccles
was introverted and autocratic, while McCabe was outgoing and flexible — the characteristics of a good salesman.
McCabe reached an Accord
with the Treasury in 1951,
negotiating with a young
under-secretary named William
Thomas McCabe helped to
make monetary policy a viaMcChesney Martin, Jr. The
ble tool again.
Accord freed the Fed to raise
interest rates and restored
monetary policy as a viable economic tool — something it
had not been for 10 years.
Soon after the Accord, McCabe resigned. President
Truman then appointed the Treasury's Martin to chair the
Federal Reserve Board and carry out the policies he had
helped to establish.
Martin was the persuader. He operated by consensus and
often called 10 a.m. meetings of all the Governors where
they decided major issues.
He also returned some power to the Reserve Districts. He
encouraged the Conferences of Reserve Bank Presidents
and Reserve Bank Chairmen and called frequent meetings
of the Federal Advisory Council which Eccles had called "a
statutory nuisance." Perhaps most important, he began
holding meetings of the Federal Open Market Committee
with all Reserve Bank presidents attending and speaking
their piece rather than just those whose turn it was to vote.

Martin's father was the president of the Federal Reserve
Bank of St. Louis, and when
young William graduated from
Yale in 1928, he got a job in
that Bank's examination department. A year later he joined
a brokerage firm as a statistician. He spent the 1930s in
New York working in the stock
061market, eating at the Automat,
studying economics at Columbia, and playing tennis on
William McChesney Martin,
weekends. He was one of the
Jr., steered the Fed through
top amateurs in the area and
the "laid-back" 1950s and the
activist 1960s.
his wife, Cynthia,is the daughter of the donor of the Davis
Cup.
At the age of 31, Martin became the "boy wonder"
president of the New York Stock Exchange. Several years
later, in 1941, he was drafted into the Army as a private,
exchanging his $48,000 annual salary for $21 a month plus
free room and board.
He ran the Fed with quiet dignity and was so respected
that he served under five different Presidents. His adaptability and insight brought the Fed through two entirely
different kinds of decades, the "laid-back" 1950s and the
activist, acrimonious 1960s.
Arthur Burns, whom we might call the scholar, became
Chairman of the Board of Governors in 1970. He spent
many years in teaching and research before coming to the
Fed. When he spoke, his knowledge of economics and his
erudite manner blended with his instinct for politics and
worked to impress Congressmen and colleagues alike.
Burns reorganized the Board more along corporate lines
and he himself operated like a chief executive. Even though
he had only one vote, his self-assurance and forceful

personality made him a powerful
figure.
At FOMC meetings Martin always spoke and voted last. In contrast, Burns frequently opened the
discussion, and when voting started,
he often went first so that the other
members acted with the full knowledge of where the Chairman stood.
During Burns' time in office, the
System adopted a more modern
style of management which brought
a new efficiency and cost consciousness to the Reserve Banks at a time
Arthur Burns moved nimwhen the economy in general, and
bly through political probthe payments mechanism in particu- lems and monetary crises.
lar, were changing rapidly — in
large part due to computers.
Burns was born in Stanislau, Austria, in 1904. He arrived
in the United States at the age of six, just a few years before
Benjamin Strong opened the New York Reserve Bank. He
got his Ph.D.from Columbia and was a lecturer, writer, and
expert in business cycle behavior until he went to Washington
to head the Council of Economic Advisers in the 1950s.
Burns, with his shock of white hair parted in the middle,
and ever-present pipe, became a symbol of monetary
integrity throughout the world just as William McChesney
Martin had been before him. Thus, in 1977 President Carter
faced a difficult decision whether or not to reappoint Burns
to another term as Chairman. If he did so, he would lose a
chance to put in someone more identifiable with his own
Administration. But, if he didn't reappoint the Chairman,
the world might take it as a sign that the U. S. was placing
less emphasis on the fight against inflation.
After many months of deliberation, the President picked

G. William Miller, a lawyer who headed the Textron
conglomerate. He brought a change in style to the job of
Chairman. Traditionally, central bankers seemed to feel
that silence in public was part of their role, and Eccles even
said that it was his duty to talk as little as possible. Miller, in
contrast, was frank and outspoken and gave frequent
interviews.
As this is written, Miller has moved on to become
Secretary of the Treasury, as Carter Glass once did, and
Paul Volcker has been appointed Chairman of the Federal
Reserve Board. He was president of the New York Reserve
Bank and previously held a high position in the Treasury
Department, combining part of the backgrounds of Benjamin
Strong and William McChesney Martin.
We have tried to show that the men who made the Fed
varied considerably in style, personality and philosophy.
What they had in common was dedication and an ability to
sense and work towards the nation's current goals.
0

For additional copies of this pamphlet or for a list of other
available publications, write to
Public Service Department
Federal Reserve Bank of Philadelphia
P. 0. Box 66
Philadelphia, Pennsylvania 19105

Funeral Services
for
Marriner Stoddard Eccles
December 22, 1977

Conducting,
R. H. Burton
Director, First Security Corporation and close friend
allie, the members of her family, members of the Eccles'
family, and friends of Marriner S. Eccles: I am Harold Burton. I feel
honored to be named to announce those who will participate in these
services.
I have been a close friend and associate of Marriner Eccles for
many years. My own father expressed his high esteem for Marriner so
often that I felt I knew Marriner long before I became associated with
him
Over the years I have had an ever-increasing appreciation of the
many qualities and the greatness of this man. Rarely, has an individual
affected the lives of so many people.
In addition to many of Marriner's friends and associates from
out-of-town, and dignitaries here too numerous to mention, I wish also
to acknowledge the presence of Stephen S. Gardner, representing
Arthur F. Burns and the Federal Reserve Board. Mr. Gardner is Vice
Chairman of the Board.
Marriner's grandsons have been designated as pall bearers.
From here on the services will proceed as follows:
The opening prayer will be delivered by President N. Eldon Tanner,
First Presidency of The Church of Jesus Christ of Latter-day
Saints.
Edmund W. Littlefield, who succeeded Marriner as Chairman of
Utah International, will then speak.
Joseph Quinney, Marriner's brother-in-law and life-time friend and
counsel, will speak for the family.
The closing prayer will be offered by Dr. Thomas H. Caine,
Marriner's physician in the final months of his life.
The services will proceed from this point without further
announcements.

Opening Prayer
N. Eldon Tanner
First Presidency, The Church of Jesus Christ of Latter-day Saints
ur Father who art in Heaven. As Thou seest, we have met here
to show our last respects to this great family and to Marriner Eccles,
who has left us. We pray that while we are here we may have Thy
spirit to be with us. Bless those who participate that they may do so as
they wish to do and under Thy direction.
We acknowledge this great man as one who has given great service to his country, to his community, to his associates and friends. And
he has gone to his reward.
Help us to realize, Heavenly Father, that we are continually saying good-bye to those who have left us, or they are saying good-bye to
us as we leave. Help us to understand that this part of our life will be
ended as it has been with our Dear Friend, Marriner. Help us to
prepare for this occasion. Help us to realize and understand that the
Savior, whose birth we celebrate in the next few days, came and gave
his life that we might have immortality and eternal life, and has given
us the plan of life by which we can prepare ourselves for eternal life.
Give us courage and strength and understanding to so live that we
may be worthy of this great blessing.
Let Thy blessing attend this family and those who mourn at this
time. Comfort them, give them solace, and help them to appreciate
the great life that Marriner has lived, the contributions he has made
that have prepared himself for this occasion.
We pray, our Heavenly Father, that Thy blessings may attend us
all, and that those who participate in this meeting may be helpful to
us. Let Thy blessing attend us now and always help us to be worthy.
We humbly pray in the name of Jesus Christ. Amen.

Remarks
Edmund W. Littlefield
Chairman, Utah International, Inc., and long-time business associate
e gather here today for the common purpose of paying our last
respects to an uncommon man — Marriner Stoddard Eccles.
Humble though his beginnings may have been, the crucible in
which his character was formed and the fires that forged it produced
one of the remarkable men of his — or any other — generation. Part
of the structure welded within him was a framework of ethical and
moral values that were his hard truths — accepted, not subject to
debate, dictates of conscience that were governing in all his actions.
Among these was a sense of responsibility, responsibility to his
family, to his friends, and associates, to his nation and most important,
to the community of man. This was the fuel that fed his unrelenting
determination to identify problems, search out the causes, seek the
solutions, fight for their enactment.
Sometimes it seemed to me that Marriner was never allowed to
be young. Circumstances thrust responsibility upon him at an early
age. He was more than equal to the challenge. With skill and hard
work he not only preserved but enhanced the inheritance that was
bequeathed to him and his brothers and sisters. In short order he won
the respect, the confidence, and the acceptance of the older men who
had been his father's associates.
Marriner was not content merely to be a caretaker. He was a
creator as well, an entrepreneur with excellent judgment and a keen
sense of timing. From these qualities was conceived the first multibank holding company in the country, and two little banks in Logan,
Utah, were the seed corn that has grown into the First Security Corporation and the very successful banking system it represents.
Long before he was forty years of age Marriner was already entrenched as a successful business leader — President of Eccles Investment Company, of First Security Corporation, of the First National
Bank, of the First National Bank of Ogden, Eccles Hotel Company,
Sego Milk Products Company, and Stoddard Lumber Company. He was
a Director of Amalgamated Sugar, The Utah Construction Company,
Anderson Lumber, Utah Power & Light, among others. Impressive as
this may have been, these were accomplishments of more tolerant
times when the economy was on the upbeat and prosperity was
abroad in the land.

