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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Collection: Paul A. Volcker Papers Call Number: MC279  Box 20  Preferred Citation: Regional Meetings, 1976; Paul A. Volcker Papers, Box 20; Public Policy Papers, Department of Rare Books and Special Collections, Princeton University Library Find it online: http://findingaids.princeton.edu/collections/MC279/c243 and https://fraser.sdouisfed.org/archival/5297  The digitization ofthis collection was made possible by the Federal Reserve Bank of St. Louis. From the collections of the Seeley G. Mudd Manuscript Library, Princeton, NJ These documents can only be used for educational and research purposes ("fair use") as per United States copyright law. By accessing this file, all users agree that their use falls within fair use as defined by the copyright law of the United States. 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Mudd Manuscript Library 65 Olden Street Princeton, NJ 08540 609-258-6345 609-258-3385 (fax) muddaprinceton.edu   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  PRESIDENT'S OFFICE  REGIONAL MEETINGS  /9 76   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Background memoranda prepared for meetings held on October 22, 1976 November 15, 1976 November 17, 1976  *  sk  iCE COFZRESPONDLL\!CE DATIEpeceilber 21, 1976 To FROM  Secretary's Office  SUI3JECT: Regional Meetings - 1976  Fred W. Piderit, Jr. , 422  Pe/yr Bakstansky  Ce f/t The Bank Relations and Public Information Departments recently conducted four regional meetings in New York State. The meetings are a continuation of a program planned to strengthen our relationship with bankers and community leaders and to enhance our visibility in the District in keeping with one of the objectives of this Bank's Mission 9. The recent meetings were: October 22, 1976 November 15, 1976 November 17, 1976 November 17, 1976  Colonie (Albany) Tarrytown Batavia (Buffalo) Syracuse  These meetings, plus the two held in New Jersey in April 1976, enabled us to invite all member banks (except the large New York City banks) to a regional meeting this year. Each member bank was invited to have its chief executive officer or his alternate and a nonbanker director attend. For the meetings in Tarrytown, Batavia and Syracuse the banks were given the option of inviting a local legislator. The format at each of the New York meetings included brief introductory remarks, formal presentations on (1) Economics, Monetary Policy, Legislation and Other Issues, (2) Access to Federal Reserve Selvices and Membership, and (3) The Changing Competitive Environment for Banking. Each talk was followed by a discussion period with a general discussion after the last presentation. During the discussion periods the questions covered a wide range of subjects and, in most eases, the responses by our speakers were frank and to the point. The discussions continued through the social and meal periods. The attached tables indicate the location, attendance, and this Bank's participants at each of the sessions held this fall. Our memorandum dated May 13, 1976 provides similar information relating to the New Jersey meetings. The fact that 70 per cent of all member banks invited to the 1976 meetings were represented by an average of 1.7 attendees per bank attests, in our view, to the success of this endeavor. Total estimated cost for the 1976 regional meetings was $7,800, including $6,000 for the four New York State meetings. The Public Information Department feels that despite the limited interest on the part of the press in attending these meetings there are a number of benefits to the Federal Reserve in publicly   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  announcing these meetings and inviting journalists to them. re Importantly, these occasions provide Public Information with exposu to journalists outside of New York City that the Bank seldom has reason to be in contact with. While Public Information fully realizes there are very few financial journalists in the areas in which we hold our regional meetings, those journalists that have attended have often been important and well-known editors locally. The exposure received has been uniformly favorable and there has been no evidence that the presence of the press has inhibited Information comments or discussion at the meetings. In addition, Public feels that the act of announcing these meetings and having them open to the press avoids postmeeting accusations of the Fed having of "secret" gatherings, potentially reinforcing negative impressions the general public. The other side of the coin is that the small press attendance at the meeting and the very limited number of articles that has resulted from our efforts makes it questionable as to r's whether these are efficient press contacts. In addition, Mr. Volcke feeling that the presence of journalists changes the nature of the meeting is an important consideration. CONCLUSIONS AND RECOMMENDATIONS 1. We feel the meetings accomplished their objectives of giving this Bank's senior officers first-hand exposure to the problems and concerns of member bankers, as well as providing a forum for presenting our views on current economic and banking developments to member bankers and community leaders. 2. In view of the above, and considering the written and verbal comments received from bankers, we believe such meetings fill a need in this District. Therefore, we recommend that this Bank continue to hold regional meetings on an annual basis throughout this District. 3. We further suggest that the next series of regional meetings held by this Bank not be announced or open to the press. As an alternative, Public Information will increase its efforts to have contact with journalists in the upstate and New Jersey areas, particularly when members of senior management are traveling to those areas and we might tie in press interviews with those trips. While the press will not be invited to the next round of regional meetings, the attendance of at least one and perhaps two people from Public Information is recommended. The exposure to bankers, directors and legislators and the involvement in the questions facing the bank relations area are important reasons for the presence of the public information function. There is also the possibility that local journalists become aware of the meeting through a banker and show up without invitation. CHA:FTL:PB:RBG/dm Attachments   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  REGIONAL MEETINGS OCTOBER 22 NOVEMBER 15 AND 17, 1976 RECAPITULATION OF BANKERS ATTENDING  TARRYTOWN BATAVIA (BUFFALO) SYRACUSE COLONIE (ALBANY) Totals  MEMBER BANKS INVITED 60 38 46 45 189  MEMBER MEMBER BANKS BANKS EXPECTED ATTENDED 46 40 30 26 36 32 32 29 144 127  PERCENT BANKS ATTENDED 67 68 70 64 67  GUESTS EXPECTED 81 54 64 56 255  GUESTS ATTENDED 68 44 55 47 21,1  DIRECTORS 12 14 14 11 5  CHIEF OTHER EXECUTIVE BANK OFFICERS OFFICERS 30 26 16 14 25 16 22 14  PARTICIPANTS - ATTENDANCE RECAPITULATION Colonie (Albany) Welcome and Introduction Opening Remarks General Federal Reserve Services and membership Changing Competitive Environment Other FRB Officers and Staff in Attendance  FRB Personnel Bankers and Directors Press Grand Total  111  NOTE:  Tarrytown  Batavia (Buffalo) Keane Piderit Volcker Sloane  Mr. Piderit Mr. Volcker Mr. Sloane  Mr. Piderit Mr. Volcker Mr. Sloane  Mr. Mr. Mr. Mr.  Mr. Schadrack  Mr. Schadrack  Mr. Schadrack  Mr. Schadrack  Mr. Bakstansky Mr. Gray Mr. Love Mr. McDonnell (Buffalo Branch) Mr. Allen Mr. Bevacqua Mr. Laverty Mr. Samansky Mr. Gatgens (Buffalo Branch)  Mr. Mr. Mr. Mr. Mr. Mr. Mr.  Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr.  Gray Love Allen Bevacqua Branch Cassella Laverty Samansky  12 47 1 60  Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr.  Bakstansky Gray O'Connell Love Allen Bevacqua Branch Cassella Laverty Samansky  14 68 2 84  14 44 1 59  A state senator and an assemblymar, attended the Syracuse meeting.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Syracuse  Mr. Piderit Mr. Volcker Mr. Sloane  Bakstansky Gray Love Allen Branch Cassella Samansky  11 55 3 69  Removal Notice The item(s) identified below have been removed in accordance with FRASER's policy on handling sensitive information in digitization projects due to copyright protections.  Citation Information Document Type: Newspaper articles Citations:  Number of Pages Removed: 2  Riemann, Robert. "Economy In a Lull, Fed Chiefs Tell Bankers." Times Herald-Record (Middletown, NY), November 21, 1976. Callahan, William F. "FRB Official Doubts Carter Magic Solution to State Ills." Buffalo Courier-Express, November 18, 1976.  Federal Reserve Bank of St. Louis   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  https://fraser.stlouisfed.org  MISC. i36-1o. 4/78 FEDERAL RESERVE BANK OF NEW YORK Date r/A71‘  Of From  'PETER BAKSTANSKY  Please: Attend to  Eg_ For your information  Note and return  EF-For your files  Note and forward  O As per conversation  to Files  O As requested  See (phone) me re attached  O For your comments  Prepare reply for my signature  O Does attached meet  and suggestions with your approval? O For signature, if you approve  Other remarks:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  I Q'vE  •  OF  OFFICE  CORRESPONDENCE  _Mr. Piderit  r Rom  Peter Bakstansky  YOQK  ti DATE  re)  W  SUBJECT  November 26  1976  Regional meetings - 1976  The public information de ar ment feels that despite the limited interest on the part of the press in attending these meetings there are a number of benefits to the Federal Reserve in publicly announcing these meetings and inviting journalists to them. Importantly, these occasions provide public information with exposure to journalists outside of New York City that the Bank seldom has reason to be in contact with. While public information fully realizes there are very few financial journalists in the areas in which we hold our regional meetings, those journalists that have attended have often been important and well-known financial editors locally. The exposure we have received has been uniformly favorable and there has been no evidence that the presence of the press has inhibited comments or discussion at the meetings. Further, public information feels that the act of announcing these meetings and having them open to the press avoids postmeeting accusations of the Fed having "secret" gatherings, potentially reinforcing negative impressions of the general public. The other side of the coin is that the small press attendance at the meeting and the very limited number of articles that have resulted from our efforts makes it questionable as to whether these are efficient press contacts. In addition, Mr. Volcker's persistent feeling that the presence of journalists changes the nature of and inhibits the meeting is an important consideration. The ublic informatioaA22 . Wment tbada2...mauts that the next series of regional meetinus heldlx_Ihis Bank not be announced or open to the press. As an alternative we will increase our efforts to have contact with journalists in the upstate and New Jersey areas, particularly when members of senior management are traveling to those areas and we might tie in press interviews with those trips. While there will be no journalists present at the next round of regional meetings, the attendance of at least one and perhaps two people from public information is recommended. The exposure to bankers, directors and legislators and the involve:oent in the questions facing the bank relations area are important reasons for the presence of the public information function. There is also the possibility that local journalists become aware of the meeting through a banker and show up without invitation.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  MANAIMMEM.OILM.•••.•ve.  The lack of press activity in relation to the regional meetings brings to question the level of involvement of the public information staff in the organizing of these meetings. I believe these questions to be minor and can easily be resolved on a staff level. PB/mdm cc: Messrs.tVolcker Timlen Hoenig Love Allen Samansky  1K  PLC. 26.10/75  FEDERAL RESERVE BANK OF NEW YORK Date10/18/76 To  Mr. Bakstansky  Of From  Lawrence D. Fruchtman  As you requested, attached hereto is a briefing memorandum regarding Federal legislation. Owing to the multitude of bills of interest to the banking community and the Federal Reserve System which were enacted, or considered and rejected, by the Congress, the memorandum is substantial. Accordingly, Mr. Volcker may wish to direct his attention to the following bills which would appear to be of greatest interest to the regional bankers: Enacted Legislation 1)  Public Law 94-329--the Equal Credit Opportunity Act Amendments of 1976 pp. 1-2.  2)  Public Law 94-240--the Consumer Leasing Act of 1976 p. 2.  