It was in the hard school of great adversity that the dimensions
of Marriner's greatness began to be revealed. With the coming of the
Great Depression the Nation foundered. One out of every four people
was out of work. Some 9,000 banks failed. The conventional wisdom
was applied as a remedy — and failed. It was indeed a time for
agonizing reappraisal, and Marriner challenged all that he had been
taught to believe in economics and in the causes of and cures for
depressions. He concluded that the nation was pursuing a course that
was making our economic woes worse. He prescribed a different
remedy, a new definition of the role of government and of the private
sector, a course of action that would reverse the direction in which
the economy was plunging. Out of his creative mind emerged concepts and strategies that would prove to be a prime force in combatting the depression and in leading the nation back to economic
recovery. His talents were moved to the larger stage of the Nation's
Capitol and there he was to play a starring role for the next 17 1/2
years.
Now in full view were the very special qualities that set this man
apart from the rest.
One was the relentless search for truth. There was little that Marriner was ready to accept at face value. He was a tortuously slow
reader because he mentally challenged every sentence to see if it were
true before proceeding to the next. The facts had to be true and the
logic flawless before the conclusion could pass muster with Marriner.
Against this constant challenge the frail failed, the sound survived, and
the flawed was reworked and made better.
Another characteristic was the complete independence of his
thinking. He was not afraid to stand alone. If he coveted the praise of
his peers, he would not prostitute himself for it. With relentless logic
he analyzed the facts, weighed the possible solutions, determined the
best course to follow and pursued it with unrelenting determination.
To some this made him seem at times stern and unemotional but this
was not the case. It was his determination to discover and to reveal
the truth and to use this newly discovered knowledge to better the
situation.

With independence of thought was combined wisdom and
foresight in rare degree. Fortunately for me, I learned early in my
association with Marriner that the fact that Marriner thought one way
and all the other people I respected and admired held a different view
did not mean Marriner was wrong. He was consistently ahead of the
rest of us. More often than not, what he was thinking today would
become the popular view some months or even years hence.
We are all the beneficiaries of these exacting standards. From it
he authored the Banking Act of 1935 that placed the Federal Reserve
System on a sounder basis, made it a more effective instrument of
monetary policy, and better able to play its role as the Central Bank.
He was a major force in the creation of the Federal Housing Administration and the widespread home ownership that it made possible. He played a crucial role in the financing of World War II and
foresaw with unmatched clarity the inflationary pressures that were
being built up inevitably to plague the world when again it was at
peace. Marriner helped to restructure the international monetary
system in ways that would facilitate the economic recovery of a world
torn assunder by the ravages of war. Typically he stayed on the
Federal Reserve Board after his term as Chairman had expired to help
defeat an attempt by President Truman and Secretary of Treasury
Snyder to diminish the independence of the Federal Reserve Board.
Only when victory was achieved did he return to private life.
Marriner was without peer in his ability to function effectively in
both the public and the private sectors. One reason was that he knew
his strengths and recognized his weaknesses. He knew that he was ill
equipped to be a chief operating officer where the march of events
demands quick decisions, often without all the facts in hand. For these
talents he looked to others while he kept the enterprise in clear focus
from a more remote perch. In so doing, free from the hurly burly, he
brought to bear those very special qualities of foresight, wisdom, and
experience that he had in such abundance.

For over a quarter of a century I worked closely with him, and I
hold him in the highest esteem and in the greatest affection. He never
asked nor would he have tolerated me to do any act that would have
reflected on his integrity or on mine or on the enterprise we represented.
His logical approach made him seem impersonal to some. Yet he was
a man who cared very deeply for people, for those who worked for
him and for those who worked with him. He was loyal. He was fair.
The duration and the solidity of his friendships and his business
associations are convincing testimony of this.
Even after his return to private life Marriner continued to speak
out on matters of deep public concern. He warned that the explosion
of population, particularly in the underdeveloped countries, was a
millstone that was making it difficult to raise standards of living to
minimum acceptable levels.
Marriner was one of the first, and certainly the best known, to
speak out forcefully against our involvement in Vietnam. He even did
so at a luncheon at the White House when President Johnson and his
cabinet invited the top business leaders to the White House to explain
their escalation of the Vietnam War. Marriner raised the single voice
of dissent, and he continued to criticize whenever he could make his
voice heard. Typically, once more Marriner was out ahead of the pack,
alone, calling for others to follow, and finally vindicated when his
voice was no longer a solo but part of the chorus.
Shakeskpeare once said: "Some men are born to greatness. Some
achieve greatness. Some have greatness thrust upon them." All these
were true of Marriner. The good that he did will live long.

Remarks
S. J. Quinney
Brother-in-law and friend

hose who mourn the death of Marriner S. Eccles will find
comfort in the love they have borne him; in the benefactions he has
bestowed upon them; in their association with him in the days of his
health and vigor.
His vast achievements have touched the lives of millions of his
fellow citizens — more immediately, his philanthropies have been
shared by educational institutions; by the high and the lowly; by the
rich and the poor; by the minorities and the majorities; by the blacks
and the whites. All the descendants of his mother have had and still
have their lives enriched as a result of his courageous business
decisions and sagacious management of the family inheritance.
Much has been said and written concerning his achievements and
the unique intellect with which he was endowed. Let us now turn to
some of the people who directly, but more often indirectly, helped
create the atmosphere in which this great man and his talents
flourished — those who played a supporting role in the drama of the
Marriner Eccles career.
Ellen Eccles, affectionately known as our Bammy, the mother of
the Eccles Clan, moved to Logan, Utah about 1907, at which time I
became acquainted with them. In high school at the Brigham Young
College, Marriner and I were in the Clyde Fitch play, "Girls". He had
the lead, naturally; I supported him. In 1912 he returned from a
mission to Scotland as I embarked on a mission to Germany. Our
paths crossed in New York. In 1914, I returned to Logan. In the
meantime, David Eccles, the illustrious father, had died. Marriner was
absorbed in the settlement and division of the intestate estate his
father had left. Against the advice of most of his trusted friends,
including my own father, but with the loyal support of his wonderful
mother and such of his family as were then of age, and of his
incomparable uncle, Robert Anderson, he courageously elected to
sever his family's share of the estate from that of the first family, and
thereon hangs a tale many, many times repeated.

This brings me to the advent of the good folk to whom I alluded
a moment ago. In 1916, four years after the death of Marriner's father,
the family consisted of Bammy and her nine children, several of whom
were not of legal age. Marriner caused the Eccles Investment
Company to be organized, into which the properties comprising the
estate were transferred. His brothers and sisters of legal age were
directors and as the others became of legal age, they, too, became
directors of this corporation which finally, after many years of
existence, was merged into Utah International, Inc.
All this time, Marriner was the dominating influence in the
family's financial affairs. But he was supported by his brothers and
sisters. Anyone who understands the Eccles temperament will realize
that there were times when differences arose only to be resolved;
when ambitions became apparent only to be appeased by
compromise. There was give and take. III will was put down and good
will was established. There was no fragmentation of the family nor of
the underlying loyalty each felt to the others and to the purposes of
their corporation. Without this family support and loyalty, Marriner's
path would have been strewn with more obstacles than actually
confronted him and with more frustrations than his restless soul could
have endured. As this remarkable group of brothers and sisters stood
steadfastly together, no one overeached the other. Marriner, especially
in the formative years, must have had numerous opportunities to
enrich himself at the expense of the others. Surely he might have
seized opportunities not shared with them. But so far as I am aware,
and I think I am knowledgeable, this honorable man did not do so.
While he enriched himself he enriched his brothers and sisters.
Certainly until the time when the family corporation was dissolved and
its assets were distributed to its stockholders, and Bammy's own
children had established families of their own, Marriner was fiduciary
to his family — to his stockholders; and praise be to him, he
conducted himself as that appellation demands. Were he here today,
he would reciprocate the compliment by saying, All praise to the
family whose early support and confidence smoothed the way to his
ultimate spectacular success.

Not all, though most of his time and energy were devoted to
business and monetary and fiscal policy and governmental affairs. He
did find time to play now and then. He enjoyed golf, though to me, he
made something of a business of it as he kept tab on each member of
the foursome. Betimes, say once or twice a year, he would foregather
with his companions to enjoy an afternoon and evening at Siv
Jeppson's cabin on the south fork of the Ogden River where
horseshoes and other innocuous games were played for a drink-around
and where steaks and potatoes and trout were fried only as Siv could
prepare them. It was there that a friendly game of poker followed,
with good old Larry Clayton strumming his ukelele to tunes and lyrics
not repeatable at this gathering. And on Labor Day, the boys would
hie themselves northward on fishing trips to the Wind Rivers, to
Jackson Hole, or to North Fork of the Snake River and, for three or
four days, repeat the south fork rendezvous, except that Marriner did
not fish. While the rest of us gathered in the provender, he would sit
in the shade and study financial reports which he could recite
verbatim years and years thereafter. Such a memory for figures — I
mean numbers on the printed page.
I am convinced that these mellowing vacations greatly benefitted
Marriner. They gave him perspective. They permitted him to size up
the men who had been entrusted with the management of several of
the enterprises dear to his heart, and they certainly endeared Marriner
all the more to the men who worked with and for him. Marriner took
great pride in these co-workers and others — for example, in his
brother, George Eccles; and in his business associate and protege, Ed
Littlefield; and in Art Benning, the worthy successor of his competent
father, to mention but three names. Men of this sort held things
together; they minded the shop while he was in Washington attending
to the affairs of the nation and after he returned from those lusty
encounters. I am certain Marriner wanted to keep his life and his good
deeds in proper context and perspective. Not that he did not enjoy the
recognition lavished upon him, but he knew that no man walks alone.

My friends, all these things are known to me. I have had the
privilege of sitting in the councils of the Eccles Clan. It was not easy
to arrive, but it did come about. When Jess and I were married,
Marriner and the others, except Bammy, had grave misgivings because,
quoting Marriner, I was too radical. And then in later years he
despaired of me because I was too conservative. Notwithstanding
these derelictions, I think he accepted me and I loved him as my own
true brother.
And then there is Sallie, Marriner's wife. What would he have
done without her? How he admired her! This man, who could be gruff
at times, could be melted by this fine, talented woman who added so
much class to him and their relationship with their wide circle of
friends. Frequently when I would be in his office, he would say, "I just
received a letter from Sallie. Listen to this." And then he would read
an excerpt from her letter, always clever and perceptive, and say,
"Isn't she smart? No one can write like Sallie. Boy, she can see
through everything! They can't pull any wool over her eyes." And so
on and so on. The joy of her letters was a sort of dissipation with him.
These very frequent letters, I do believe, sustained him day after day
when they were apart and the going was really tough for this dear
fellow. She mellowed his life while she added luster to it. No one
could have been more faithful and thoughtful and attentive than was
Sallie to Marriner, as she kept her rendezvous with death — not hers
but his, though she, too, must have died a thousand times as she
observed him gradually and reluctantly sink into oblivion. May she
and may his family be rewarded in some way for the important role
they have played always with Marriner as their leading man.

Closing Prayer
Dr. Thomas H. Caine
Physician
ur Father which art in Heaven, as family and friends we have
gathered here this hour to pay our final respects, with affection and
respect, for the long and productive life of Marriner Stoddard Eccles.
Our sorrow is tempered, Father, by the remarks that we have
heard here from his colleagues and friends. We're thankful for his life
and for the example which he has set for all of us — his strong
personal integrity and self-discipline, great industry, unwaivering
commitment to principle, and timeless service to family, the broad
community in which he walked, this state, and our beloved nation. We
are grateful also for the unique heritage which helped to mold his
unique character in this great western land which he so loved.
At this time, we would ask a special blessing upon his wife,
Sallie, for the sensitivity and tireless attention which was his greatest
comfort in these long months as his energies were frustrated by his
failing body. And we pray for all the members of this family that their
sorrow might also be tempered, and that Thy spirit might be with
them, and that they may enjoy peace and safety throughout the
course of the activities of this day and as they return to their homes.
As we conclude these services, Father, we ask that we might not
leave here without kindling in our own hearts a resolve that we will
use the example which he has set for us in bettering ourselves. And to
extend the influence and success which he has realized by
recognizing, honoring, and protecting the heritage which he so loved
and was so proud of. And also by showing through example in our
own lives those principles which he exposed and demonstrated so
well. Again, we are thankful for the abundant blessings that we all
enjoy, and ask Thee to dismiss us now with Thy blessing in the name
of Jesus Christ, Amen.

Closing Remarks
Mr. Burton
This concludes the services. The family wishes me to convey their
appreciation for the letters of sympathy, beautiful floral offerings, and
other expressions, and also for the numerous people who have come
long distances to attend these services. There will be no funeral
procession.

1
arriner S. Ecc es Fe.era Reserve Board Buildin I!

DEDICATION CEREMONY
Friday, July 29, 1983

Prelude
United States Army Field Band

Welcome
Master of Ceremonies
The Honorable Preston Martin
Vice Chairman, Board of Governors

Address
The Honorable Paul A. Volcker
Chairman, Board of Governors

Music Interlude

Tribute
The Honorable Jake Garn
Chairman, Senate Committee on Banking,
Housing and Urban Affairs

Comments
Spencer F. Eccles
Chairman and President, First Security Corporation and
Director, Federal Reserve Bank of San Francisco

Music
United States Army Field Band

MARRINER S. ECCLES
FEDERAL RESERVE BOARD BUILDING

Our economic progress has been the envy of the world. It has
been built upon the principles of private initiative and enterprise.
I do believe firmly that by monetary means exercised promptly
and courageously we can greatly mitigate the worst evils of
inflation and deflation...One thing is certain: We will not obtain
stability unless we work for it.
I have recommended placing responsibility for the exercise of
these powers in the Federal Reserve Board, which was established
by law to serve the best interest of the nation in banking and
monetary matters...The management of the central bank must be
absolutely free from the dangers of control by politics and
by private interests, singly or combined.

SELECTED QUOTATIONS OF MARR1NER S ECCLES
FEDERAL RESERVE BOARD MEMBER, 1934-1951
CHAIRMAN, 1934-1948

BY ACT OF CONGRESS
OCTOBER 15. 1982

MARRINER S. ECCLES

Marriner S. Eccles, Chairman of the Board of Governors of the Federal
Reserve System from 1934-1948, was born in Logan, Utah, in 1890. During
his long and noteworthy career, he earned a reputation as a leading businessman
and banker, an original economic thinker, and an important decisionmaker.
He dramatically affected the history of the System, and he helped guide U.S.
economic policy during the crucial years of the Great Depression, World War
II, and the postwar period.
In 1928, Mr. Eccles was founder of what is believed to be the first multibank
holding company in the country, First Security Corporation; he was its president until 1934. He managed the banks of the First Security Corporation through
the early years of the Depression so successfully that none of the depositors
lost a penny of their savings.
In 1933, Mr. Eccles testified before the Senate Finance Committee regarding proposals to promote economic recovery, and his stimulating ideas captured the attention of several of the close advisers to President Franklin D.
Roosevelt. As a long-time associate of Mr. Eccles notes, "He came to
Washington with a distinct reputation as a businessman and able banker. Yet
he was something of an anomaly among bankers and businessmen in the 1930s.
He believed in a need for significant changes in the role of government and
the attitudes of businessmen."
While most of the financial community proposed a balanced budget and a
laissez-faire economic policy to stimulate recovery, Mr. Eccles advocated government spending on public works to put Americans back to work and put buying power back in their hands.
Mr. Eccles accepted a call to Washington early in the Roosevelt administration to lend his active and imaginative mind to the task of working the country
out of the Depression. He first assumed the post of Assistant to the Secretary
of the Treasury in January 1934 and was appointed Chairman of the Board
of Governors of the Federal Reserve System in November of that year. He was
the architect of the Banking Act of 1935, which made the Federal Reserve System
a more effective instrument of monetary policy and gave it greater authority
to regulate and supervise commercial banking activities. Believing it necessary
to reduce the costs of home building and standardize home mortgages, Mr.
Eccles drafted legislation that created the Federal Housing Administration. He
also played an important role in helping to establish the Federal Deposit Insurance Corporation.
Although it is not widely known, President Roosevelt came to rely heavily
on Marriner S. Eccles for economic advice. A White House memo dated
December 1935 identified Mr. Eccles as the best voice the administration had
on banking and national monetary affairs. When he was designated Chairman
of the Board of Governors in 1936, Time Magazine, featuring him in a cover
story, said,"A good many people believe that Marriner Eccles is the only thing

that stands between the United States and disaster." In the subsequent years,
while President Roosevelt was rethinking his own ideas on economic policies
he turned to Mr. Eccles as a confidant and strategist. The President reappointed
him as Chairman in 1940 and 1944.
Throughout World War II, Marriner Eccles presided over an expansion of
credit for increased production at home and abroad. After his term as Chairman expired in 1948, he stayed on as a member of the Board until 1951 and
was a key figure in urging steps leading to the famous "Accord" between the
Treasury and the Federal Reserve. Under the terms of the Accord, the Federal
Reserve regained its ability to use monetary policy to combat inflation and was
assured of its independence from the administrative branch of government.
During his years as Chairman of the Federal Reserve Board, Mr. Eccles served
as a member of the Board of Economic Stabilization and was U.S. delegate
to the Bretton Woods Conference, out of which was created the World Bank
and the International Monetary Fund. He was a member of the National Advisory Council on International Monetary and Financial Problems and served
on the Advisory Board of the Export-Import Bank.
In July 1951, after a career that he had fully expected to be "of comparatively
brief duration," he left the Board, noting that it had been seventeen years since
he came to Washington. He cited the succession of events, including "the war
period and the special problems of its aftermath," as contributing to his long
period of public service. He then returned to private life and the family business
in Utah.
Mr. Eccles' experience in banking dated from 1913 when, at age 22, he became
president of the Hyrum (Utah) State Bank. He organized the Eccles Investment Company, a holding company for interests in the family estate, in 1916,
serving as vice president and general manager. During his career, Mr. Eccles
was also president, director, and chairman of several other companies, among
them, the Eccles Hotel Company,the Amalgamated Sugar Company,the Utah
Construction Company, Utah-Idaho Central Railroad, and Utah Power and
Light Company.
Marriner Eccles has been identified with American monetary policy perhaps
more than any figure of his time. He remained a staunch defender of the independence of the Federal Reserve throughout his career. It has been said of
him that, whether in public service or in private enterprise, he displayed a shrewd
realism about the course of the American economy. History has proved his
judgments accurate on many political and economic issues. Mr. Eccles died
in December 1977, in Salt Lake City, Utah, at the age of 87.

HISTORY OF THE BUILDING

On June 19, 1934, the Congress authorized the Federal Reserve to acquire
property and begin construction of a building that would become the new home
of the Board of Governors. Since its organization in 1914, the Federal Reserve
had occupied quarters in the Treasury Building and rented space in privately
owned office buildings.
The architect of the Board building was Dr. Paul Philippe Cret, of
Philadelphia, a Frenchman by birth. When he completed the building it was,
in the estimation of President Franklin D. Roosevelt, one of the "foremost
architectural achievements in the nation's capital."
The Building Committee that the Board established had the assistance of
the Commission of Fine Arts, the National Capital Park and Planning Commission, and the National Park Service. The Commission of Fine Arts, in giving its views as to the general architectural character of the building, said,"The
nature of the functions performed by the Federal Reserve Board dictates an
architectural concept of dignity and permanence."
That concept was brought to the design by Cret. Construction began in
January 1936, and the building was completed in the fall of 1937. On October
20 that year, President Roosevelt dedicated the building in a ceremony attended by Marriner Eccles, who was then Chairman of the Board of Governors,
members of Congress, and others.
Cret also designed the Folger Shakespeare Library and the Pan American
Union building. The Federal Reserve building is thought to be his masterpiece
and, along with those buildings, represents the best of the academic traditions
of the 1930s.
The apparent lack of architectural ornamentation, a hallmark of the classical
style, gives the building its elegance. The window grillwork on the facade is
the work of Samuel Yellin, a Polish immigrant who became known as one of
the greatest artists in wrought iron.
In designing the Board building, Cret selected marble and fixtures for the
interior to harmonize with the classical design. The mosaics on the first and
second floors are made of 28 varieties of marble.
Adolf Miller, who was an economist, and the Board member who headed
the Building Commmittee in 1936, also had a hand in the interior design. Many
of the Greek motifs representing stability and productivity that are evident
throughout the building reflect his affinity for Greek mythology. Marriner Eccles
said of Miller,"His heart and soul are in the Reserve System, and his devotion
reaches even further, to include his guardianship of the building."
With passage of the Garn-St Germain Depository Institutions Act of 1982,
the building was designated the "Marriner S. Eccles Federal Reserve Board
Building."