3)  Public Law 94-200--containing the Home Mortgage Disclosure Act of 1976 p. 2   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  PLG. 2612/67  FEDERAL RESERVE BANK OF NEW YORK  •  Date To  10/18/76  Mr. Bakstansky  Of From  Lawrence D. Fruchtman  2  Significant Bills Which Failed in the 94th Congress 1)  H.R. 13077--the proposed Financial Reform Act of 1976 p. 6.  2)  S. 1267--the proposed Financial Institutions Act of 1976 p. 6.  3)  H.R. 3035--Interest on Treasury Tax and Loan Accounts, and Governmental demand deposits pp. 6-7.  4)  S. 2304 Civil penalties for banking law violations p. 7.  LDF:hmb   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  MISC. 3.3-  FEDERAL RESERVE BANK OF NEW YORK  2/74  • OFFICE CORRESPONDENCE  110  DATF October 18, 1976  To  Mr. Bakstansky  FROM  James H. Oltman  SUBJECT:  Briefing memorandum on  pending Federal legislation.  Lawrence D. Fruchtman  Reference is made to your request that we prepare background material regarding pending Federal legislation for Mr. Volcker's reference during regional bankers' meetings to be held on October 22, November 15, and November 17, 1976. The 94th Congress adjourned sine die on October 1, 1976 having completed action on a number of major bills, some of which have been signed by the President, while others await his signature. In addition, the 94th Congress failed to act on several bills of substantial interest to the banking community and the Federal Reserve System. In many cases, these bills will be reintroduced in the 95th Congress, which is scheduled to convene on Tuesday, January 4, 1977. The bills which would be of greatest interest to regional bankers are marked with an asterisk (*). Enacted Legislation The following bills, arranged by topic, were either enacted during the 94th Congress, or were cleared by Congress and await the President's signature. Banking and Financial Regulation (1) S. 249, now Public Law 94-29--the Securities Acts Amendments of 1975--was signed by the President on June 4, 1975. The Act provides for, among other things, regulation of clearing agencies, securities depositories and transfer agents (enforcement responsibility with respect to banks which act in these capacities is shared by the SEC and the appropriate bank regulatory agency). The Act authorizes the SEC to regulate municipal securities dealers, including banks; and requires persons who handle securities, subject to regulations of the SEC, to make reports of missing, lost, counterfeit or stolen securities, and to authenticate securities used in certain financial transactions. *(2) H.R. 6516, now Public Law 94-239--the Equal Credit Opportunity Act Amendments of 1976--was signed by the President on March 23, 1976. The Act, which will take effect on March 23, 1977, expands the prohibitions of the Equal Credit Opportunity Act to include discrimination based upon race, color, religion, national origin, age (if the applicant has capacity to contract), receipt of public assistance benefits, or the exercise of rights   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  MISC. 3.3-  FEDERAL RESERVE BANK OF NEW YORK  2/74  OFFICE CORRESPONDENCE  •  DATF October 18, 1976  To  Mr. Bakstansky  FROM  James H. Oltman  SUBJECT.  Lawrence D. Fruchtman  2  under the Consumer Credit Protection Act, in addition to sex and marital status. The Board of Governors has proposed a revision of its Regulation B to implement the Act. *(3) H.R. 8835, now Public Law 94-240--the Consumer Leasing Act of 1976--was signed by the President on March 23, 1976. The Act, which will take effect on March 23, 1977, requires certain disclosures in consumer lease transactions and consumer lease advertising, and limits a lessee's ultimate liability under a consumer lease. The Board of Governors has issued proposed amendments to its Regulation Z to implement the Act. *(4) S. 1281, now Public Law 94-200, which was signed by the President on December 31, 1975, contains anti-redlining provisions (the Home Mortgage Disclosure Act of 1975), which beginning June 28, 1976, require, for 4 years, Federally regulated mortgage lending institutions with offices in Standard Metropolitan Statistical Areas to compile and make available, in accordance with regulations of the Board of Governors, a public record file disclosing the location by census tract (or, if the Board determines that such information is not readily available at reasonable cost, by zip code) of their mortgage investments. The Board of Governors has promulgated a new Regulation C to implement the Act. Public Law 94-200 also contains provisions requiring maintenance of the 1/4 percent interest rate limitation differential between commercial banks and thrift institutions; extending the flexible interest rate control authority (Regulation Q) until March 1, 1977; and extending the authority of the National Commission on Electronic Funds Transfers for an additional year. (5) S. 2327, now Public Law 94-205--the Real Estate Settlement Procedures Act Amendments of 1975--was signed by the President on January 2, 1976. The Act repealed certain of the more onerous requirements imposed on mortgage lenders by the Real Estate Settlement Procedures Act. (6) S. 2672, now Public Law 94-222, was signed by the President on February 27, 1976. The Act amended Public Law 93-100 to permit financial institutions in Connecticut, Maine,   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  MISC. 3.3-  2/74  FEDERAL RESERVE BANK OF NEW YORK  : OFFICE CORRESPONDENCE  S To  DATE October 18  Mr. Bakstansky  1976  SUBJECT.  FROM James H. Oltman  Lawrence D. Fruchtman  3  Rhode Island and Vermont, in addition to Massachusetts and New Hampshire, to offer NOW accounts. It also amended the Fair Credit Billing Act with respect to discounts and surcharges in credit card transactions; permitted the Board of Governors to implement a procedure pursuant to which lenders could rely on interpretations and approvals given by authorized System personnel under the Truth in Lending Act; and extended the State Taxation of Depositories Act through September 12, 1976. (The 94th Congress failed to enact a further extension of the State Taxation of Depositories Act, which bars States and localities from levying income, gross receipts or other doing business taxes on out-of-state financial institutions.) Federal Reserve System (1) House Concurrent Resolution 133, on which Congress completed action on March 24, 1975, in effect requires the Chairman of the Board of Governors to appear at quarterly hearings regarding the conduct of monetary policy held alternately before the House and Senate Banking Committees. Chairman Burns is tentatively scheduled to again testify pursuant to H. Con. Res. 133 at hearings before the Senate Banking Committee on November 11, 1976. Taxation (1) H.R. 10612, now Public Law 94-455--the Tax Reform Act of 1976--was signed by the President on October 4, 1976. The Act extends or makes permanent certain of the antirecession individual and business tax cuts made by the Tax Reduction Act of 1975 (Public Law 94-12, signed March 29, 1975) and the Revenue Adjustment Act of 1975 (Public Law 94-164, signed December 23, 1975). The Act also, among other things, limits the tax benefits which may be derived from certain "tax shelter" investments; lengthens the holding period required for long term capital gain treatment and increases the amount of capital loss which may be offset against ordinary income; permanently exempts   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  (  .Isol1SC. 3.3—  FEDERAL RESERVE BANK OF NEW YORK  2/74  OFFICE CORRESPONDENCE  • TO FROM  DATF  Mr. Bakstansky  October 18, 1976  SUBJECT:  James H. Oltman Lawrence D. Fruchtman  4  from taxation earnings from U.S. bank deposits held by foreigners; denies certain tax benefits to companies which participate in an international boycott or make illegal payments to foreign officials; requires IRS to notify taxpayers when it issues an administrative summons for their tax records to a third party (including banks and other financial institutions); and substantially revises estate and gift taxation. (2) H.R. 11997, now Public Law 94-452, was signed by the President on October 2, 1976. The Act provides tax relief to bank holding companies which have been required by the Bank Holding Company Act Amendments of 1970 to divest certain holdings. Aid to New York City (1) H.R. 10481, now Public Law 94-143--the New York City Seasonal Financing Act of 1975--was signed by the President on December 9, 1975. The Act authorizes the Secretary of the Treasury to make annual loans not exceeding $2.3 billion to New York City or the Municipal Assistance Corporation through June 30, 1978, which must be repaid at the end of each fiscal year. (2) H.R. 10624, now Public Law 94-260--was signed by the President on April 8, 1976. The Act amends Chapter IX of the Bankruptcy Act (dealing with municipal adjustments) to permit large cities such as New York to enter into a plan of composition. The Act reduces or eliminates certain onerous requirements of prior law which in effect barred large municipalities from filing for bankruptcy, and broadens and clarifies the powers available under the Bankruptcy Act to insolvent municipalities. Government Reform (1) S. 5, now Public Law 94-409--the Government in the Sunshine Act--was signed by the President on September 13, 1976. The Act requires most Federal agencies to open their meetings to the public and to maintain verbatim transcripts or electronic   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  M!SC. 3.3-  FEDERAL RESERVE BANK OF NEW YORK  2/74  OFFICE CORRESPONDENCE  •  DATF  To  Mr. Bakstansky  FROM  James H. Oltman  October 18, 1976  SUBJECT:  Lawrence D. Fruchtman  5  recordings of meetings which are closed pursuant to ten listed exceptions to the open meeting requirement. The Board of Governors would be able to close many of its meetings under exceptions relating to disclosures of certain trade secrets or financial or commercial information; disclosures of information contained in reports of examination, operation or condition of financial institutions; or disclosures of actions by the Board which, if disclosed, would lead to significant financial speculation or endanger the stability of a financial institution. In many cases, the Board would be authorized to keep detailed minutes of its closed meetings rather than a verbatim transcript or electronic recording. (2) H.R. 3884, now Public Law 94-412--the National Emergencies Act--was signed by the President on September 14, 1976. The Act provides for the termination of existing states of national emergency and certain Presidential powers based upon their existence. It also establishes procedures for Congressional review and termination of future states of national emergency. Anti-trust Legislation (1) H.R. 8532, now Public Law 94-435--the Hart-Scott-Rodino Anti-trust Improvements Act of 1976--was signed by the President on September 30, 1976. The Act, among other things, increases the investigative powers of the Justice Department in anti-trust matters; permits State attorneys general to bring civil antitrust actions on behalf of State residents; and requires advance notice of certain mergers to be given to the Federal Trade Commission and the Justice Department. Although institutional portfolio investments and bank mergers and bank holding company acquisitions are exempt from the premerger notification provisions of the Act, in the case of acquisitions by bank holding companies under Section 4 of the Bank Holding Company Act, a duplicate of the application filed with the Board of Governors must be filed simultaneously with the Federal Trade Commission and the Justice Department at least 30 days prior to the consummation of the transaction.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  MISC. 3.3- 2/74  FEDERAL RESERVE BANK OF NEW YORK  • OFFICE CORRESPONDENCE  O  DATF  To  Mr. Bakstansky  FROM  James H. Oltman  October 18, 1976  SUBJECT.  Lawrence D. Fruchtman  6 International Monetary System (1) H.R. 13955, which was cleared for the President's signature on October 1, 1976, would, among other things, _ authorize U.S. approval of amendments to the Articles of Agreement of the International Monetary Fund concerning members' exchange arrangements, reduction in the role of gold in the international monetary system, changes in the characteristics and uses of Special Drawings Rights, and simplification and modernization of the IMF's financial operations and transactions. The bill would also authorize U.S. consent to an increase of 1.705 billion SDR (approximately $2 billion) in the U.S. quota in the IMF. Significant Bills which Failed in the 94th Congress Financial Reform *(1) H.R. 13077, the proposed Financial Reform Act of 1976, was re-referred by House Banking Committee Chairman Reuss (D.-Wis.) to the Subcommittee on Financial Institutions Supervision, Regulation and Insurance, defeating the bill in the 94th Congress. The bill was one of three to arise from the Financial Institutions and our Nation's Economy (FINE) Study and contained provisions aimed at making commercial banks and thrift institutions (including credit unions) more highly competitive. In December 1975, the Senate passed a bill (S. 1267*--the proposed Financial Institutions Act of 1975) which contained certain similar provisions. *(2) H.R. 3035, a bill which would have (i) enabled the Treasury to earn interest on funds held for it by commercial banks; (ii) authorized banks to pay interest on demand deposits of Federal, State and local governments; (iii) authorized noninterest bearing, and interest bearing NOW accounts for Federal savings and loan associations in New York and New Jersey if similar accounts were permitted to like State chartered institutions; and (iv) extended the State Taxation of Depositories   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  mipc. 3.3-  FEDERAL RESERVE BANK OF NEW YORK  2/74  OFFICE CORRESPONDENCE  S  DATE  To  Mr. Bakstansky  FROM  James H. Oltman Lawrence D. Fruchtman  October 18, 1976  SUBJECT.  7 \  Act through June 30, 1977; failed in the last weeks of the 94th Congress when the Senate on September 20, 1976 voted 34 to 33 against debating the measure. Bank Regulation (1) H.R. 13876, the proposed International Banking Act of 1976, was passed by the House on July 29, 1976. However, owing to strong opposition to certain of its provisions by foreign banks, State bank regulators, and the New York clearing house banks, the bill was not reported by the Senate Banking Committee prior to the end of the 94th Congress. The bill would have provided for Federal regulation of United States bank subsidiaries, branches, agencies and investment company subsidiaries of foreign banks. Although H.R. 13876 arose from the FINE Study, its provisions were in many respects similar to the Board's proposed Foreign Bank Act of 1975 (S. 958, H.R. 5617). *(2) S. 2304, a bill which was introduced at the request of the Board of Governors, the Comptroller of the Currency and the FDIC to deal with problem bank situations, would have imposed civil penalties for violations of various provisions of the Federal Reserve Act, the Federal Deposit Insurance Act, the Bank Holding Company Act and the Financial Institutions Supervisory Act, as well as granted bank regulators authority to remove bank managers and directors who had been grossly negligent in the conduct of their duties. The Senate Banking Committee favorably reported the bill with an amendment which would have required the Comptroller of the Currency, the FDIC, and the National Credit Union Administration to obtain budgetary approval from the House and Senate Appropriations Committees. However, the amendment was viewed as controversial and the Senate refused to take up the bill in the last weeks of the 94th Congress. (3) S. 890, a bill which was introduced at the request of the Board of Governors to facilitate emergency bank acquisitions, mergers and consolidations under the Bank Holding Company Act, was the subject of hearings by the Senate Banking Committee, which   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  MISC. 3.3-  FEDERAL RESERVE BANK OF NEW YORK  2/74  OFFICE CORRESPONDENCE DATF To FROM  Mr. Bakstansky  October 18, 1976  SUBJECT.  James H. Oltman Lawrence D. Fruchtman  8  reported a bill (S. 2209) that was subsequently passed by the Senate. S. 2209 contained certain of the provisions of the Board's bill, but deleted a key provision that would have authorized the Board to approve bank acquisitions across State lines in emergency situations. The provisions of S. 2209 were included in H.R. 13077, the proposed Financial Reform Act of 1976. (4) S. 2050, the proposed Reserve Requirements Act of 1975, which was introduced at the request of the Board of Governors and would have authorized the Board to set uniform ranges of reserve requirements for member and nonmember institutions, was not acted upon in the 94th Congress. However, similar provisions were included in S. 1267--the proposed Financial Institutions Act of 1975. Reform of Bank Regulators (1) H.R. 12934, the proposed Federal Reserve Reform Act of 1976, was passed by the House on May 10, 1976 and reported by the Senate Banking Committee with amendments on July 30, 1976. However, on September 20, 1976 the Senate voted 38 to 30 against a motion to debate the bill, thereby defeating the measure. The bill was the third to arise from the FINE Study, and in the version reported by the Senate Banking Committee would have provided for Senate confirmation of the Chairman of the Board of Governors, as Chairman and not merely as a member of the Board; broadened the representation of the Board of Governors; increased the number of Class C Reserve Bank directors from 3 to 6 and required them to be appointed without discrimination; and stated Congressional policy regarding monetary policy and required the Chairman to continue to appear at quarterly hearings regarding the conduct of monetary policy held alternately before the House and Senate Banking Committees. The bill also contained two non-germane provisions which would have extended the State Taxation of Depositories Act through June 30, 1977, and authorized Federally chartered savings and loan associations in New York and New Jersey to offer non-interest bearing, and interest bearing, NOW accounts to the same extent as similar State chartered institutions. A provision of the House-passed bill which would have   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  hil?C. 3.3-  2/74  FEDERAL RESERVE BANK OF NEW YORK  OFFICE CORRESPONDENCE  411111  DATF October 18, 1976  To  Mr. Bakstansky  FROM  James H. Oltman  SUBJECT•  Lawrence D. Fruchtman  9  required the terms of the Chairman and Vice Chairman of the Board of Governors be coterminous (with a six month lag) with the term of the President who appoints them, was deleted by the Senate Banking Committee. (2) H.R. 7590, to provide for a comprehensive audit of the Federal Reserve. System by the Government Accounting Office, was favorably reported by the House Banking Committee on June 25, 1975, but was defeated in the House Rules Committee, which voted on September 24, 1975 to indefinitely postpone consideration of the bill. Foreign Boycotts (1) H.R. 15377, passed by the House on September 22, 1976, and S. 3084, passed by the Senate on August 27, 1976, which would have extended the Export Administration Act for one year, each contained provisions barring compliance by U.S. companies with foreign boycotts, the House version being somewhat stronger than the Senate version. Notwithstanding strong support for the measure in both the House and Senate, Senator John Tower (R.-Texas) was able to block the appointment of a conference committee to reconcile the House and Senate bills in the last week of the 94th Congress, defeating the measure.  LDF:JHO:hmb   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  ,/  42<`atitis-U4k Co  L4Litut3  1,14(e.  PLG. 26-12/67  FEDERAL RESERVE BANK OF NEW YORK  •  To  Date  10/15/76  Mr. Volcker  Of From  Peter Bakstans, f ) "  The Legal Department has prepared the attached summary of important state and national legislative activities regarding banking.  I thought it would be helpful  to you for the Regional Meetings with bankers that will be held in the coming month.  Attachment cc:  Messrs. Piderit Sloane Schadrack   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  MISC. 3.3.  FEDERAL RESERVE BANK OF NEW YORK  2/74  . OFFICE CORRESPONDENCE  • To  Li mATF October  Mr. Bakstansky  12, 1976  SUBJECT. Pending State legislation.  FROM James H. Oltman  Walker F. Todd  Reference is made to your request dated September 23, 1976, that we prepare background material in regard to pending State legislation for Mr. Volcker's reference during regional meetings to be held on October 22, November 15, and November 17, 1976. The New York Legislature has adjourned for the remainder of this calendar year and will not reconvene, except on an emergency basis, before January 1977. Any bill introduced in the 1975-76 session of the Legislature expired upon the Legislature's adjournment on July 30, 1976. Any bill which was not enacted and which a sponsor wishes to carry forward into the new legislative session will have to be reintroduced and submitted to the same procedures as if it were an entirely new bill during the 1977-78 legislative session. Therefore, there are no bills currently pending before the New York Legislature. However, the laws mentioned below, which were enacted during the 1976 session of the Legislature, may be of interest to Mr. Volcker. The 1975-76 session of the New York Legislature formally adjourned sine die, effective at 3 P.M., July 30, 1976. There was a one-day extraordinary session on August 4, 1976, which enacted the judicial reform law, Chapter 966 of the Laws of 1976. The following are some of the Laws of 1976 which are of major interest to bankers (the more important laws are marked with an asterisk):   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1.  Chapter 78 amended the Abandoned Property Law to shorten the time after which bank deposits would be deemed abandoned from 10 years to 5 years; the same time period for items placed in safe deposit boxes was shortened from 10 years to 3 years after the opening of the boxes.  2.  Chapter 121 changes the designation of the Memorial Day public holiday from the last Monday in May to May 30.  *3  Chapter 136 extends until May 1, 1977, the authority of the Banking Board to permit the legal interest rate to rise to 8.5 percent in times of shortages of funds for mortgage lending.  MISC. 3.3-  FEDERAL RESERVE BANK OF NEW YORK  2/74  OFFICE CORRESPONDENCE  411 To  FROM  DATF October 12, 1976  Mr. Bakstansky  SUBJECT.  James H. Oltman Walker F. Todd   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  2  *4  Chapter 225 authorizes savings banks and Statechartered savings and loan associations to offer checking accounts, together with overdraft loan privileges in amounts up to $1,000 per customer.  5.  Chapter 386 authorizes the Superintendent of Banking to appoint the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or the Administrator of the National Credit Union Association as receiver or liquidator of any banking organization, with authorization to sell, assign, or otherwise dispose of the assets of any banking organization without court or shareholder approval.  6.  Chapter 417 appears to authorize any trust company to deposit the securities investments of its common trust fund with a clearing corporation or a Federal Reserve Bank.  7.  Chapter 536 imposes penalties payable by banking organizations to the Superintendent of Banking for violations of the Banking Law and the Superintendent's regulations similar to those previously payable by licensed lenders and increases the maximum penalties from $1,000 to $5,000 and aggregate penalties in any one proceeding from $5,000 to $15,000.  8.  Chapter 618, effective July 21, 1977, requires all banking institutions and credit unions to obtain insurance on deposits and share accounts from the appropriate Federal entity or from such other insurers as the Superintendent of Banking may approve. Banking organizations which do not receive deposits from the public may be exempted from this requirement, but any insured bank may not voluntarily terminate its insured status after the effective date.  FEDERAL RESERVE BANK OF NEW YORK  MISC. 3.3- 2/74  - OFFICE CORRESPONDENCE DATF October 12, 1976  • To  Mr. Bakstansky  FROM  James H. Oltman Walker F. Todd  SUBJECT.  3  9.  Chapter 655 extends the expiration date of the statutory prohibition against sales of creditrelated property and casualty insurance by banking institutions and credit unions from August 1976 to August 1977; however, this law requires a report to the Governor and the Legislature on the effects of this prohibition by the supervisory authorities before February 1, 1977.  *10.  Chapter 718 increases the personal loan limits for banks and trust companies from $10,000 to $15,000 per customer.  *11.  Chapter 721 authorizes variable interest rate demand loans in initial principal amounts in excess of $5,000; previously, whenever a lender wished to raise or lower the effective interest rate on a demand loan, it was necessary to call that loan and have the borrower execute a new note at the different rate.  WFT:JHO:hmb   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  I  •  October 14, 1976  To:  Mr. Samansky  From:  Walker F. Todd  Subject: Pending Federal and State legislation: Federal loan to New York City.  Reference is made to your request that I provide you with a summary of the legislation which provided New York City with a Federal emergency loan.  