DEDICATION CEREMONY
Friday, July 29, 1983

Prelude
United States Army Field Band

Welcome
Master of Ceremonies
The Honorable Preston Martin
Vice Chairman, Board of Governors

Address
The Honorable Paul A. Volcker
Chairman, Board of Governors

Music Interlude

Tribute
The Honorable Jake Garn
Chairman, Senate Committee on Banking,
Housing and Urban Affairs

Comments
Spencer F. Eccles
Chairman and President, First Security Corporation and
Director, Federal Reserve Bank of San Francisco

Music
United States Army Field Band

MARRINER S. ECCLES
FEDERAL RESERVE BOARD BUILDING

SELECTED QUOTATIONS OF MARRINER S. ECCLES
FEDERAL RESERVE BOARD MEMBER, 1934-1951
CHAIRMAN, 1934-1948

BY ACT OF CONGRESS
OCTOBER 15. 19112

MARRINER S. ECCLES

I
7=1MW•=?Za-C1MEIiT- V'41E!WMR:Ill filr:1171

1W-

HISTORY OF THE BUILDING

On June 19, 1934, the Congress authorized the Federal Reserve to acquire
property and begin construction of a building that would become the new home
of the Board of Governors. Since its organization in 1914, the Federal Reserve
had occupied quarters in the Treasury Building and rented space in privately
owned office buildings.
The architect of the Board building was Dr. Paul Philippe Cret, of
Philadelphia, a Frenchman by birth. When he completed the building it was,
in the estimation of President Franklin D. Roosevelt, one of the "foremost
architectural achievements in the nation's capital."
The Building Committee that the Board established had the assistance of
the Commission of Fine Arts, the National Capital Park and Planning Commission, and the National Park Service. The Commission of Fine Arts, in giving its views as to the general architectural character of the building, said, "The
nature of the functions performed by the Federal Reserve Board dictates an
architectural concept of dignity and permanence."
That concept was brought to the design by Cret. Construction began in
January 1936, and the building was completed in the fall of 1937. On October
20 that year, President Roosevelt dedicated the building in a ceremony attended by Marriner Eccles, who was then Chairman of the Board of Governors,
members of Congress, and others.
Cret also designed the Folger Shakespeare Library and the Pan American
Union building. The Federal Reserve building is thought to be his masterpiece
and, along with those buildings, represents the best of the academic traditions
of the 1930s.
The apparent lack of architectural ornamentation, a hallmark of the classical
style, gives the building its elegance. The window grillwork on the facade is
the work of Samuel Yellin, a Polish immigrant who became known as one of
the greatest artists in wrought iron.
In designing the Board building, Cret selected marble and fixtures for the
interior to harmonize with the classical design. The mosaics on the first and
second floors are made of 28 varieties of marble.
Adolf Miller, who was an economist, and the Board member who headed
the Building Commmittee in 1936, also had a hand in the interior design. Many
of the Greek motifs representing stability and productivity that are evident
throughout the building reflect his affinity for Greek mythology. Marriner Eccles
said of Miller, "His heart and soul are in the Reserve System, and his devotion
reaches even further, to include his guardianship of the building."
With passage of the Garn-St Germain Depository Institutions Act of 1982,
the building was designated the "Marriner S. Eccles Federal Reserve Board
Building."

DEDICATION CEREMONY
Friday, July 29, 1983

Prelude
United States Army Field Band

Welcome
Master of Ceremonies
The Honorable Preston Martin
Vice Chairman, Board of Governors

Address
The Honorable Paul A. Volcker
Chairman, Board of Governors

Music Interlude

Tribute
The Honorable Jake Garn
Chairman, Senate Committee on Banking,
Housing and Urban Affairs

Comments
Spencer F. Eccles
Chairman and President, First Security Corporation and
Director, Federal Reserve Bank of San Francisco

Music
United States Army Field Band

MARRINER S. ECCLES
FEDERAL RESERVE BOARD BUILDING

Our economic progress has been the envy of the world. It has
been built upon the principles of private initiative and enterprise.
I do believe firmly that by monetary means exercised promptly
and courageously we can greatly mitigate the worst evils of
inflation and deflation. . .0ne thing is certain: We will not obtain
stability unless we work for it.
I have recommended placing responsibility for the exercise of
these powers in the Federal Reserve Board, which was established
by law to serve the best interest of the nation in banking and
monetary matters.. .The management of the central bank must be
absolutely free from the dangers of control by politics and
by private interests, singly or combined.

SELECTED QUOTATIONS OF MARRINER S. ECCLES
FEDERAL RESERVE BOARD MEMBER, 1934-1951
CHAIRMAN, 1934-1948

BY ACT OF CONGRESS
OCTOBER IS. 19112

MARRINER S. ECCLES

•IF

••11■-

HISTORY OF THE BUILDING

On June 19, 1934, the Congress authorized the Federal Reserve to acquire
property and begin construction of a building that would become the new home
of the Board of Governors. Since its organization in 1914, the Federal Reserve
had occupied quarters in the Treasury Building and rented space in privately
owned office buildings.
The architect of the Board building was Dr. Paul Philippe Cret, of
Philadelphia, a Frenchman by birth. When he completed the building it was,
in the estimation of President Franklin D. Roosevelt, one of the "foremost
architectural achievements in the nation's capital."
The Building Committee that the Board established had the assistance of
the Commission of Fine Arts, the National Capital Park and Planning Commission, and the National Park Service. The Commission of Fine Arts, in giving its views as to the general architectural character of the building, said, "The
nature of the functions performed by the Federal Reserve Board dictates an
architectural concept of dignity and permanence."
That concept was brought to the design by Cret. Construction began in
January 1936, and the building was completed in the fall of 1937. On October
20 that year, President Roosevelt dedicated the building in a ceremony attended by Marriner Eccles, who was then Chairman of the Board of Governors,
members of Congress, and others.
Cret also designed the Folger Shakespeare Library and the Pan American
Union building. The Federal Reserve building is thought to be his masterpiece
and, along with those buildings, represents the best of the academic traditions
of the 1930s.
The apparent lack of architectural ornamentation, a hallmark of the classical
style, gives the building its elegance. The window grillwork on the facade is
the work of Samuel Yellin, a Polish immigrant who became known as one of
the greatest artists in wrought iron.
In designing the Board building, Cret selected marble and fixtures for the
interior to harmonize with the classical design. The mosaics on the first and
second floors are made of 28 varieties of marble.
Adolf Miller, who was an economist, and the Board member who headed
the Building Commmittee in 1936, also had a hand in the interior design. Many
of the Greek motifs representing stability and productivity that are evident
throughout the building reflect his affinity for Greek mythology. Marriner Eccles
said of Miller,"His heart and soul are in the Reserve System, and his devotion
reaches even further, to include his guardianship of the building."
With passage of the Garn-St Germain Depository Institutions Act of 1982,
the building was designated the "Marriner S. Eccles Federal Reserve Board
Building."

I arriner S. Eccles Feseral Reserve Board Buildin

DEDICATION CEREMONY
Friday, July 29, 1983

Prelude
United States Army Field Band

Welcome
Master of Ceremonies
The Honorable Preston Martin
Vice Chairman, Board of Governors

Address
The Honorable Paul A. Volcker
Chairman, Board of Governors

Music Interlude

Tribute
The Honorable Jake Garn
Chairman, Senate Committee on Banking,
Housing and Urban Affairs

Comments
Spencer F. Eccles
Chairman and President, First Security Corporation and
Director, Federal Reserve Bank of San Francisco

Music
United States Army Field Band

MARRINER S. ECCLES
FEDERAL RESERVE BOARD BUILDING

SELECTED QUOTATIONS OF MARR1NER S. ECCLES
FEDERAL RESERVE BOARD MEMBER, 1934-1951
CHAIRMAN. 1934-1948

BY ACT OF CONGRESS
OCTOBER 15. 1912

MARRINER S. ECCLES

that stands between the United States and disaster." In the subsequent years,
while President Roosevelt was rethinking his own ideas on economic policies
he turned to Mr. Eccles as a confidant and strategist. The President reappointed
him as Chairman in 1940 and 1944.
Throughout World War II, Marriner Eccles presided over an expansion of
credit for increased production at home and abroad. After his term as Chairman expired in 1948, he stayed on as a member of the Board until 1951 and
was a key figure in urging steps leading to the famous "Accord" between the
Treasury and the Federal Reserve. Under the terms of the Accord, the Federal
Reserve regained its ability to use monetary policy to combat inflation and was
assured of its independence from the administrative branch of government.
During his years as Chairman of the Federal Reserve Board, Mr. Eccles served
as a member of the Board of Economic Stabilization and was U.S. delegate
to the Bretton Woods Conference, out of which was created the World Bank
and the International Monetary Fund. He was a member of the National Advisory Council on International Monetary and Financial Problems and served
on the Advisory Board of the Export-Import Bank.
In July 1951, after a career that he had fully expected to be "of comparatively
brief duration," he left the Board, noting that it had been seventeen years since
he came to Washington. He cited the succession of events, including "the war
period and the special problems of its aftermath," as contributing to his long
period of public service. He then returned to private life and the family business
in Utah.
Mr. Eccles' experience in banking dated from 1913 when, at age 22, he became
president of the Hyrum (Utah) State Bank. He organized the Eccles Investment Company, a holding company for interests in the family estate, in 1916,
serving as vice president and general manager. During his career, Mr. Eccles
was also president, director, and chairman of several other companies, among
them, the Eccles Hotel Company, the Amalgamated Sugar Company,the Utah
Construction Company, Utah-Idaho Central Railroad, and Utah Power and
Light Company.
Marriner Eccles has been identified with American monetary policy perhaps
more than any figure of his time. He remained a staunch defender of the independence of the Federal Reserve throughout his career. It has been said of
him that, whether in public service or in private enterprise, he displayed a shrewd
realism about the course of the American economy. History has proved his
judgments accurate on many political and economic issues. Mr. Eccles died
in December 1977, in Salt Lake City, Utah, at the age of 87.