Because that loan was authorized  by Federal law, Mr. Fruchtman will summarize the provisions of the loan legislation. I spoke with Mr. Kenneth Hartman in the office of the City Deputy Comptroller, and he told me that in the 1975-76 fiscal year the City was authorized to borrow $1.3 billion from the Treasury but only borrowed $1.26 billion.  The City loan matures  each June 30.  For subsequent fiscal years the loan ceiling is  $2.3 billion.  The City has projected borrowing $2.175 billion  for the current fiscal year, but recent trends indicate that the maximum borrowing will not exceed $2 billion.  The City has  borrowed $1.075 billion thus far in this fiscal year, with the next advance from the Treasury expected to occur in December 1976.  !  00 )  WFT:hmb   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  Outline for Regional Meeting' November 1976  I.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  The Current Recovery and Outlook A.  Review of the Current Recovery 1.  Real output, as measured by the GNP data, has increased 9.6 percent since the start of the recovery (Chart 1: Real GNP in Postwar Recoveries). a.  2.  The growth has been anything but steady. Instead, the . recovery has displayed the uneveness to be expected, alternating between unsustainably rapid and sluggish growth (Chart 2: Changes in Real GNP).  3.  The rebound was initiated by consumers (Chart 3: Real Consumption). a.  B.  This is close to the average growth experienced in previous postwar recoveries.  Changes in  Consumer spending turned up in early 1975 while other components of GNP continued to plunge.  4.  In subsequent quarters, inventory investment turned around and began to contribute positively to the economic recovery. Inventory liquidation slowed sharply in the second half of 1975 and was followed by renewed inventory accumulation (Chart 4: Real Inventory Investment).  5.  Residential construction also rebounded early in the recovery-from a severely depressed level--although the rate of gain tapered off during the first three quarters of this year (Chart 5: Changes in Real Residential Construction). 41,  6.  Business fixed investment has begun to rise, following a normal lag (Chart 6: Changes in Real Business Fixed Investment). Nonetheless, plant and equipment spending has provided less of an impetus to the recovery than usual (Chart 7: Real Business Fixed Investment in Postwar Recoveries).  The Recent Slowdown 1.  Consumer spending turned rather sluggish last spring after an unsustainable burst in the early months of the year (Chart 3: Retail Sales). a.  This sluggishness seems to have carried through October, with sales in October up only marginally from September. Department store sales were strong, but sales of autos and other consumer durables declined (Chart 9: Retail Sales Excluding Automotive).  - 2 -  •  b.  The UAW strike against Ford curtailed auto production in September and October and has undoubtedly held down 'auto sales (Matt .10:DomesticAutOMObile- - • Sales and Production).  Since spring, the housing sector has contributed little to economic growth. Housing starts in August were no higher than housing starts in February (Chart 11: Housing Starts). a.. There were some encouraging signs of late, however. 1.  Housing starts jumped in September to an annual rate of 1.8 million units, the highest level of activity in 3 years. Much of the gain of the past two months has been concentrated in the depressed multi-family sector.  iii.  3.  Now that inventory inveSt6ent has returned to more normal levels, this sector's contribution to the recovery has dropped off.  4.  As mentioned earlier, capital spending has failed to pick up as much as hoped for,..:  5.  These developments have all contributed to a slowdown in the growth of output (Chart 12: Industrial Production). a.  6.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  0  Building permits shot up in August and September-..for both single-family and multi-family units. This is an indication that housing activity is likely to contribute to economic growth in the near future.  In September, production actually failed to advance. But, to a considerable extent this reflected the impact of the Ford strike.  The unemployment rate has also increased since last spring, 13: Unemployment Rates). (Chart  a.  The rise in unemployment reflects in part the impact of the recent slowdown.  b.  It is also linked to the behavior of the labor force. While employment growth has kept up with the average of past recoveries, labor force growth has been unusually rapid (Chart 14: Labor Force and Employment).  3  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  C.  Outlook for the Recovery 1.  raised quesThe continued sluggishness of the recovery has _ tions over whether the recovery is endjng. - However, there is no reason to anticipate that the current recovery may soon. abort. The recovery has been under way only20 months, which is not long by postwar standards (Chart 15: Length of Recoveries).  2.  Moreover, there are no signs of the strains that have in the past precipitated economic downturns. a.  Inventories do not appear out of line with sales inventory/Sales Ratios).: (Chart lf).  b.  Capacity is ample (Chart 17: Utilization).  c.  Financial markets do not appear strained. Indeed interest rates have on balance drifted downward_ _ during the recovery, instead of rising as normal (Chart 18:- Interest Rates).  d.  3.  Measures of Capaciq.  the rubber, coal, and 4nd with major strikes ending in strikes have automotive sectors, the drag which these had on production should be over.  The economy clearly has the potential for a long sustained advance. How much of this potential is realized will depend in large part on the strength of future spending by consumers and businesses. a.  Personal income has continued to grow, although the sharp decline in farm proprietors' income held down the overall increase in the third quarter. Personal income in the fourth quarter will be boosted by the Federalogovernment pay raise and by the settlement of several major strikes that plagued the third quarter.  b.  Recent capital spending surveys point to a considerable pickup in expenditures in 1977 (Chart 19: Plant and Equipment Spending Surveys).  Before turning to price and monetary developments, I WoUld like to explore  What the National Recovery Has Meant for the Region A.  New York City 1.  Employment in New York City has been declining since the 1969-70 recession (Chart 20: New York City: Payroll Employment).   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -4 --  2.  Government Employment, after edging higher in the '70's, has dropped sharply since 7975. These highly publicized cutbacks, of course, were mandated by the City's fiscal crisis (Chart 21:. Government Employment).  3.  Private employment has also fallen. There are currently about 600,000 fewer workers on private payrolls in the City than in 1970 (Chart 22: Private Employment). a.  b.  While employment has risen nationally during the recovery, it has continued to fall in the City. In recent months, private sector employment appears to have:levelled'off-suggesfing_t • _ hat A- tenuous -stability may be emerging.  Although the City's job loss has been partially offset by a reduction in the labor force ,the City's unemployment rate national rate. As of September, the has risen relative to City ,rate sTOod, at 10.2 percent (Chart 23 . UneThiploYnie_nts_, Rates). 5.  The job loss has depressed personal income and prevented retail sales in the City from keeping pace with sales natiopally (Chart 24: Retail Sales). a.  b.  C.  6.  B.  Measured in current dollars, August retail sales were roughly equal to sales at the start of 1975. Some preliminary evidence, however, indicate3a pickup _, . in retail sales around the Labor Day weekend and _con-_ 'tinuing :into'. October and November. The growing emergence of Sunday openings may add impetus to retailing.  (Chart 25: Construction activity has come to a virtual standstill New Housing Units).  New York State 1.  The rest of the state has fared better than New York City in recent years. a.  b.  Employment outside the City has increased while City an employment was falling (Chart 26: New York State Civili Employment). The unemployment rate outside New York City has stayed oybelow the City rate (Chart 27: New York State Unempl ment Rates).  c.  2.  Nonetheless, New York State's recovery has not matched the national recovery. a.  The decline in the City offset adv.inces elsewhere in the state, and payro.11'employM'ent- has declifted-(Chaft _ 29::" New York State Payroll EmPloyMc,nt).  b.  The State unemployment rate has recently been well above the national rate. In September, the State's rate was 1:2 percentage points above the national rate (Chart 30: Unemployment Rate)._ Consumer spending in the State has fallen behind spending nationwide.  c  3.  Reflecting the relatively greater strength of the state, retail sales in New York State have been stronger than City sales ...(Chart 28: New York State Retail Sales).  The overall outlook for the State may be improving. a.  - Private employment in the City appears to be levelling off and may be gaining in the State  b.  There are some indications that retail sales are picking up, especially in the City.  c.  With signs of tenuous stability emerging in the CitY, the prospects for the State's economy _appear to be improving.  d.  Indeed, while the differential between the state and national' unemployment rates remains high, this differential has contracted in recent months'.  The Price Situation A. •••  -;   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  B.  The GNP deflator, which provides the broadest gauge of inflation, grew at a 4.4 percent rate in the third quarter. This represents an improvement over the second quarter rate, and is quite modest by recent standards (Chart 31: Tmplicit GNP Price Deflator).  Consumer Prices 1.  2. 3.  Consumer prices rose at a 4.9 percent rate in September, which is slightly below the rate of the previous 5 months (Cliat 32: Consumer Prices). The 12-14 percent inflation rate of 1974 has been cut in half. Food price movements have been somewhat volatile, but overall Indeed, this year food prices have increased only modestly. Consumer early this year they were actually falling (Chart 33: Prices: Food).  p  C.  4.  Energy prices have risen sharply in recent months.  5.  Consumer prices excluding food and energy have been in the 6 percent range ,.throughout the year (Chart 14! Consumer Prices Excluding Food'an7dEni-e-r-gy  Wholesale Prices 1.  Wholesale prices increased substantially in September and October, but have still risen at less than a 57percent - rate • this year .(Chart 35:, Wholesale Prices).  2.  The recent pickup in industrial price increases was certainly unwelcome, but it does not signa1rebuilding - of inflationa6Tpressures (Chart 36: Industrial Wholesale Prices). _ prices reindustrial increase in October the Some of a. suited from the FPC's order allowing natural gas prices to rise; but the FPC has recently cut back the size of the permissible increase. • • b. Furthermore, the wholesale price index may not fully reflect actual ti.ansactions prices. Recently, there has been evidence in - some settora of Tiehvy price discounting.  3.  Another positiVe sign on the inflation front is that ci number of major industries, including steel;- copper, and zinc, have experienced difficulty in making recent price increases stick. In the same vein, General Motors recently announced rebates on its small car line.  4.  Moreover, spot prices for raw industrial commodities have fallen in recent months, which should mitigate future increases in industrial prices (Chart 37: Spot Commodity Prices).  5.  Spot pridies for foodstuffs have also been falling, and with this year's bountiful harvest the nearterm outlook for food prices looks favorable:  •  ; i  1 I  I i  IV   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Monetary Policy A.  Recent History 1.  The money supply generally grew rather rapidly in the 1964-71 period and by 1972 had clearly become excessive (Chart Money Supply Growth).  2.  Therefore, the Federal Reserve began moving toward monetary restraint in the closing months of 1972. This led to slower monetary growth in 1973 and 1974. a.  3.  The basic strategy of this policy was to moderate over time the expansion in money and bank credit to rates of growth compatible with reasonable price stability in the longer run.  In 1975 and early 1976, this pattern was interrupted. In an effort to end the recession and foster the subsequent recovery, the rate of monetary growth was increased.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  B.  Current Situation 1.  