HISTORY OF THE BUILDING

On June 19, 1934, the Congress authorized the Federal Reserve to acquire
property and begin construction of a building that would become the new home
of the Board of Governors. Since its organization in 1914, the Federal Reserve
had occupied quarters in the Treasury Building and rented space in privately
owned office buildings.
The architect of the Board building was Dr. Paul Philippe Cret, of
Philadelphia, a Frenchman by birth. When he completed the building it was,
in the estimation of President Franklin D. Roosevelt, one of the "foremost
architectural achievements in the nation's capital."
The Building Committee that the Board established had the assistance of
the Commission of Fine Arts, the National Capital Park and Planning Commission, and the National Park Service. The Commission of Fine Arts, in giving its views as to the general architectural character of the building, said, "The
nature of the functions performed by the Federal Reserve Board dictates an
architectural concept of dignity and permanence."
That concept was brought to the design by Cret. Construction began in
January 1936, and the building was completed in the fall of 1937. On October
20 that year, President Roosevelt dedicated the building in a ceremony attended by Marriner Eccles, who was then Chairman of the Board of Governors,
members of Congress, and others.
Cret also designed the Folger Shakespeare Library and the Pan American
Union building. The Federal Reserve building is thought to be his masterpiece
and, along with those buildings, represents the best of the academic traditions
of the 1930s.
The apparent lack of architectural ornamentation, a hallmark of the classical
style, gives the building its elegance. The window grillwork on the facade is
the work of Samuel Yellin, a Polish immigrant who became known as one of
the greatest artists in wrought iron.
In designing the Board building, Cret selected marble and fixtures for the
interior to harmonize with the classical design. The mosaics on the first and
second floors are made of 28 varieties of marble.
Adolf Miller, who was an economist, and the Board member who headed
the Building Commmittee in 1936, also had a hand in the interior design. Many
of the Greek motifs representing stability and productivity that are evident
throughout the building reflect his affinity for Greek mythology. Marriner Eccles
said of Miller,"His heart and soul are in the Reserve System, and his devotion
reaches even further, to include his guardianship of the building."
With passage of the Garn-St Germain Depository Institutions Act of 1982,
the building was designated the "Marriner S. Eccles Federal Reserve Board
Building."

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SALLIE ECCLES

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First Mrs. Eccles, Mrs. Steele, Mr. John Eccles, Mr. Spencer Eccles,

grandchildren and grandnieces and in-laws of Marriner Eccles --

we are delighted to have you all here on this special occasion.
144 14"611C/CtiriN

Senator Garn -- to whom we owe the idea and serves as

our chief overseer as Chairman of the Senate Banking Committee.
Ckthigage4
Members of the House Banking Committee;Governors and

ex-Governors, Members of the Administration and our sister agencies,

staff and friends,
e yirrld
Welcome to you all.

Marriner Eccles was an extraordinary man of many dimensions,

personal, business, and as a public official.

It is, of course,

in the latter guise for. which we particularly honor his memory today.

I hope you will permit me a moment of personal reminiscence --

I may be the only Federal Reserve official in active service who

had at least a small personal acquaintance with the man.

I didn't cut my eyeteeth on the Federal Reserve -- but

I did write a thesis on Federal Reserve policy in college --

and to a oa49.

student, Marriner was the Fed in those days.

After all, he had been Chairman practically all my life.

his memoirs "Beckoning Frontiers", a little later.

I read

-2--

And in the late 1950's, I came to know him personally -- to

sit at his feet, so to speak -- when he was a member of the

Commission on Money and Credit, and I was a staff appendage.

He was, quite naturally, a leading member of the

Commission -- he was never one to hide his views.

And I

learned then, too, -- perhaps his family can confirm it --

that he was an assiduous practitioner of the old maxim that

"repetition is the mother of learning."

Every member of that

Commission had indelibly imprinted on his memory that the

discount rate, open market operations, and reserve requirements

were indispensable, interrelated tools of monetary policy that

were not to be tampered with by the recommendations of any mere

Commission.

So, Senator Garn, when I testify before your

Committee that we do need reserve requirements, I can tell you

I learned it not only from a master, but from one of Utah's

most famous sons!

Marriner had gone to Washington some 25 years before I

met him -- a banker and businessman with fresh and strong views

-3--

about how to deal with depression.

Among other things he could

be said to have found some of Keynes theories before Keynes --

his lesson was that deficits are not always a bad thing.

Sometimes I think we learned that lesson too well!

But Marriner, himself, of course applied his lessons

symmetrically.

After the war he fully recognized that we were

in a new era and that inflation had become the main threat.

turned his energies to dealing with it.

He left his mark on Washington and the country in its

institutions as well as its polcies.

As a young man in the

Treasury, he was a driving force behind the creation of the

FHA and the FDIC.

And then, when he became Federal Reserve

Chairman, he turned to reform of the banking system and the

Federal Reserve itself.

The Banking Act of 1935 stands as his

legislative monument -- dedicated to the basic proposition that

the Fed would be independent of both politics and private interests.

During World War II, Federal Reserve policy was frozen --

and interest rates were frozen in a fixed pattern -- to support

the war effort.
jacket

But that agreed wartime policy became a straight-

after the war was over, when the inflationary threat appeared.

-4-

I'm sure Marriner felt the cherished independence of

the Fed was being compromised in his efforts to change policy, and

his last years with the System were devoted to fighting the battle

to end the "pegs" on interest rates -- including staying as Governor

after his term as Chairman expired without reappointment.

The famous accord -- when monetary policy attained its

needed flexibility -- was as much his achievement -- alongside

Bill Martin's -- as anyone's.

In thinking about this occasion, I read President Roosevelt's

remarks in his dedication of the building -- some of his words are

relevant today.

The banking system must be constantly alert to

changing conditions in order that it may be

prepared to adapt itself to the needs of our people.

The important powers of monetary policy are a

public concern, and they must be vested in a public

body.

But monetary powers possess no peculiar magic.

They are not omnipotent.

They must be coordinated with

the other major powers of the Government.

-5-

And he said, rightly, the structure of this building

ranks among the foremost of the Capital's architectural achievements.

Marriner Eccles, in eulogizing a colleague at the Board said:

"His heart and soul are in the reserve system, and his devotion

went even further to include his guardianship of this building."

Those same words are a fitting tribute to Marriner.

A visitor yesterday reminded me that not everything these

days depends on a building.

Taxi driver story.

had a building,

"Oh, I didn't know the Federal Reserve

I thought it was just on television."

Well, Sidney Hyman's biography of Marriner makes clear

the importance of the building in Marriner's thinking.

Joint Chiefs of Staff

"Once in Rockville, always in Rockville."

He defeated the combined forces of the Chiefs of Staff

in the midst of war.

What could be more fitting than that the building now

assume Marriner's own name.

-6-

His own words set in bronze and unveiled here today

on this memorial are the best testimony to his economic

philosophy and are the essence of the beliefs that he sounded

throughout his career at the Board.

They read:

"Our economic progress has been the envy of the world.

It has been built upon the principles of private inative and

enterprise.

I do believe firmly that, by monetary means exercised

promptly and courageously, we can greatly mitigate the worst

evils of inflation and deflation .

. one thing is certain:

we will not obtain stability unless we work for it.

I have recommended placing responsibility for the

exercise of these powers in the Federal Reserve Board, which

was established by law to serve the best interest of the nation

in banking and monetary matters .

the management of the
• .

central bank must be absolutely free from the dangers of control

by politics and by private interests, singly or combined."

-7-

His guardianship of those beliefs, of the Federal

Reserve itself, and this building is symbolized by our re-

dedication here today of the Marriner S. Eccles Federal Reserve

Board Building.

We appreciate the presence of all of you in

joining us today.

utAii

/4,t

O'r

s, Mr. Spencer Eccles,
First Mrs. Eccles, Mrs. Steele, Mr. John Eccle
Marriner Eccles -grandchildren and grandnieces and in-laws of
special occasion.
we are delighted to have you all here on this
, tt,
Senator Garn

to whom we owe the idea and serves as

Banking Committee.
our chief overseer as Chairman of the Senate
"
_Members

••

Of the-Housel/LE7Tittee,.Governors and

and our sister agencies,
ex-Governors, Members of the Administration

staff and friends,

Welcome to you all.
many dimensions,
Marriner Eccles was an extraordinary man of
personal, business, and as a public official.

It is, of course,

his memory today.
in the latter guise fax-which we particularly honor
reminiscence -I hope you will permit me a moment of personal
e service who
I may be the only Federal Reserve official in activ
the man.
had at least a small personal acquaintance with
ve -- but
I didn't cut my eyeteeth on the Federal Reser
y in college -I did write a thesis on Federal Reserve polic
Fed in those days.
and to a 0-a--61_ student, Marriner was the
y all my life.
After all, he had been Chairman practicall
.
his memoirs "Beckoning Frontiers" a little later

I read

-2-

personally -- to
And in the late 1950's, I came to know him
a member of the
sit at his feet, so to speak -- when he was
a staff appendage.
Commission on Money and Credit, and I was
the
He was, quite naturally, a leading member of
s.
Commission -- he was never one to hide his view

And I

can confirm it -learned then, too, -- perhaps his family
the old maxim that
that he was an assiduous practitioner of
"repetition is the mother of learning."

Every member of that

memory that the
Commission had indelibly imprinted on his
reserve requirements
discount rate, open market operations, and
tary policy that
were indispensable, interrelated tools of mone
dations of any mere
were not to be tampered with by the recommen

Commission.

your
So, Senator Garn, when I testify before

irements, I can tell you
Committee that we do need reserve requ
from one of Utah's
I learned it not only from a master, but

most famous sons!
25 years before I
Marriner had gone to Washington some
with fresh and strong views
met him -- a banker and businessman

-3-

about how to deal with depression.

Among other things he could

theories before Keynes -be said to have found some of Keynes
always a bad thing.
his lesson was that deficits are not
on too well!
Sometimes I think we learned that less
his lessons
But Marriner, himself, of course applied

symmetrically.

we were
After the war he fully recognized that

become the main threat.
in a new era and that inflation had

turned his energies to dealing with it.
country in its
He left his mark on Washington and the
institutions as well as its polcies.

As a young man in the

the creation of the
Treasury, he was a driving force behind
FHA and the FDIC.

And then, when he became Federal Reserve

banking system and the
Chailman, he turned to reform of the
Federal Reserve itself.

The Banking Act of 1935 stands as his

the basic proposition that
legislative monument -- dedicated to
politics and private interests.
the Fed would be independent of both
policy was frozen -During World War II, Federal Reserve
fixed pattern -- to support
and interest rates were frozen in a

the war effort.

jacket

me a straightBut that agreed wartime policy beca

ationary threat appeared.
after the war was over, when the infl

-4endence of
I'm sure Marriner felt the cherished indep
change policy, and
the Fed was being compromised in his efforts to
fighting the battle
his last years with the System were devoted to
staying as Governor
to end the "pegs" on interest rates -- including
ointment.
after his term as Chairman expired without reapp
its
The famous accord -- when monetary policy attained
alongside
needed flexibility -- was as much his achievement -Bill Martin's -- as anyone's.
Roosevelt's
In thinking about this occasion, I read President
his words are
remarks in his dedication of the building -- some of

relevant today.

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

The banking system must be constantly alert to
changing conditions in order that it may be
prepared to adapt itself to the needs of our people.

The important powers of monetary policy are a
c
public concern, and they must be vested in a publi

body.

But monetary powers possess no peculiar magic.

They are not omnipotent.

They must be coordinated with

the other major powers of the Government.

-5this building
And he said, rightly, the structure of
s architectural achievements.
ranks among the foremost of the Capital'
e at the Board said:
Marriner Eccles, in eulogizing a colleagu
system, and his devotion
"His heart and soul are in the reserve
ship of this building."
went even further to include his guardian
Marriner.
Those same words are a fitting tribute to
everything these
A visitor yesterday reminded me that not

days depends on a building.
Taxi driver story,

had a building.

"Oh, I didn't know the Federal Reserve

I thought it was just on television."

makes clear
Well, Sidney Hyman's biography of Marriner
's thinking.
the importance of the building in Marriner
Joint Chiefs of Staff
e."
"Once in Rockville, always in Rockvill
Chiefs of Staff
He defeated the combined forces of the

in the midst of war.
that the building now
What could be more fitting than

assume Marriner's own name.

-6today
His own words set in bronze and unveiled here
his economic
on this memorial are the best testimony to
he sounded
philosophy and are the essence of the beliefs that
throughout his career at the Board.

They read:

world.
"Our economic progress has been the envy of the
te initiative and
It has been built upon the principles of priva

enterprise.
ised
I do believe firmly that, by monetary means exerc
ate the worst
promptly and courageously, we can greatly mitig
evils of inflation and deflation .

. one thing is certain:

we will not obtain stability unless we work for it.
I have recommended placing responsibility for the
, which
exercise of these powers in the Federal Reserve Board
of the nation
was established by law to serve the best interest
in banking and monetary matters .

the management of the

rs of control
central bank must be absolutely free from the dange
ned."
by politics and by private interests, singly or combi

-7Federal
His guardianship of those beliefs, of the
lized by our reReserve itself, and this building is symbo
s Federal Reserve
dedication here today of the Marriner S. Eccle

Board Building.

We appreciate the presence of all of you in

joining us today.

td,OLI

Eccles, Mr. Spencer Eccles,
First Mrs. Eccles, Mrs. Steele, Mr. John
of Marriner Eccles -grandchildren and grandnieces and in-laws
this special occasion.
we are delighted to have you all here on
441-1v
4-

Senator Garn

.serves as
to whom we owe the idea and h,

te Banking Committee.
our chief overseer as Chairman of the Sena
-1,e d
a!,/:•4 /
rnors and
MernberSo! The House Banking Committee,. Gove
on and our sister agencies,
ex-Governors, Members of the Administrati

staff and friends,
Welcome to you all.
many dimensions,
Marriner Eccles was an extraordinary man of
.
personal, business, and as a public official

It is, of course,

honor his memory today.
in the latter guise far-which we particularly
reminiscence -I hope you will permit me a moment of personal
ve service who
I may be the only Federal Reserve official in acti
the man.
had at least a small personal acquaintance with
rve -- but
I didn't cut my eyeteeth on the Federal Rese
cy in college -I did write a thesis on Federal Reserve poli

and to a oa-Is

student, Marriner was the Fed in those days.

lly all my life.
After all, he had been Chairman practica
le later.
his memoirs "Beckoning Frontiers" a litt

I read

-2-

onally -- to
And in the late 1950's, I came to know him pers
a member of the
sit at his feet, so to speak -- when he was
a staff appendage.
Commission on Money and Credit, and I was
the
He was, quite naturally, a leading member of
views.
Commission -- he was never one to hide his

And I

can confirm it -learned then, too, -- perhaps his family
the old maxim that
that he was an assiduous practitioner of
"repetition is the mother of learning."

Every member of that

memory that the
Commission had indelibly imprinted on his
and reserve requirements
discount rate, open market operations,
monetary policy that
were indispensable, interrelated tools of
mmendations of any mere
were not to be tampered with by the reco

Commission.

your
So, Senator Garn, when I testify before

irements, I can tell you
Committee that we do need reserve requ
but from one of Utah's
I learned it not only from a master,
most famous sons!
years before I
Marriner had gone to Washington some 25
fresh and strong views
met him -- a banker and businessman with

-3-

about how to deal with depression.

Among other things he could

symmetrically.

we were
After the war he fully recognized that

me the main threat.
in a new era and that inflation had beco

turned his energies to dealing with it.
try in its
He left his mark on Washington and the coun
institutions as well as its polcies.

As a young man in the

the creation of the
Treasury, he was a driving force behind
FHA and the FDIC.

rve
And then, when he became Federal Rese

ing system and the
Chairman, he turned to refolm of the bank
Federal Reserve itself.

The Banking Act of 1935 stands as his

basic proposition that
legislative monument -- dedicated to the
politics and private interests.
the Fed would be independent of both
policy was frozen -During World War II, Federal Reserve
d pattern -- to support
and interest rates were frozen in a fixe

the war effort.

jacket

became a straightBut that agreed wartime policy

inflationary threat appeared.
after the war was over, when the

-4independence of
I'm sure Marriner felt the cherished
rts to change policy, and
the Fed was being compromised in his effo
ted to fighting the battle
his last years with the System were devo
including staying as Governor
to end the "pegs" on interest rates -out reappointment.
after his term as Chairman expired with
attained its
The famous accord -- when monetary policy
ent -- alongside
needed flexibility -- was as much his achievem
Bill Martin's -- as anyone's.
ident Roosevelt's
In thinking about this occasion, I read Pres
-- some of his words are
remarks in his dedication of the building

relevant today.

alert to
The banking system must be constantly
be
changing conditions in order that it may
people.
prepared to adapt itself to the needs of our

are a
The important powers of monetary policy
in a public
public concern, and they must be vested

body.

magic.
But monetary powers possess no peculiar

They are not omnipotent.

They must be coordinated with

the other major powers of the Government.

-5of this building
And he said, rightly, the structure
tal's architectural achievements.
ranks among the foremost of the Capi
eague at the Board said:
Marriner Eccles, in eulogizing a coll
rve system, and his devotion
"His heart and soul are in the rese
dianship of this building."
went even further to include his guar
to Marriner.
Those same words are a fitting tribute
everything these
A visitor yesterday reminded me that not
days depends on a building.
Taxi driver story.

had a building.

rve
"Oh, I didn't know the Federal Rese

I thought it was just on television."

iner makes clear
Well, Sidney Hyman's biography of Marr
's thinking.
the importance of the building in Marriner
Joint Chiefs of Staff
"Once in Rockville, always in Rockville."
Chiefs of Staff
He defeated the combined forces of the

in the midst of war.
the building now
What could be more fitting than that

assume Marriner's own name.

-6here today
His own words set in bronze and unveiled
y to his economic
on this memorial are the best testimon
beliefs that he sounded
philosophy and are the essence of the
throughout his career at the Board.

They read:

envy of the world.
"Our economic progress has been the
of private initiative and
It has been built upon the principles

enterprise.
s exercised
I do believe firmly that, by monetary mean
mitigate the worst
promptly and courageously, we can greatly
evils of inflation and deflation .

one thing is certain:

work for it.
we will not obtain stability unless we
ty for the
I have recommended placing responsibili
Reserve Board, which
exercise of these powers in the Federal
interest of the nation
was established by law to serve the best
in banking and monetary matters .

. the management of the

from the dangers of control
central bank must be absolutely free
singly or combined."
by politics and by private interests,

-7-

al
His guardianship of those beliefs, of the Feder
our reReserve itself, and this building is symbolized by
al Reserve
dedication here today of the Marriner S. Eccles Feder

Board Building.

We appreciate the presence of all of you in

joining us today.

July 27, 1983
Immediate Family of Marriner S. Eccles attending Eccles Dedication
The special guests of honor:
- Mrs. Sallie Eccles (Marriner's wife)
Mrs. Elenore Steele (Marriner Eccles' daughter) and
Mr. Harold Steele (son-in-law)
(former President, First Security Bank of Utah)
Mr. John D. Eccles (Marriner's son) and
Mrs. Vera Eccles (John's wifer
David (John's son)
Sarah (John's daughter)
- Mr. Spencer Eccles (nephew and CEO to the First Security
Corporation) and family
Mrs. Cleone Eccles (Spencer's wife)
Miss Hope Eccles (Spencer's daughter)
Miss Lisa Eccles (Spencer's daughter)
Miss Katie Eccles (Spencer's daughter)
Mr. Spencer Eccles (Spencer's son)
- Mrs. Delores (Lollie) Eccles (Marriner's sister-in-law by brother George)
(George headed First Security Corporation) She is legally blind.

Mrs. Barbara Johnson (Assistant to Mrs. Delores Eccles)

July 29, 1983
Time Schedule for Dedication Ceremony
1:55 pm

Board car with Michael Whitehouse leaves for Madison
Hotel to pick up Mrs. Sallie Eccles.

2:00 pm

Two Board cars leave for The Capital Hilton Hotel to
pick up Spencer Eccles family.

2:30 pm

Mrs. Sallie Eccles due to arrive in Board garage.
Mr. Whitehouse will introduce her to Mr. Cremona,
who will escort her to the Oval Reception Room.

2:40 pm

Mr. Spencer Eccles and family due to arrive in Board
garage.

Mr. Whitehouse will greet the family and ac-

company them to the Oval Reception Room.
2:42 pm

Mrs. Sallie Eccles and Mr. Spencer Eccles and family
escorted to Chairman's office by Messrs. Cremona
and Whitehouse.