The narrowly defined money stock (M1) has generally increased at a moderate rate over recent months._ In spite of a sharp upward spurt in October, M1 has grown over the past year by about 51/2 percent,.which is the midpoint of the FOMC's current longer run target range (Chart 39: Narrow Money Supply).  2.  The broadly defined money stock (M2) has been growing relatively rapidly. Over the past twelve months,_M2_has iien about 16 1/2 . percent (Chart 40: M2: Broad Money Supply). a.  3.  erally drifted lower.* Since early 1975, business loans have gen a.  b.  C.  4.  -type time deposits This is because the growth in consumgr has remained strong.  s to be dile in This is unusual for a recovery and appear liquidity and 'part to business' increased attention on -term debt. their shift from short-term debt to long has apparently now ended, The decline in business loans loans have expanded. and in recent weeks business ide of New York City reached outs s bank at s loan ss ine Bus increased at a modest rate their trough in early May and tion in September and October. thereafter, with some accelera at New York City banks continued In contrast, business loans but have e.gistered tb - decline through early Se2tember art 41 and42: significant gains _since ,that..time (Ch y; Banks Outside Business Loans: Bank ii New- YOrk' Cit - ). New' York City  With inflation interest rates both long term Term and Short  remaining soft, moderating and credit demand past ..few months-have drifted lower over the s 43 and 44: Long and short term rates (Chart Term Interest Rates).  ,  REGIONAL MEETINGS ITINERARY FOR MR. VOLCKER  November 15, 1976 2:30 p.m.  Leave Bank by automobile  3:30 p.m.  Arrive Hilton Inn, Tarrytown, New York (914-631-5700)  3:30 p.m.  Registration for guests and coffee  4:00 p.m.  Meeting starts  6:00 p.m.  Formal meeting concludes  6:30 p.m.  Dinner  7:30 p.m.  Leave Tarrytown for home by Bank automobile  November 17, 1976 7:00 a.m.  Leave home by Bank automobile for LaGuardia  7:55 a.m.  Leave LaGuardia on Allegheny Airline Flight 127  8:56 a.m.  Arrive Buffalo  9:00 a.m.  Leave Buffalo Airport in Branch automobile for Batavia. (Mr. Sloane arrives at Buffalo at 8:58 a.m. on Allegheny Airline Flight 189 and will ride to Batavia with Mr. Volcker).  9:45 a.m.  Arrive Holiday Inn, Batavia, New York (716-343-1440)  10:00 a.m.  Meeting starts  12:00 Noon  Formal meeting concludes  12:30 p.m.  Lunch   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1:30 p.m.  Leave by automobile en route to Syracuse  4:00 p.m.  Arrive Ramada Inn, Syracuse, New York (315-457-8670)  •  /OM  4:00 p.m.  Registration for guests and coffee  4:30 p.m.  Meeting starts  6:30 p.m.  Formal meeting concludes  7:00 p.m.  Dinner  8:15 p.m.  Leave Ramada Inn by automobile to Syracuse Airport  9:23 p.m.  Leave Syracuse on Allegheny Airline Flight 486  10:20 p.m.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  2  Arrive Kennedy, Protection Division will provide transportation from airport to home  „Jo  FEDERAL OF  OFFICE  RESERVE NEW  YORK  CORRESPONDENCE DATE  Mr. Volcker  SUBJECT  September 23, 1976  Regional Meetings  ()  Peter Bakstansky  r4om  I wanted to alert you before you left that we have been planning for the Regional Meetings to be held October 22, November 15 and November 17. As we discussed, I think it desirable for you not to speak from a prepared text but rather discuss a number of broad topics, as you did at the New Jersey meetings. We think it would be appropriate for you to cover the following general areas: 1. 2. 3. 4.  Regional and national economics, monetary policy, pending national and state legislation, other current concerns of the System.  I am sending copies of this memorandum to Messrs. Davis and Oltman and am asking them to prepare background material for you. The other speakers on the program will be Mr. Timlen, whom we are asking to discuss "The Question of Membership: Pricing Access and Services" and Mr. Schadrack, whom we are asking to discuss "The Changing Competitive Banking Situation in New York". Mr. Timlen will not be at the November 15 meeting and we are asking Mr. Sloane to substitute for him on that date. PB/mdw cc: Messrs. Timlen Guy Piderit Sloane Davis Gray Oltman Schadrack Hoenig Love Allen Samansky   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  BANK  10/74 FELIERAL RESERVE BANK OF NEW YORK  M ISC. 136-10-  Date  //  - 4A—AJ Of From  FRED W. P1DERIT, JR.  Please: O Attend to  El For your information  El Note and return  O For your files  • Note and forward to Files  As per conversation O As requested  O See (phone) me  O For your comments  re attached  and suggestions  O Prepare reply for my signature  O Does attached meet with your approval? O For signature, if you approve  Other remarks:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  misc.'bB.2-  FEDERAL RESERVE BANK OF NEW YORK  3/74  *FFICE CORRESPONDENCE DATEAuqust 23, 1976 To  Messrs: Piderit and Bakstansky  FROM  SUBJECT: Regional Meetings - Fall 1976  F. T. Love  Meeting facilities have been confirmed and other arrangements are being made for the fall regional meetings as follows: October 22, 1976 - Turf Inn, Colonie, New York This meeting, in an Albany suburb, will start at 10:30 a.m. and conclude after lunch no later than 2:00 p.m. November -1r, 1976 - Site to be confirmed later this week. This will be an afternoon meeting followed by dinner in either Westchester County or Queens County (LaGuardia Airport area). It will start at 4:00 p.m. and adjourn between 7:30 and 8:00 p.m.. November 17, 1976 - Holiday Inn, Batavia, New York The meeting will start at 10:00 a.m. Participants will leave at 1:30 p.m. (after lunch) by automobile for Syracuse, approximately a two hour trip.  November 17, 19'76 - Ramada Inn, Syracuse, New York Ta allow ample time for travel from Batavia, this meetingN will start at 4:30 p.m., concluding about 8:00 p.m. 11 We understand that both Mr. Volcker and Mr. Timlen will give informal presentations at each meeting. Also, Mr. Schadrack will talk on a timely subject related to Bank Supervision. We suggest that Mr. Sloane be asked to attend the meetings to serve as back-up to any of the speakers and to be available to respond to any comments relating to the Operations Group that may arise during the discussion.  11  FTL/dm cc:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  .41‘  Messrs: Sloane, Gray, Keane, Schadrack, Hoenig, McDonnell, Allen and Samansky.  •  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  New York to Syracuse  7:25 a.m. 8:20 a.m.  Leave LaGuardia Arrive Syracuse  AA 517  (Every day, except Sunday)  8:27 a.m. 9:16 a.m.  Leave Newark Arrive Syracuse  AL 439  (Daily)  410  Wednesday, November 17, 1976  5:00 p.m. Leave Syracuse 5:53 p.m. Arrive LaGuardia  AA #428  8:15 p.m. 9:06 p.m.  Leave Syracuse Arrive LaGuardia  5:45 p.m. 6:32 p.m.  Leave Syracuse Arrive Newark  AL #106  9:23 p.m. 10:20 p.m.  Leave Syracuse Arrive Kennedy  AL #486   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  AA #590   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  REGIONAL MEETING - RAVADA INN SYRACUSE, NEW YORK NOVEMBER 17, 1976  PROGRAM SCHEDULE  4:00 - 4:30 p.m.  Registration - Coffee and Soda  4:30 - 4:35 p.m.  Welcome Remarks and Introduction_ - Mr. Piderit  4:35 - 4:55 p.m.  Presentation - Mr. Schadrack "The Changing Competitive Environment for Banking in New York State  4:55 - 5:05 p.m.  Discussion  5:05 - 5:25 p.m.  Presentation - Mr. Sloane "Access to Federal Reserve ServiCes and Membership"  5:25 - 5:35 p.m.  Discussion  5:35  6:05 p.m.  Presentation - Mr. Volcker General - "Economics, Monetary Policy, Legislation and Other Issues"  6:05  • 6:15 p.m.  Discussion  6:15 - 6:30 p.m.  Open Discussion  6:30 p.m.  Folmal meeting concludes  6:30 - 7:00 p.m.  Reception  7:00 - 8:00 p.m.  Dinner and closing ca.11-(,nts  NOTE:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  In addition to the chief executive offi cer or his alternate bankers were asked to invite one of thei r nonbarkr directors or a local legislator.  •  REGIONAL /METING PAMADA INN SYRACUSE, NEW YORK NOVEMBER 17, 1976  Attendees  Title  The National Bank of Auburn Auburn  Fredeick E. Mider, Jr.  President  Francis J. McGarry  Senior Vice Pres. and Cashier  First-City National Bank Binghamton  Stuart McCarty  President  John F. Russell  Director  The St. Lawrence 'ilational Bank Canton  Edwin J. Lyons  President  Richard C. Cummings  Director  Hayes National Jank Clinton  Gordon M. Hayes  President  Nicholas K. Burns  Director  T. V. Miller  Exec. Vice Pres. and Cashier  John B. Folmer  Director  _First National Bank of Cortland Cortland  The First National Bank . of Dryden Dryden  C1.1(.1ng Canal Trust Ccpany Elmira  Stafford  President  Islcnowell II  President  Robert E. Dalrymple  Directc,r  .J...%e First National Bank of Groton Groton  Merle L. Metzgar  T2)- sJ.uelit  Gary Lee  N.Y. State .AsccA)lynan  The First National Bank of 7-, -on  Harvey E. Ayers  President   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Warren A. Dittes  .  Director  410  Bank  Attendees  Title  Homer National Bank Homer  John R. Ryan  Vice President and Cashier  First National Bank and Trust Company Ithaca  George W. Miller  Senior Vice Pres. and Cashier  Paul Crance, Jr.  Senior Vice Pres.  Raymond Van Houtte  President  Tompkins County Trust Company Ithaca  Jame.  J. Clynes, Jr.  Vice Chairman of the Board  First National Bank of Lisbon Lisbon  Donald Nelson  President  Milton Skiff  Executive Officer/ Cashier  First National Bank of Mexico Mexico  Edith M. Jackson  President  J. W. Lavoie  Assistant Treasurer  R. E. Lavoie, 3rd.  Assistant Treasurer  The First National Bank Moravia  Gerald K. Atwater  President  The First National Bank of Norfolk Norfolk  Byron J. Short  Executive Vice Pres. and Cashier  Albert B. Crabb  President  Everett A. Gilmour  Chairman of the Board  Harrison Edwards or Jack Weinman  Director  Fingerlakes National Bank Odessa  Stanley Youngman  President  The Oneida Valley National Bank of Oneida Oneida  Robert H. Fearon, Jr.  President and Trust Officer  Robert H. Ilearon  Chairman of the Board  The National Bank and. Trust Company of Norwich Norwich   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Director  -3-  • Bank  Attendees  Title  First National Bank of Ovid Ovid  John R. Reynolds  President  Benjamin Franklin  Chairman of the Board  Owego National Bank Owego  Edward J. Wood, Jr.  President  Stephen M. Lounsberry, Jr.  Vice President  Joseph J. Doyle  Chief Executive Officer  Allan F. Woodmancy  President  Arthur Tarolli  President  Frank Fernandez  Director  Robert A. Scott  Vice President and Director  J. Dickson Edson, Jr.  Director  Philip J. McElynn  President  Michael S. Collura  Vice President  First Trust & Deposit Company Syracuse  Parke W. Wicks  • President  H. Douglas Barclay  Director - Senator  Lincoln First BankCentral Syracuse  Robert J. Theis  Director  William Balderston III  Chairman and Pres.  Merchants National Bank and Trust Company Syracuse  Jmes D. Taylor, Jr.  Direc'or  John W. Finlay  President  Cayuga Lake National Bank Union Springs  G. William Ryan  President  The State Bank of Seneca Falls Seneca Falls  Solvay Bank Solvay  Tioga State Bank Spencer  Chemical Bank of Syracuse Syracuse   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -4-  Bank  Attendees  Title  The Oneida National Bank and Trust Company of Central New York Utica  H. Russell Johnson  Chairman and President  The National Bank of Vernon Vernon  Richard Thaler  Cashier  George Trost  President  First National Bank of Waterloo Waterloo  Joseph B. Jacobs  Vice President  The National Bank of Northern New York Watertown  Donald J. Veniard  President  Edmund J. Keane, Jr.  Exec. Vice Pres.  Carmen A. Palumbo  President  Kareta A. Noone  Exec. Vice Pres.  Glen National Bank and Trust Company Watkins Glen  William R. Clark  President  Chemical Bank of Binghamton Binghamton  Robert W. Aber  President  Seaway National Bank Watertown   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  negional Meeting, Ramada Inn, Syracuse, New York November 17, 1976  FEDERAL RESERVE BANK OF NEW YORK ATTENDEES  Paul A. Volcker  President  Fred W. Piderit, Jr.  Senior Vice President  Thomas C. Sloane  Senior Vice President  Peter Bakstansky  Vice President  Ronald B. Gray  Vice President  Frederick C. Schadrack  Vice President  Franklin T. Love  Manager  Carl A. Allen  Special Assistavt  Robert J. Branch  Special Represen  Bruce A. Cassella,  Special Represent 'live  Arthur W. Samansky  Special Assistant   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  tiive  •  PLG. 2e-10/75  FEDERAL RESERVE BANK OF NEW YORR  •  Date  6/30/76  Those Listed Below  To 01 From  F.C. Schadrack  Copies to:  Mr. Mr. Mr. Mr. Mr. Mr.  Volcker/ Timlen Guy Piderit Gray Frey  Attached is a list supplied by jack Ryan (of the Board's staff) of the State member banks in this District to be included in the GAO study of bank supervision.