2:30
2:45 Pm

Senators, Representatives, Mr. McChesney Martin, former
Board Members, and heads of Agencies escorted to Board
Room or Chairman's office, as appropriate.

Board

Members and spouses should be available to gather in
the Board Room to greet distinguished guests.
2:30 3:00 pm

U.S. Army Field Band plays incidental music.

2:50 pm

All guests in the Board Room proceed to reserved seating at the ceremony site.

2:56 pm

Chairman Volcker and guests escorted to ceremony site
by Messrs. Cremona and Whitehouse.

3:00 pm

(Or as soon as everyone is situated)

Mr. Cremona signals

the band conductor to commence playing the National
Anthem.

This begins the official ceremony.

3:03 pm

Master of Ceremonies, Vice Chairman Martin begins the
program.and introduces Chairman Volcker.

3:05 pm

Chairman Volcker delivers address.

3:10 pm

Immediately following the Chairman's address, Mr.
Cremona signals the band conductor to commence the
music interlude ("America the Beautiful" with narration).

3:13 pm

Vice Chairman Martin introduces Senator Garn.

3:15 pm

Senator Garn delivers Tribute.

3:22 pm

Vice Chairman Martin introduces Spencer Eccles.

3:24 pm

Spencer Eccles offers his Comments.

3:28 pm

Vice Chairman Martin concludes the ceremony by inviting
special guests to the Board Room for a reception and

Board staff to a simultaneous reception in Dining
Vice Chairman Martin presents mementos to Mrs.
Room E.
Sallie Eccles, Senator Garn, and Mr. Spencer Eccles.
3:30 pm

At the conclusion of Vice Chairman Martin's comments,
Mr. Cremona will signal the band conductor to commence the closing march ("Stars and Stripes Forever").

3:34 Pm

Band plays incidental music while guests disperse to
respective receptions.

5:00 pm

Program concludes.

•

October 23, 1981
Frederick H. Schultz

The attached memorandum was
given to a friend of mine by
Marriner Eccles about 15 years
ago. Mr. Eccles said that it was
prepared for the President in
response to a conversation which
they had had concerning the weaknesses of the Federal Reserve
System. It was accepted by
President Roosevelt and served
as the basis for the Banking Act
of 1935.

Attachment

.• .•
. 4.
. ,
1

-A,

I • IA
NC.

\ i'\

\\I\

.4.
%

I •4

Memo given to President 11/3/36

DESTIUSLE CHANGES IN TM:: ADMINISTRATION
OF,THE FiZi.RAL ItEaliVE SYSTEM.

• ..
#
" • B22.21111_01* rnr...^tar7 n7.71%
.s°7.ont to ..ns_1225.s
,
Fluctuations
production,
employment and the national income are determined by changes
in
in the available supply of cash and deposit'currency, and by the rate and
character of monetary expenditures. The effect of an increased rate of
spcndin
y be modified by decreasing the supply of money, and intensified
by -increasing the supply of money. Experience shows that without conscious
control, the supply of money tends to expand when the rate of spending increases and tends to contract then the rate of spendinz declines. Thus,
during the depression the supply of money instead of expanding to moderate
the effect of decreased rates of spending, contracted, and so intensified
the depression. This is one part of the -economy in which au.omatic adjustments tend to have an intensifying rather than a moderating effect. If the
monetary mechanism is to be used as an instrument for the promotion of business stability conscious control and management are essential.
nt.
2.
ntr
At the present time
in •
reliance must be placed upon increased governmental and private expenditures
to bring about a rise in the national income. The most important role of
monetary control at the moment is assuring that adequate support is available vhenever needed for the emergency financing involved in the recovery
program.
5. Eple_orianet?.ry cortrbl in the rutrre., Two supremely important duties
are likely to devolve upon the reserve administration in the near future.
The first is assuring that a recovery does not result in an undesirable inflation. The second is assuring that a recovery is not followed by a depression.
the
4. ,ThWIrt-L1.1e
1 1rie
z±i
1"
In order to endeavor, with soma prospects of success, (a) to renier prompt
support for the emergency financing in case of need, (b) to prevent the
recovery from getting out of hand, and (c) to prevent the recurrence of
disastrous depressions in the future, it is, in my opinion, essential that
the authority of the Federal Reserve Board should be strengthened in the
folloving tays:
1. Complete control over the timing, character and volume
of open market purchases and sales of bills and securities by the
reserve banks should be conferred upon the Federal Reserve Board.
2. - Governors of the individual Federal ileserve Banks should
be appointed annually by their Boards of Directors subject to the
approval of the Federal Reserve Board.
5. lalcs=a2.z....z-2-raztIrz
Although the Beard is nomLnally the suprene monetary authority in this
country it is generally conceded that in the at it has not played an effective role, and that the system has been generally dominated by tke Gevernors of the Federal Reserve Banl:s. As a consequence, the Board has not
commanded the respect and prestige to uhich its position would apparently

entitle it, nor has membershiD on the Board been
as hirhly desired as it
should be to attract the necessary talent.
The great disrity in salaries has also contributed to this condition. This
has led to the unfortunate result that banl:er interest, as represented
by the individual Reserve
Bank Governors, has prevailed over the public
interest, as represented by
the Board.
• The relatively minor role pl7ed by the Boar
d can, in q7 opinion, be
attributed to its lack of authority to init
intr open-rarket policy, and to
the com731cte independence of the Reserve Bank
Governors.
G. Ozon rn.r!:et onr7,tiors. Far and away the
most important instrumnt of
reserve policy is the Do:.er to buy and sell
securities in the open rarket.
In this ray reserves, on e.7hich de7osits are base
d, may be given to or tal:en
amly from me=ber banks. It is not too much
to say that who possesses this
p=er controls the banking system, and, in
large measure, the supply of
money.

In the present administrative nrgani:ation the powe
r to initiate open
narket policy rests tith the reserve banks.
The Federal Reserve Bor.rd
possesses only the pc:7er to approve or disa
=rove. Thus, the effective
power over money rests rith the individual rese
rve banks and not .- Tith the
Board. Ecmever much the Board may desire an ener
cetic buying or selling
policy it is po7erless to initiate such a poljcy.
On the other hand, the
reserve banks' ability to carry out the poli
cy is dependent on the Board.
It should be noted that the Ear2: .t.ct cf 1 933 effected
no real ch=ze in this
respect. Frem 19E0 to 19E3 the Open ::arket Poli
cy Committee as col-nosed
of the trelve Federal Reserve Bank Governors.
At present the Federal Cr.en
Varket Coaaittee is likewise cemposed of the twel
ve Governors and hence is .
dominated by the same men rho rere responsible
for the policy followed dur.
inz the depression. The Governors) by the very
nature of their appointLents, duties and associations, cannot help but
be profoundly influenced
by a narrow bankins rather than a broad social
point of view.
There Is no reason to sunpo3e that this administrati
ve organization
rhich functione.d so 1:adly in tile past, rill func
ticn any better in tl:e future.
The diffusion of zorer and responsibility, the root
cause of the trouble,
rem:71as. Over one hundred individuals are responsi
ble, in various deExces,
for -Le formulation of policy. Obviously the more peop
le there are who
share the resconsibility, the less keenly any one
of them rill feel any
personal reszonsibility for the policies adopted.
It is therefore almost
inevitable t!'..7.t such a loosely knit and crT.:berso
me body as the Federal Reserve 1:dministration should be charactenised by
inertia and indecisive
action Eencrally.
rcover, a cc72picte st:_lt: ate resultin: from a cli.a
TreeLent of the reserve ban::s and the Board is clays
possible. To correct this
condition refern nu2t be in the direction of cc.1ce=atin: authority and .
rcs.ionsibility for co.ltrol into the hands of a smal
l policy fcrmulatine: body.
7.
of rn-,
r-rrn. As the S:rstr-ri has develo;,ed the Governor
s,
villo are not even mcr.Tio:IL:d in t:le .;.ct, have attained
po3itions of major
inportance in influencing policy. -;oreover, they
arc entirely independent
of the Board. If the power of approval of appointn
ents of the Reserve Ba,lk

Governors vere conferred en the Beard, the possibility of ladcof cooperation and friction would be obviated in the future, thile the prestige of the Board vould be enhanced.
8. tz1t.t4cn for c!.. ntrn1 In-1.*_r_T. The adoption of these suggestions
would intmduce certain attributes of a real, central bank capable of energetic and positive action without calling for a drastic revision of the
thole Federal Reserve Act. Private ownership and local autono=y are preserved, but on really iml>ortant questions of policy authority and responsibilityare cencentrated in the Ecard. Thus, effective control is obtained, thile the intense opposition and criticism that greets every central bank proposal is largely avoided.

November 5, 1934

MARRINER ECCLES:

A MAN WHO MADE ECONOMIC HISTORY
by Michael Whitehouse

Fifty years ago construction was halted on the site of the Commerce
Department building in Washington.

A few blocks to the west, near the

Federal Reserve Building, "World War I tempos", the temporary quarters housing the Department of the Navy and the Veterans Administration, lined the
Constitution Avenue Mall.

Elsewhere in the Northeast, people were living

in makeshift structures too -- they called these camps Hoovervilles.
A pall settled over the nation in 1934 while the people
awaited the promise of a new president, Franklin D. Roosevelt.

He assured

the country that "the only thing we have to fear is fear itself."
FDR then set out to mobilize the country and stimulate the
economy through a series of revolutionary programs that were the basis of the
New Deal.

The history of this era is quite well known, but less remembered

perhaps, are the people with new ideas that FDR brought to Washington to get
the job done.
The Federal Reserve has good reason to remember one such
figure -- Marriner S. Eccles. Eccles dramatically affected the history of the
Board of Governors and the Reserve System, and influenced economic history
while helping the country survive the severe economic conditions of the
Depression years.

He came to the Board in 1934 when President Roosevelt

appointed him the first Chairman of the reconstituted Board of Governors,

-2-

and served the system until 1951.

When he died in December 1977,

the newspaper, The American Banker, said, "probably no banker
had more impact on the lives of Americans in this century than
the feisty Utah tycoon who served as Fed chairman... during the 1930s
and World War II."
Next month, in conjunction with the recently enacted amendment
to the Garn - St. Germaine Depository Institutions Act, the Board will
honor the former chairman by officially dedicating the Board building as
the "Marriner S.

Eccles Federal Reserve Board Building."

The event,

which will be attended by members of Congress, the Eccles family and
representatives from the banking community, will be marked by an address by
Chairman Volcker and the unveiling of a memorial plaque that will hang in the
entrance to the Grand Staircase.
In commemorating Eccles' public service, participants
will be paying homage to an exceptionally far-sighted thinker and strate
ist.

He thoroughly believed in banking stability and secure money

management. Those beliefs led to his designing the Banking Act of 1935,
which made the Federal Reserve a more effective instrument of monetary
policy.

To do so, he fought a long battle with Senator Carter Glass,

the prime author of the Federal Reserve Act of 1913 and Chairman on the
Senate Subcommittee, who did not support certain changes proposed by
Eccles despite the grave economic conditions in the 1930s.

-3-

By winning President Roosevelt over to his side , Eccles succeeded in
pushing through changes that are the foundation of the Federal Reserve
today.

The Banking Act of 1935 gave the nation's Central Banking System

greater authority to regulate and supervise canmerci al banking activities
and the major role in making open market transactions.
The way Marri ner Eccles conti nual ly battled to wi n acceptance
of his controversial positions was a trademark of a man whose ideas and
character were quite unconventional for their day.
"Marriner Eccles was something of an anomaly among bankers and
businessmen in the early 1930s -- he was a wealthy westerner of Mormon heritage
who believed in a need for significant changes in the role of government
and the attitudes of businessmen", says Merritt Sherman, Assistant Secretary
of the Board from 1946-51.

"His ideas on government spending were sacrilege

to the traditions of the Eastern establishment.

But he had been a business

success of first rank and a true leader -- they could identify with him on
this ground."
Mr. Sherman, who has actively served the Federal Reserve System for
over 50 years, is something of a Board historian and came to know Chairman
Eccles personally while working with him.
"He came to Washington with a distinct reputation as a businessman and
able banker, who had managed to get all his depositors through the Depression
without losing a penny of their savings despite the grave number of bank
failures around the country", remarks Merritt Sherman.

-4-

Indeed his background was unusual.

Marriner's autobiography, Beckoning

Frontiers, tells of an intriguing family lore. His father, David Eccles,
was a Mormon polygamist with twelve children from his first marriage and
nine, including Marriner, from the second. David Eccles, who had no
formal education, created from scratch a business empire in timber,
railroads, and construction that spanned Utah, Idaho, Nevada and Oregon.
Raised as a Mormon, Marriner spent two years as a missionary in Scotland.
When he was 22 years old, his father died.

He was given responsibility

by his mother for managing various enterprises that she had inherited
and succeeded in making his family's estate into a multimillion dollar
chain of businesses.

When General Electric acquired one of the Eccles

companies, Utah International, in 1976, it was the largest corporate
merger in U.S. history.
As a young businessman, Marriner proved himself extremely competent
and successful in the capitalist spirit.

In later years, he formulated new

economic theories on dealing with the devastation of the depression and
became an influential economic force for the New Deal.
He first received some notice in the nation's capital in
February, 1933 when Congress was hearing testimony from business leaders
regarding proposals to help stimulate the economy.

Eccles, who was

recommended to the Congressional Committee by a Utah Congressman, advocated
the ideas of compensatory goverrrnent spending, arguing that spending was
necessary to stimulate the economy. This was extremely anathema to the
conventional economic thinking of the day.
The New York Times commented..."The paper he prepared and read before
a Senate Committee was so far out of the beaten paths of economic thinking
that there were few who really understood it, and it commanded attention and
comment only from the few."

-5-

Soon after Eccles' Congressional testimony, several of FDR's
close advisors, known as the "Brain Trusters", heard what Eccles had to
say and ultimately Secretary of War, George Dern, wrote Marvin McIntyre,
a key Roosevelt adviser and assistant, suggesting that the president see
the Utah banker.

Dern's note, on file in the Presidential Library in

Hyde Park, New York, reads as follows:
"Mr. Marriner S. Eccles, of Ogden, Utah, is in the city... (We) had a
long visit with him last night and we were so impressed with his grasp of
the economic situation that we all agreed the president should see him.

has not asked for the opportunity to see the president, but will be glad to
come and express his views if invited.

He is not looking for anything and the

president is the one who might be benefited by the interview."
Such was FDR's introduction to Eccles.

Soon after, Marriner Eccles was

persuaded to join the Department of the Treasury as assistant to the secretary.
There, in the spring of 1934, he was a major force behind the legislation
creating the Federal Housing Administration with its insured, amortized
mortgages designed to help invigorate the housing market.

Not intending to

make a career in Washington, Eccles prepared to move his family back to
Utah.

Several months later, however, he was told that President Roosevelt

was considering him for appointment as a member of the Federal Reserve Board.
At a White House meeting FDR broached the question.

Eccles replied that

the proposition was appealing to him but only if his suggestions for

-6-

fundamental changes in the Reserve System would be considered. This qualification interested President Roosevelt and he asked to see something in
writing.
Two months later Eccles again met with President Roosevelt and
presented a three-page, single-spaced memo that outlined reforms which
would later become the essence of the Banking Act of 1935.

Eccles had

prepared the document with the help of Lauchlin Currie, then a Treasury
Department official who was to become assistant director of Research at
the Board.

Impressed with Eccles, FDR appointed him to the position of

Governor of the Board (the title then for Chief Executive Officer of the
Board).
During the next few years, while President Roosevelt was rethinking
his own ideas on economic policies he came to trust Marriner Eccles as
an important confidant and strategist.
The fact that President Roosevelt relied on the advice and ideas of
Eccles is evidenced in a memo that one of the president's senior staffers
sent to another member of FDR's inner circle, Marvin MacIntyre.
December 1935, it said in part:

Dated

"In speaking to the President today

about Marriner Eccles' usefulness to us as a speaker on banking and
monetary national affairs -- and he is the best on these subjects that
we have and we need him badly -- I told the President that Eccles' was
extremely reluctant to deliver any addresses..."
The note, which is on file in the Eccles collection of the University
of Utah library, went on to say that Eccles was reluctant to speak in public
because he was afraid of arousing opposition in the Senate to his nomination

-7--

as Chairman of the Board of Governors (as it would be reconstituted under
the Banking Act of 1935, effective February 1, 1936).
The memo continued:

"Eccles now is quiet as a clam.

He is refusing all kinds

of invitations, some of which if accepted would do us a world of good.
We are under attack with our best gun silenced."
President Roosevelt came to the defense of his "best gun" after this
discussion.

In private, the president spoke with several opponents of Eccles

and, as was his persuasive manner, he succeeded in quelling much of the
opposition.
The cordial and mutually beneficial relationship between the two men
endured through the years as evidenced by Roosevelt's unqualified endorsement of Eccles for Chairman of the Board of Governors.
Chairman in 1936, 1940 and 1944.

Eccles was redesignated

In 1940, the president noted in a personal

letter to Chairman Eccles that if the Chairman was hesitant to take the
post again because of a statute that stipulated that a Board member could not
resume private banking practices for two years after leaving office, he
(Roosevelt) would lobby Congress to repeal that condition.
But a brief letter to Eccles in January of 1944 may have best
revealed his sentiments about the central bank head.

It said:

"The time has came, the walrus said, to speak of many
things -- among others, that your re-nomination goes
to the Senate for confirmation for another term,
whether you like it or not.

Enuf said."

While Eccles succeeded in cementing long lasting friendship with
FOR, the same can not be said of his relationship with the nation's next
president, Harry Truman.

Although Eccles ably presided over an expansion

-8-

of credit for America's European allies, and for domestic arms industries during
the World War II years, President Truman did not reappoint Eccles as Chairman
in 1948.

But Eccles felt, however, that his work for the Federal Reserve System

was not completed.

His convictions were such that he stayed on as a Board

member until mid-1951 and was a key figure in urging steps leading the TreasuryFederal Reserve Accord.

To stem the post-war inflationary pressures on the

economy, Eccles advocated an arrangment whereby the Federal Reserve would no
longer "peg" (or buy) Treasury Department bonds at a fixed rate.

The accord

represented an understanding that the Federal Reserve Board would cease to
monitize the public debt, and thereby assured continuance of the Fed's
independence.
On June 20, 1951, Eccles wrote President Truman:
"It is now more than 17 years since I came to Washington to engage in
a public service that I fully intended and expected would be of comparatively
brief duration.

A succession of events, including the war period and the

special problems of its aftermath, led me to stay on...

But I now feel the

time has arrived when I can and should return to my home and private business
affairs in the West."
After leaving Washington, Eccles continued to campaign vigorously for
causes he favored.

He was a staunch advocate of world population control,

and sought closer relations with China long before that was considered
acceptable in financial and political circles.

He also resumed his business

career in Utah, becoming chairman of the First Security Corporation, a multi-bank
holding company formed by Marriner and his brother George.

He also served as

chairman of the Amalgamated Sugar Company, one of the West's largest sugar
processors, and Utah International, a construction concern

that

-9was acquired by General Electric.
Says Wendell J. Ashton, publisher of the Deseret (Salt Lake City) News,
and a man who knows the Eccles family well:

"The brothers inherited

their father's business acumen and they became giants in their own right."
Mr. Ashton, who also sits on the Board of Directors of the Salt Lake City
branch of the San Francisco Federal Reserve Bank, continues:

"The Eccles

had, and continue to have, a profound impact on the economic and cultural
growth of the Mountain West region."
It can also be said of Marriner Eccles that he had a profound impact
upon the policies and structure of the Federal Reserve System.

The words

that will be set in bronze on the memorial are reflective of Chairman
Eccles' philosophy and are quotations taken from several addresses he
gave during his tenure at the Board.
They read in part:

"I do believe firmly that by monetary means

exercised promptly and courageously we can greatly mitigate the worst
evils of inflation and deflation... I have recommended placing responsibility for the exercise of these powers in the Federal Reserve Board,
which was established by law to serve the best interests of the nation
in banking and monetary matters."

Full text of Paul A. Volcker Papers : Federal Reserve : Eccles Building Dedication, Box 29, Item c207

FRASER