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  DISTRICT 2 •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  New York City, NY  Manufacturers Hanover Trust Co. Chemical Bank Bankers Trust Co. Morgan Guaranty Trust Co. of New York Irving Trust Co. Marine Midland Bank European American Bank and Trust Co. Marine Midland Bank - Western  Buffalo, New York  The Bank of New York  New York City, NY  manufacturers and Traders Trust Co.  2) Buffalo, New York  The County Trust Co.  White Plains, New York  Lincoln First Bank of Rochester  Rochester, New York  United Jersey Bank  Hackensack, New Jersey  Fidelity Union Trust Co.  Newark, New Jersey  State Bank of Albany  .  Albany, New York  Marine Midland Bank - Central  Syracuse, New York  Long Island Trust Co.  Garden City, New York  United States Trust Company of New York  New York City, NY  Security Trust Company of Rochester  Rochester, New York  First Trust and Deposit Co.  )  V Syracuse, New York  The Trust Company of New Jersey  Jersey City, New Jersey  United Counties Trust Co.  Elizabeth, New Jersey ,  Central Trust Company Rochester, ,NY  Rochester, New York  Marine Midland Bank - Southern  Elmira, New York  •  DISTRICT 2 (continued) •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Barclays Bank of New York  New York City  Commercial Trust Company oi New Jersey  Jersey City, New Jersey  Valley Bank of New York  Valley Stream, New York  American Bank and Trust Co.  New York City, NY  Hempstead Bank  Hempstead, New York  Marine Midland Bank - Northern  Watertown, New York  Bank of Buffalo  Buffalo, New York Schenectady, New York  he Schenectady Trust Co. Nassau Trust Co.  Glen Cove, New York  Dankers Trust Co. of Western New York  Jamestown, New York  Schroeder Trust Co.  New York City, NY  Tompkins County Trust Co.  Ithaca, New York  Chemung Canal Trust Co.  Elmira, New York  The Exchange Bank of Olean  Olean, New York  The Columbus Trust Co.  Newburgh, New York  Dundee State Bank  Dundee  . ,  ‘„  7•'''„" .*.,  New York  •  GROUND TRANSPORTATION ARRANGEMENTS REGIONAL MEETINGS NOVEMBER 17, 1976  Sheraton-East to Batavia  Batavia to Syracuse  Car 1 - Mr. Gatgens (Buffalo) (Leave Sheraton-East at 8:00 a.m.)  Car 1 - Mr. Gat_gcns (Buffalo) (Leave Batavia at 1:30 p.m.)  1.  Mr. Love  1.  Mr. Love  2.  Mr. Allen  2.  Mr. Allen  3.  Mr. Samansky  3.  Mr. Samansky  Car 2 - Mr. Bavacqua (Leave Sheraton-East at 8:30 a.m.)  Car 2- Mr. Bevacqua (Leave Batavia at 1:30 p.m.)  1.  Mr. Piderit  1.  Mr. Volcker  2.  Mr. Schadrack  2.  Mr. Piderit  3.  Mr. Bakstansky  Car 3 - Mr. Branch (Leave Sheraton-East at 8:30 a.m.)  Car 3 - Mr. Branch (Leave Batavia at 1:30 p.m.)  1.  Mr. Bakstansky  1.  Mr. Sloane  2.  Mr. Gray  2.  Mr. Gray  3.  Mr. Schadrack  Car 4 - Mr. McDonnell (Buffalo) Theave Buffalo Airport at 9:TID—a.m.) • 1.  Mr. Volcker  2.  Mr. Sloane  3.  Mr. Keane   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  REGIONAL MEETING - HOLIDAY INN BATAVIA, NEW YORK NOVEMBER 17, 1976  •  PROGRAM SCHEDULE  10:00 - 10:03 a.m.  Registration - Coffee and Danish • Welcome Remarks and Introduction - Mr. Keane  10:03 - 10:05 a.m.  Remarks - Mr. Piderit  10:05 - 10:25 a.m.  Presentation - Mr. Schadrack "The Changing Competitive Environment for Banking in New York State"  10:25 - 10:35 a.m.  Discussion  10:35 - 10:55 a.m.  Presentation - Mr. Sloane "Access to Federal Reserve Services and Membership"  10:55 - 11:05 a.m.  Discussion  11:05 - 11:35 a.m.  Presentation - Mr. Volcker General - "Economics, Monetary Policy, Legislation and Other Issues"  11:35 - 11:45 a.m.  Discussion  11:45 - 12:00 noon  Open Discussion  12:00 noon  Formal meeting concludes  12:00 - 12:30 p.m.  Reception  72:30 -  Luncheon and closing corments  9:30 - 10:00 a.m.  NOTE:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1:30 p.m.  In addition to the chief executive officer or his alternate bankers were asked to invite one of their nonbanker directors or a local legislator.  •  LIST OF ATTENDEES Buffalo Branch Federal Reserve Bank of New York Regional Meeting Holiday Inn - Batavia, New York November 17, 1976  Mr. Herbert D. Allison, President Mr. Jeffrey Smith, Jr., Director Community National Bank Addison, New York Mr. Charles A. Marks, President Mr. Hans W. Jordans, Director Alden State Bank Alden, New York  Mr. Claude F. Shuchter Chairman and Chief Executive Officer Andrew B. Craig, III, President Manufacturers and Traders Trust Company Buffalo, New York Mr. Arthur S. Hamlin, President Mr. Frank H. Hamlin, Chairman of Board Canandaigua National Bank and Trust Company Canandaigua, New York  Mr. Carl F. Ulmer, President Mr. David M. Ianni, Director The Evans National Bank of Angola Angola, New York  Mr. John E. Nugent, President Mr. Roy W. Rogers, Vice President First State Bank Canisteo, New York  Mr. R. Carlos Carballada, President Mr. Russell Miller, Director The Citizens Central Bank Arcade, New York  Mr. L. E. Cullen, President Mr. P. J. Cullen, Vice President Bank of Cattaraugus Cattaraugus, New York  Mr. Charles Houser, Sr., Cashier Bank of Avoca Avoca, New York  Mr. Donald W. Castor, President Mr. Raymond Tyman, Director Ontario National Bank of Clifton Springs Clifton Springs, New York  Mr. Herbert Fort, President Mr. John Stenson, Chairman of the Board The Bath National Bank Bath, New York Mr. John F. Furey Vice President Mr. Edward T. O'Connell, Controller Chemical Bank - Buffalo Buffalo, New York Mr. William F. Farley, President Citibank (New York State), N.A. Buffalo, New York Mr. Robert J. Donough, President Mr. Harold A. Egan, Director Liberty National Bank & Trust Co. Buffalo, New York   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Mr. Charles F. Hartung, President Mr. J. Kenneth Scott, Vice Chairman Genesee Valley National Bank and Trust Company of Geneseo Geneseo, New York Mr. Martin E. Hayes, President Mr. Robert W. Anania, Director National Bank of Geneva Geneva, New York Mr. Robert K. Hynes, Vice Chairman Mr. Justin L. Vigdor, Director Bankers Trust Company of Western New York Jamestown, New York Mr. Paul B. Sullivan, President Mr. Carl M. Fredeen, Executive Vice President First National Bank of Jamestown Jamestown, New York  2  6  so Mr. David Baroody, Senior Vice President Mr. Peter Roberts, Vice President Manufacturers Hanover Trust Company/ Genesee Region Rochester, New York Mr. James J. Young, Group Vice President Mr. H. Scott Norris, Director Central Trust Company Rochester, New York Mr. Wilbur Beh, Vice President and Cashier Mr. John Leach, Vice President First National Bank of Rochester Rochester, New York Mr. William B. Webber, Chairman of the Board and Chief Executive Officer Lincoln First Bank of Rochester Rochester, New York Mr. Arthur M. Richardson, President and Chief Executive Officer Security Trust Company and Security New York State Corporation Frederic J. Buse, First Executive Vice President Security New York State Corporation Rochester, New York Mr. Harry J. Sullivan, President Mr. John F. Vosburg, Director Salamanca Trust Company Salamanca, New York  Mr. Harry F. Martin, President Chase Manhattan Bank, N.A. (Buffalo) Buffalo, New York Mr. Martin F. Birmingham, President (Possibly a director, also) Marine Midland Bank (Rochester Region) Rochester, New York Mr. Vincent J. Nielsen, Regional President Mr. Paul M. Branch, Director Bank of New York (Southwest Region) Olean, New York  Federal Reserve Bank of New York Mr. Paul A. Volcker, President Mr. Fred W. Piderit, Jr. Senior Vice President Mr. Thomas C. Sloane Senior Vice President Mr. Peter Bakstansky, Vice President Mr. Ronald B. Gray, Vice President Mr. Frederick C. Schadrack, Jr., Vice President Mr. Franklin T. Love, Manager Bank Relations Department Mr. Carl H. Allen, Special Assistant Mr. Arthur W. Samansky, Special Assistant Mr. Alfred A. Bevacqua, Jr., Special Representative Mr. Raymond C. Laverty, Special Representative  Buffalo Branch  Mr. William M. Thompson, Senior Vice President Mr. William G. Thompson, Director The National Bank of Savannah Savannah, New York  Mr. John T. Keane, Vice President & Branch Manager Mr. Robert J. McDonnell, Assistant Cashier Mr. W. Raymond Gatgens, Special Representative  Mr. Theodore P. Capron, President The First National Bank of Wayland Wayland, New York  Press  Mr. Donald E. Cielewich, Regional President Mr. Gerald C. Saltarelli, Director Marine Midland Bank (Western Region) Buffalo, New York   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  No count at this time. Bankers and/or directors Federal Reserve Bank of NY Buffalo Branch Total  54 11 3 68  Mr. McDonnell made arrangements for 63 to eat. This will be changed the first part of the week.  FEDEBilL FiESEME 13FiNK OF NEW YEIFili 33 Liberty Street, New York, New York 10045  FOR RELEASE:  Public Information 212 791 6141  'r  6143  WEDNESDAY, NOVEMBER 17, 1976  NEW YORK FED SPONSORS MEETINGS FOR MEMBER BANKERS IN NORTHWESTERN NEW YORK  NEW YORK--The Federal Reserve Bank of New York on Wednesday will hold meetings in Batavia and Syracuse for member commercial banks in the northwestern portion of the Second Federal Reserve District. The meetings are part of a continuing series held throughout the district to enable Reserve Bank officials and senior commercial bankers to exchange views on a variety of current topics. At Batavia and Syracuse, Paul A. Volcker, president of the New York Fed, will review recent economic conditions and monetary policy; Thomas C. Sloane, senior vice president, will discuss New York Reserve Bank services and Federal Reserve membership, and Frederick C. Schadrack, vice president, bank supervision and relations, will focus on the current banking situation in the state.  -0-   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  REGIONAL MEETINGS ITINERARY FOR MR. VOLCKER  November 15, 2:30 p.m.  Leave Bank by automobile  3:30 p.m.  Arrive Hilton Inn, Tarrytown, New York (914-631-5700)  3:30 p.m.  Registration for guests and coffee  4:00 p.m.  Meeting starts  6:00 p.m.  Formal meeting concludes  6:30 p.m.  Dinner  7:30p.m.  Leave Tarrytown for home by Bank automobile  November 17, 1976   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  7:00 a.m.  Leave home by Bank automobile for LaGuardia  7:55 a.m.  Leave LaGuardia on Allegheny Airline Flight 127  8:56 a.m.  Arrive Buffalo  9:00 a.m.  Leave Buffalo Airport in Branch automobile for Batavia. (Mr. Sloane arrives at Buffalo at 8:58 a.m. on Allegheny Airline Flight 189 and will ride to Batavia with Mr. Volcker).  9:45 a.m.  Arrive Holiday Inn, Batavia, New York (716-343-1440)  10:00 a.m.  Meeting starts  12:00 Noon  Formal meeting concludes  12:30 p.m.  Lunch  1:30 p.m.  Leave by automobile en route to Syracuse  4:00 p.m.  Arrive Ramada Inn, Syracuse, New York (315-457-8670)  Or'  2  4:00 p.m.  Registration for guests and coffee  4:30 p.m.  Meeting starts  6:30 p.m.  Formal meeting concludes  7:00 p.m.  Dinner  00 8:26 p.m.  2 )5_gla3 p.m.  o 6, —111-.20 p.m.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Leave Ramada Inn by automobile to Syracuse Airport Leave Syracuse on kl-trgtVm7—*I.T44-ite Flight ,41/9 S-910 04. 4-4045 Arrive,Kem4444y, Protection Division will provide transportation from airport to home   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Removal Notice The item(s) identified below have been removed in accordance with FRASER's policy on handling sensitive information in digitization projects due to copyright protections.  Citation Information Document Type: Newspaper article Citations:  Number of Pages Removed: 1  Riemann, Robert. "Economy In a Lull, Fed Chiefs Tell Bankers." Times Herald-Record (Middletown, NY), November 21, 1976.  Federal Reserve Bank of St. Louis   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  https://fraser.stlouisfed.org  MISC.  CIRCULATE: FEDERAL RESERVE BANK OF NEW YORK Mr. Timlen  40A.2-4/74   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Mr. cnaaracK  Mr. Sloane Mr. Bakstansky CORRES. FILES  November 24, 1976  ,r. William T. Leese President irst National rank of East Hampton t Hampton, New York  11937  Bill: I appreciate your taking the time to write us egarding our communication efforts among member banks. edless to say, we benefit greatly from gatherings such the one in Tarrytown, but it is always encouraging to ear reports from the other side. It was a pleasure to meet you, Ton Behringer, et al, and we look forward to more regular visits with you. Sincerely,  Paul A. Volcker  MLK/jkz  10045  J4. 11. . 4.  . p  •  FIRST NATIONAL  A  -  4  /4.445-eS/  EAST HAMPTON • NEW YORK 11937  WILLIAM T. LEESE PRESIDENT  S16.324-2000   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  November 23, 1976  Mr. Paul Volcker, President Federal Reserve Bank of New York 33 Liberty Street New York, N.Y. 10045 Dear Paul: On behalf of Tom Behringer and myself may I express our appreciation for having been invited to the meeting at Tarrytown on November 15th. Meetings of this type definitely help improve the communication link between the Fed and the membership. Possibly we can look forward to getting together on a regular basis. Our thanks to you and your associates. Sincerely,  President WTL/brs  I 1978 ANSWFRED 417-EIVDED T '''''  44.  •  REGIONAL MEETING - THE HILTON INN TARRYTOWN, NEW YORK NOVEMBER 15, 1976  PROGRAM SCHEDULE  3:30 - 4:00 p.m. 4:00  4:05 p.m.  Registration - Coffee and Soda Welcome Remarks and Introduction - Mr. Piderit  4:05 - 4:25 p.m.  Presentation - Mr. Schadrack "The Changing Competitive Environment for Banking in New York State  4:25 - 4:35 p.m.  Discussion  4:35 - 4:55 p.m.  Presentation - Mr. Sloane "Access to Federal Reserve Services and Membership"  4:55 - 5:05 p.m.  Discussion  5:05 - 5:35 p.m.  Presentation - Mr. Volcker General - "Economics, Monetary Policy, Legislation and Other Issues"  5:35 - 5:45 p.m.  Discussion  5:45 - 6:00 p.m.  Open Discussion  6:00 p.m.  Formal meeting concludes  6:00 - 6:30 p.m.  Reception  6:30 - 7:30 p.m.  Dinner  NOTE:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  In addition to the chief executive officer or his alteAate bankers were asked to invite one of their nonbanker directors or a local legislator.  •  •  REGIONAL MEETING - HILTON INN TARRYTOWN, NEW YORK NOVEMBER 15, 1976  CONNECTICUT  Bank  Attendees  Title  Norman Schaff, Jr.  Chairman of the Board  George F. Taylor  Exec. Vice Pres.  Frederick R. Miller  Exec. Vice Pres.  David W. P. Jewitt  Senior Vice Pres.  The State National Bank of Connecticut Bridgeport  Maureen M. Smith  Senior Vice Pres. and Comptroller  Connecticut Bank and Trust Company, N. A. Norwalk  Roger M. Keefe  Chairman  Charles E. Poulin  President  Richard M. Sontag  President  Charles J. Menge  Vice President  Robert E. Murray  President  The City National Bank of Connecticut Bridgeport  The Connecticut National Bank, Bridgeport  Liberty National Bank Stamford  • Westport National Bank Westport   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  S  NEW YORK  Bank The Fishkill National Bank Beacon  Attendees  Title  Foster S. Cunningham  President  Edward vK. Cunningham, Jr.  Counsel  Valleau C. Curtis  Chairman of the Board  Vincent Zanetti  President  Marigrace Blanks  Exec. Vice Pres.  Wayne Blanks  Vice President  Peninsula National Bank Cedarhurst  Nicholas Balzano  Exec. Vice Pres.  The Chester National Bank Chester  W. Terry Malloy  Senior Vice Pres./ Cashier  Donal O'Sullivan  Vice President  Dover Plains National Bank, Dover Plains  Thomas J. Boyce  President  First National Bank of East Hampton East Hampton  William T. Leese  President  Thomas E. Behringer, Jr.  Director  United National Bank Callicoon  Putnam County National Bank, Carmel  • The First National Bank of East Islip East Islip  Richard J. Gray  Exec. Vice Pres.  Henry Hocker  Director  Hempstead Bank Garden City  Robert E. Scheuing  President  Long Island Trust Company Garden City  Arthur Hug, Jr.  Chairman and Pres.  Willard G. Hampton  Chairman of Exec. Committee  Jim Bolster  President and Chairman of Board  Nassau Trust Company Glen Cove   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  21  Bank  Attendees  The First National Bank of Glen Head Glen Head  Vanguard National Bank Hempstead  Long Island Bank-  Title  Anthony D. Famighetti  Chairman of the Board  Edward F. McAdams  President  C. Merolla  President  Howard Cohen  Director  1P  ors .  Ri.--Iterre1-14.&64a  -V4cc Prcol4e.3.n-t-  The First National Bank of Jeffersonville Jeffersonville  August Lott  Director  Gilbert E. Weiss  Exec. Vice Pres.  The Sullivan County National Bank Liberty  Robert J. Ernst  President  Glenn H. Hanson  Senior Vice Pres.  J. Halsey Decatur  President  William D. Spain  Director  Eugene H. Morrison  Chairman of the Board  Albert J. Juliano  President  Edward M. Mitchell  Director  Manufacturers Hanover Trust, Monroe  John Luft  Vice President  Nanuet National Bank Nanuet  James D. Raglan  President  John E. Stefan  Exec. Vice Pres.  Harold Saf  President  David E. Tower  Bank Attorney  The Mahopac National Bank Mahopac  Orange County Trust Company Middletown  The Columbus Trust Company Newburgh   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  -3-  0  Bank  Attendees  Title  Arthur W. Schmidt, Jr.  Chairman of the Board  Norman MacBeth  Director  Robert F. Macfarland  President  Paul H. Engels  Exec. Vice Pres. and Cashier  John H. C. Whicker  President  Thomas W. Cashel  Director  Bessemer Trust Company, N. A. New York City  John R. Whitmore  President  Robert C. Elliott  Vice President•  Capital National Bank of New York New York City  Raymond S. D. Yoh  Chairman of the Board  Carlos A. Cordova  President  Victor F. Condello  Chairman of the Board  Merton Corn  President  Freedom National Bank New York City  M. Frederick Brown  Vice President/ Cashier and Directc  Hartford Trust Company of New York New York City  Michael T. Curley  Vice President  Schroder Trust Company New York City  Mark J. Maged  Vice Chairman  Burgis B. Coates  Senior Vice Pres.  Jerome D. Twomey  President  John J. Fowler, Jr.  Exec. 'Vice Pres.  Empire National Bank Newburgh  Highland National Bank of Newburgh Newburgh  Barclays Bank of New York, New York City  Chelsea National Bank New York City  -::3terling National Bank and Trust Company New York City   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  4  0  Bank  Attendees  Title  The First National Bank of North Tarrytown North Tarrytown  John J. Hughes  President  Chemical Bank Hudson Valley, N. A. Nyack  J. Gordon Compton  President  Kenneth M. Mueller  Senior Vice Pres. and Cashier  The National Bank ... of Pawling Pawling  H. B. Twombly, Jr.  Exec. Vice Pres.  Bank of Smithtown Smithtown  Irving Schechter  President  William Bowen  Vice President and CcmIptroller  Thomas A. Doherty  President  Fred C. Zorn  Director  The Valley National Bank, Wallkill Wallkill  Fred. C. Terwilliger  President  S. LaVerne Hastings  Exec. Vice Pres. and Cashier  National Bank of Westchester White Plains  James R. Hand  Chairman  Stephen A. Matuszak-  President  Sidney 0. Thompson  Chairman of the Board  John A. Pratt, Jr.  President  Bank of Suffolk County Stony Brook  Hudson Valley National Bank Yonkers   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Regional Meeting, Hilton Inn, Tarrytown, New York November 15, 1976  FEDERAL RESERVE BANK OF NEW YORK ATTENDEES  Paul A. Volcker  President  Fred W. Piderit, Jr.  Senior Vice President  Thomas C. Sloane  Senior Vice President  Peter Bakstansky  Vice President  Ronald B. Gray  Vice President  Frederick C. Schadrack  Vice President  Joseph M. O'Connell  Assistant Vice President  Franklin T. Love  Manager  Carl H. Allen  Special Assistant  Alfred A. Bevacqua, Jr.  Special Representative  Robert J. Branch  Special Representative  Bruce A. Cassella  Special Representative  Raymond C. Laverty  Special Representative  Arthur W. Samansky  Special Assistant   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  GROUND TRANSPORTATION ARRANGEMENTS REGIONAL MEETINGS NOVEMBER 15, 1976  New York City to Tarrytown  Tarrytown to Home  Car 1 - Mr. Allen (Leave Bank at 1:00 p.m.)  Car 1 - Protection (Leave Tarrytown at 7:30 p.m.)  1.  Mr. Love  1.  Mr. Volcker  2.  Mr. Samansky  2.  Mr. Bakstansky  3.  Mr. Schadrack  Car 2 - Mr. Laverty (Leave Bank at 1:00 p.m.)  Car 2 -Protection (Leave Tarrytown at 7:30 p.m.)  1.  Mr. Branch  1.  Mr. Piderit  2.  Mr. Cassella  2.  Mr. Samansky  Car 3 - Mr. Gray (Leave Bank at 2:30 p.m.)  Car 3 - Mr. Laverty (Leave Tarrytown at 7:30 p.m.)  1.  Mr. Piderit  1.  Mr. Sloane  2.  Mr. Schadrack  2.  Mr. Cassella  Car 4 - Protection  Car 4 - Mr. Allen  (Leave Bank at 2:30 p.m.)  (Leave Tarrytown at 7:45 p.m.)  1.  Mr. Volcker  1.  Mr. Love  2.  Mr. Sloane  2.  Mr. Branch  3.  Mr. Bakstansky   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  FEDERAL OF  fib OFFICE  RESERVE NEW  YORK  CORRESPONDENCE DATE  Mr. Volcker  SUBJECT  September 23, 1976  Regional Meetings  Peter Bakstansky  I wanted to alert you before you left that we have been planning for the Regional Meetings to be held October 22, November 15 and November 17. As we discussed, I think it desirable for you not to speak from a prepared text but rather discuss a number of broad topics, as you did at the New Jersey meetings. We think it would be appropriate for you to cover the following general areas: 1. 2. 3. 4.  Regional and national economics, monetary policy, pending national and state legislation, other current concerns of the System.  I am sending copies of this memorandum to Messrs. Davis and Oltman and am asking them to prepare background material for you. The other speakers on the program will be Mr. Timlen, whom we are asking to discuss "The Question of Membership: Pricing Access and Services" and Mr. Schadrack, whom we are asking to discuss "The Changing Competitive Banking Situation in New York". Mr. Timlen will not be at the November 15 meeting and we are asking Mr. Sloane to substitute for him on that date. PB/mdw cc: Messrs. Timlen Guy Piderit Sloane Davis Gray Oltman Schadrack Hoenig Love Allen Samansky   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  BANK  :• OF  YORK  OFFICE CORRESPONDENCE  • To  DATE Those Listed Below  T. Love ROM Fe T  September 13, 1976  SUBJECT: Regional Meetings - Fall 1976  •  In view of a change in Mr. Volcker's schedule, the regional meeting originally scheduled for November 8, 1976 in the New York City area is now scheduled for Monday, November 15, 1976 at 4:00 p.m..  Arrangements have been made to hold this  meeting at the Hilton Inn, Tarrytown, New York. Since it is our understanding that Mr. Timlen will not be able to attend the November 15 meeting, we suggest that Mr. Sloane be asked to fill in for him.  FTL/dm  cc:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Messrs:  Piderit Sloane Bakstansky Gray Keane  Schadrack Hoenig McDonnell Allen Samansky   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  REGIONAL MEETING October 22, 1976  r rj  if,{,e;yglow  64eze,f,(-  /.i, /  . Hi/ -', li "iP •  4.1Aer%  ‘e-f-te  - fix..4441  :P17/..4164—  (if-t'itt (:;g; *1,1444 6  /PIA.  21672;fela —  4604 te,01 log Vidw.149, f4A-  /1404-Ati;  •  /   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Xo-c a.e.t  eoaiiiipe •  rb-if  ,gott 074  t(4foa  /1, 40-1A-40/44, tiZt?•,;  ,w,10-(.0,14a4itit ahat44'  f'  cat.tittoitzt, 44,1 4-4/0Cii (i*  •..41/4a •  •  -  •  1  "(1 r;  ye  Aeottat94Oetivork / 411..  czef ex.  /fte 1.-  ttt, 4?'I  Ugtoga,,z.  91Y40,1( agweke :04 -exii; - c-4/464-01 _ &)-eveof, ,u(444,  95 90  42 TOTAL  85  40  %ft  36  10  34  65 111111111111 111111111111111111111111111111111111111111111111111  11111111111111111111111111111111111111111111111111  1 1 ASOND 1 FM AI41 IA SONO 1975 1916  32 30  1.5 7.0 65 6.0  EXCLUDING BANKERS' ACCEPTANCES  V  Oct 13 w-  • • , ‘.....  I  MI11111111 11111111111111111111111111111.1111111.1111111111111111 11111111111111,111111111111111611U11111 1111111th  SELECTED MONEY RATES WEEKLY  Percent 10.0  8.5 8.0  N •% N  ONDIFMAill 1 ASONDIFNANI IAS'D N II 1974 1915 1916  LONG-TERM INTEREST RATES WEEKLY 9.5 9.0  TOTAL  38  15  ONDI FRIA 1974  •--/-  Oct 13  EXCLUDING BANKERS' ACCEPTANCES  80  60  12  WEEKLY REPORTING BANKS NEW YORK CITY SEASONALLY ADJUSTED Billions _ of dollars 44  NEW YORK CITY  SEASONALLY ADJUSTED Billion_of dollars  Percent  RECENTLY OFFERED Aaa RATED BOND ISSUES , 14 Skm,....s00  - U.S. GOVT. SECURITIES64  STATE AND LOCAL GOVERNMENT BONDS Aaa RATED  5.5 5.0 III! II III  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  BUSINESS LOANS INCLUDING LOAN SALES TO AFFILIATES  BUSINESS LOANS INCLUDING LOAN SALES TO AFFILIATES WEEKLY REPORTING BANKS OUTSIDE  1975  13 12 11 10 9  AA  8  1 4  1 6  DISCOUNT RATE FRBNY  3-MONTH C/D's v"ikErmr.  3-1ONTI1 5 TREASURY BILLS 4 — oond yield equivalent 3 indildinhiliwilmilinhaffiliiii1111111111111"tifittiubiiiiitimbdutimihnian milldimbilhuhusLdmi,„imi 1914 19 1915  Oct 13 Oct 20  I  I  I  I  I  I  1976  I  I  I  I  I  •  frytePtjee3  .0  de   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -  :1titif,.41WIVAY  r •  r IS.1  , 01 ‘ 1 •1,  r  •  11  0  MONEY SUPPLY GROWTH RATE Percent 12 M1 10 8 6 4 2 0 12 M2 10 8 6 4 2 0 1955-64 1964-71 1972 AVERAGE AVERAGE   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Mt NARROW MONEY SUPPLY SEASONALLY ADJUSTED Billions of dollars  315 310 305  7.0  Oct 6  300 295 290  4.5  Percent changes (at annual rate)  20 15 10 5  9.5 1.5  FOUR WEEKS EARLIER  THIRTEEN WEEKS EARLIER  1973  1974  1975  1970 FIRST HALF  TARGET RANGES 2ND QUARTER 16 2ND QUARTER 77  M  F  AM  M2: BROAD MONEY SUPPLY SEASONALLY ADJUSTED Billions of dollars  740 730 120 710 700 690 680 670 660  Oct 6  Percent changes (at annual rate)  20 15 10 5 0  THIRTEEN WEEKS EARLIER 0.0  FOUR WEEKS EARLIER  JF  M  AM  I  IA 1916  S  ON  0  I  IA 1976  •  REGIONAL MEETING - TURF INN COLONIE (ALBANY) NEW YORK OCTOBER 22, 1976  PROGRAM SCHEDULE  10:00 - 10:30 A.M.  Registration - coffee and danish  10:30 - 10:35 A.M.  Welcome remarks and introduction - Mr. Piderit  10:35 - 10:55 A.M.  Presentation - Mr. Schadrack "The Changing Competitive Banking Situation in New York"  10:55 - 11:05 A.M.  Discussion  11:05 - 11:25 A.M.  Presentation - Mr. Sloane "The Question of Membership: Pricing Access and Services"  11:25 - 11:35 A.M.  Discussion  11:35 - 12:05 P.M.  Presentation - Mr. Volcker General -"Economics, monetary policy, legislation and other issues"  12:05 - 12:15 P.M.  Discussion  12:15 - 12:30 P.M.  Open Discussion  12:30 P.M.  Formal meeting concludes  12:30 -  1:00 P.M.  Reception  1:00 -  2:00 P.M.  Luncheon   https://fraser.stlouisfed.org p Federal Reserve Bank of St. Louis  REGIONAL MEETING - TURF INN COLONIE (ALBANY) NEW YORK OCTOBER 22, 1976  Bank  Attendees  Title  Bankers Trust Company of Albany, N.A. Albany  George E. Hanner  Executive Vice Pres.  Charles Buchman  Director  Chemical Bank Eastern, N. A. Albany  John J. Brunner  President  First Commercial Banks, Inc. Albany  Curtis M. Carlson  Executive Vice Pres. and Treasurer  State Bank of Albany Albany  Frank H. Odell  President  Martin H. Heck  Executive Vice Pres.  William C. Schutt  President  Walter K. Murray  Director  Robert E. Cook  President  Paul B. Thompson  Vice President  Ballston Spa National Bank Ballston Spa  James Whelden  President  LeRoy N. Hodsoll  Vice President and Trust Officer  Central National Bank Canajoharie  William Lathers, Jr.  Chairman of the Board and President  Herbert R. Kling  Director  John A. MacNaughton  Executive Vice President  Union National Bank Albany  The First National Bank Amenia  The National Bank of Coxsackie Coxsackie   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -2-  •  flank  Attendees  Title  Delaware National Bank of Delhi Delhi  Howard S. Dickson  Vice President  Raymond G. Roach, Jr.  President  Ellenville National Bank Ellenville  Clifford K. Calhoun  President  J. William Lempka  Executive Vice Pres.  Richard Lynch  Director  R. F. Heyler  Vice President  William T. Clark  President  William L. Bitner III  Director  Robert P. Larson  President  John J. Goetz  Director  Lloyd Politsch  President  Paul E. Smith  First Vice President and Trust Officer  The First National Bank of Highland Highland  Joseph Alfano  President  George A. Alfano  Executive Vice Pres.  Bankers Trust Company of Hudson Valley, N.A. Kingston  Robert H. Brome  Chairman and President  Edward S. Finnegan  Executive Vice Pres.  Robert L. Walker  Treasurer  John Shults, Jr.  Director  James F. Dwyer  President and Trust Officer  Deak National Bank Fleischmanns  First National Bank of Glens Falls Glens Falls  Glens Falls National Bank and Trust Company Glens Falls  City National Bank and Trust Company Gloversville  Kingston Trust Company Kingston  Rondout National Bank Kingston   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -3  411  Bank  Attendees  Title  National Union Bank of Kinderhook Kinderhook  Allen J. Thomas Jr.  President  The Herkimer County Trust Company Little Falls  William E. Cotter  Executive Vice Pres.  Richard L. Collins  Vice President  The Little Falls National Bank Little Falls  Frederick G. Teall  President  G. Ruport Palmer, Jr.  Director  Citizens National Bank Malone  0. K. Guerin  Executive Vice Pres.  John C. Kimberley  Vice President  Bank of Millbrook Millbrook  Paul V. Knoblauch  Vice President  Wilber National Bank Oneonta  Robert W. Moyer  President  Dutchess Bank and Trust Company Poughkeepsie  Gerard E. Dahowski  Vice President and Controller  Matthew D. Lampell  Director  First National Bank of Red Hook Red Hook  Lloyd Hapeman  President  Donald E. Norton  Chairman  First National Bank of Rhinebeck Rhinebeck  Michael A. Fichera or Ronald W. Miller  President  Mohawk National Bank Schenectady  John W. Reid  President  J. Lynn Kellam  Director   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Vice President and Cashier  _ .  -4-  Bank The Schenectady Trust Co. Schenectady  First National Bank of Scotia Scotia  First National Bank in Sidney Sidney   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Attendees  Title  Peter D. Marquis  Vice President  Lewis Golub  Director  K. E. Buhrmaster  Chairman  L. H. Buhrmaster  President  Borden C. Getman  Acting President  Robert K. Perkins  Vice President  •  • Regional Meeting, Turf Inn, Colonie (Albany) New York October 22, 1976  FEDERAL RESERVE BANK OF NEW YORK ATTENDEES  Paul A. Volcker  President  Fred W. Piderit, Jr.  Senior Vice President  Thomas C. Sloane  Senior Vice President  Ronald B. Gray  Vice President  Frederick C. Schadrack  Vice President  Franklin T. Love  Manager  Carl H. Allen  Special Assistant  Alfred A. Bevacqua, Jr.  Special Representative  Robert J. Branch  Special Representative  Bruce A. Cassella  Special Representative  Raymond C. Laverty  Special Representative  Arthur W. Samansky  Special Assistant   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  .  0  .   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  CHARTS presented at  REGIONAL MEETING OF SECOND FEDERAL RESERVE DISTRICT MEMBER BANKS IN COLONIE, NEW YORK October 22, 1916  Prepared by  Federal Reserve Bank of New York   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  • TABLE OF CONTENTS Chart No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40  Real GNP in Postwar Recoveries Changes in Real GNP Changes in Real Consumption Real Inventory Investment Changes in Real Residential Construction Changes in Real Business Fixed Investment Real Business Fixed Investment in Post War Recoveries Retail Sales Retail Sales Excluding Automotive Domestie Automible Sales and Production Housing Starts Industrial Production Unemployment Rates Labor Force and Employment Lengths of Postwar Cyclical Expansions Inventory-Sales Ratios Measures of Capacity Utilization Short-Term Interest Rates in First 18 Months of Recovery Plant and Equipment Expenditures New York City: Payroll Employment Government Employment Private Employment Unemployment Rates Retail Sales New York City: New Housing Units Based on Permits Issued New York State Civilian Employment New York State Unemployment Rates New York State Retail Sales New York State Payroll Employment Unemployment Rates Implicit GNP Price Deflator Total Consumer Prices Consumer Prices: Food Consumer Prices: Excluding Food and Energy Wholesale Prices: Total Industrial Wholesale Prices Spot Commodity Prices Money Supply Growth Rate Ml: Narrow Money Supply M2: Broad Money Supply (CONTINUED)  Page No. 1 1 1 1 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9  9 10 10 10 11 11  11   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  • 41 42 43 4I  Business Loans Including Loan Sales to Affiliates Business Loans Including Loan Sales to Affiliates Long-Term Interest Rates Selected Money Rates  12 12 12 12  REAL GNP IN POSTWAR RECOVERIES  CHANGES IN REAL GNP  CYCLICAL TROUGH =100  ANNUAL RATE  Percent  Percent  120 118 116 114 112 110 108 106 104 102 10  HIGHEST AVERAGE CURRENT RECOVERY LOWEST  3  4  5  1970  QUARTERS AFTER CYCLICAL TROUGH  1971  1972  1913  1974  CHANCES IN REAL CONSUMPTION  REAL INVENTORY INVESTMENT  SEASONALLY ADJUSTED ANNUAL RATES  SEASONALLY ADJUSTED ANNUAL RATES  Billions of 1912 dollars  III  10 5  111  0 -5 -10 -15  I  I  I  1910  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  I  I  1911  I  1975  1976  Billions of 1912 dollars  20 15  -20  12 10 8 6 4 2 0 -2 -4 -6 -8 -10  I  I  1912  I  I  I  1913  I  1914  1915  I  I  1916  25 20 15 10 5 0 -5 -10 -15 -20 -2SIjI -1910  III 1911  II 1912  III 1913  III 1914  LI1 1975  1976  •  CHANGES IN REAL BUSINESS FIXED INVESTMENT  CHANGES IN REAL RESIDENTIAL CONSTRUCTION  SEASONALLY ADJUSTED ANNUAL RATES Percent 50 40  SEASONALLY ADJUSTED ANNUAL RATES Percent 30 2P  30 10  -  20 10  _  0  ii  -  11111111  —1 —2 —3 —4  —20  ILl  Ill  III  Ill  Ill  ILL  Ill  1910  1971  1972  1973  1974  1975  1976   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  im Ii  —10  —30 III 1910  1911  III  Ill  Ill  Ill  Ill  1912  1913  1914  1915  1916  10  REAL BUSINESS FIXED INVESTMENT IN POST WAR RECOVERIES  TROUGH=100 Percent 130 125 120 115  0,, 1949-53 ,— _ , -0 — _a._ — , , , '`)---,t,-, / / // / / 958O 1954-51 / / \/ 53  110 1961-69 105 100 95  , / l/ \— i  „ 1970-73  1975-76 I tLJ I 9 3 4 5 6 1 8 QUARTERS AFTER TROUGH  I 10  11  12  2  S  RETAIL SALES  RETAIL SALES EXCLUDING AUTOMOTIVO  SEASONALLY ADJUSTED  Billions of dollars  60  50 Sep  55  45  Sep —  _  50  40  CURRENT DOLLARS  45  CURRENT DOLLARS  35  40 35  ®  SEASONALLY ADJUSTED  Billions of dollars  30 r.,......... /  ./.../P1. ,4 oe'N.fti  \-"# CONSTANT DOLLARS 4'"  30 ---.•  pm,  111111111111111111111iiii11Ii1rilli iihiliihr iihillthi  1972  1913  1974  1975  20  iii i hi ii  1971  1976  DOMESTIC AUTOMOBILE SALES AND PRODUCTION  HOUSING STARTS  SEASONALLY ADJUSTED ANNUAL RATES  SEASONALLY ADJUSTED ANNUAL RATES  Millions of cars  .11m  CONSTANT DOLLARS' January 1969=100 'H11111111 1111111w! iihuliilii 1912 1973 1974 1975 1976  25  January 1969 = 100  25 111111111H 1971  Millions of units  10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.6   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  3  2.5 A  2.0  TOTAL Sep  1.5 1.0  SINGLE FAMILY II  ‘ t..1 ''--"-/ v V".r" MULTIFAMILY ,.,  i‘‘  .5 1 eodm".""N.•1—CNv1 %...o"....,•••.f 1  1  1  1  „I 1974 1  iii I ii I  1975  I  I  I  1976  0 L111111111 A411111_1111 11111111111 1911 1972 1973  1974  1915  111111111H 1976  4  INDUSTRIAL PRODUCTION  UNEMPLOYMENT RATES  SEASONALLY ADJUSTED, 1961=100 Percent  •  Percent  140 135  10 9 Sep  Sep  130 125  TOTAL 6 5 4 3 •—......,—,,,_\,„... MARRIED _...... I 13 MEN 2 15-WEEKS OR MORE ....,-  120 115 110 105 100  _  / v •% / % "t '4. // --,,, / ., .-••  1 1911  1912  1913  I 111111 HI LILL] lit 11111111h 1914 1915 1976  1911  1973  1974  1975  1916  LENGTHS OF POSTWAR CYCLICAL EXPANSIONS  8  LABOR FORCE AND EMPLOYMENT  1972  SEASONALLY ADJUSTED Millions of persons 100  1949-53 1954-57  95 CIVILIAN LABOR FORCE  1958-60  90 85  1970-13 sim —  15  NONFARM PAYROLL EMPLOYMENT  70  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1960-69  CIVILIAN EMPLOYMEN  80  v.••••`.:1•:-.;.F.:,  tilt lilt iL911i 11  1972  tilitl ih  .1913  1975-  1915  •  0  I LI  1974  I?  1916  10  20  4'0  ' 50I 60 MONTHS  fi0  0 100 110  INVENTORY-SALES RATIOS  MEASURES OF CAPACITY UTILIZATION  SEASONALLY ADJUSTED  SEASONALLY ADJUSTED  Months of sales  Percent  2.60 2.40  100 95 MANUFACTURING DURABLES  2.20  ....  Aug  2.00  90 85  1.80  MANUFACTURING NONDURABL S  1.60  80 15  TRADE r\--.N.  1.40  .../ ..I • . ..\.., . , : s , , ' "`•-• '  1.20 1.00  •  10  Ne, ••-•-•-t-iyA. •  H111111111  H1111111H  HIHIHIll  HI11111111  HIHIIIIII  111H111111  1911  1972  1973  1974  1915  1976  65  ,.........."............  MATERIALS CAPACITY , UTILIZATION ,, , INDUSTRIAL CAPACITY V ,,-# UTILIZATION 1, , , --,* % . , % %. . i , ---N  N  L  I  I  _I_  I  I  1976  1975  1974  1973  L I  I  I  SHORT-TERM INTEREST RATES IN FIRST 18 MONTHS OF RECOVERY  PLANT AND EQUIPMENT EXPENDITURES  4-6 MONTH PRIME COMMERCIAL PAPER RATE  COMMERCE DEPARTMENT SURVEYS  Percent 2.20  Percent 2.80 2.60  1949 51  200 180 1.60 1.40 120  1954-55  Percent 5.00 4.50  2.40 2.20  4.00  2.00  3.00  1,80 1.60  2.502.00  1.40  1.50  Billions of dollars 1958-59  125 120  3.50  115  1.00 100 11_11111JL1_4_1111111  Percent 340  Percent 1961 62  320  000 -  11111111111111111  110  1918.12  100  3.00  105  6.00  2.80  5.00  2.60   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  111111111111111H  Hi! it' ti  4.00 tilt tiNit ti tit tilt  100 95  _ 1913  I  Ii  1974  I  I  1975  I  I  I  1976  I  5.  6  GOVERNMENT EMPLOYMENT  0  NEW YORK CITY: PAYROLL EMPLOYMENT SEASONALLY ADJUSTED Millions of persons  3.9 3.8  • ®  SEASONALLY ADJUSTED 1910=100 Index  125 ' \ 120  ,  3.1  115  3.6  \  UNITED STAT' ES ‘  110  35  \.X  105  3.4  A  I.,  100 ..  3.3  NEW YORK CITY  1%-/- %.  95  3.2  „„ .... Jun  Jun  3.1 • . \ 3.0 1950 52 54 56 58 60 62 64 66 68 70 72 14 16 111111111111111111111111141111lik  1111111[1111111111111111111hIlinIL1111111 ItIL1111111  90 85  '  1 Sep  110  •  .....„.  1974  1915  1976  1. . . , , ,„  k 1& . L  ......-... N..  bQ •  1910  8  1912  1913  NEW YORK CITY "--,  &  1914  %  6 5 ....,....„. Aug  N.k.\\%.• .%1,1 11111111 Hill 11111  1911  7: , r  Aug Sep  .cl  \ :  NEW YORK CITY \\ :\ \\  k%kb..§‘O.  N. .  9  k  9 k\\\\  /  10  ..  9  N  12 11  '4 \  UNITED STATES   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1973  Percent  1151  8  1912  SEASONALLY ADJUSTED  Index  8  1971  UNEMPLOYMENT RATES  SEASONALLY ADJUSTED 1910=100  10  k,.N .1 iiiii Hill iiiii il ii il it itiii,. % 1910  PRIVATE EMPLOYMENT  10  \ 111111 11 II Hill ii  1915  1916  •  A. \1"  4-' .  it'‘,..° _ I  .•%.  & •  UNITED STATES & 4 .ss \ 1 3 N111111111111 iiiiiiiiiii 111[111111 `t iiiii ii II li Illil 1970 1911 1912 1913 1974 1975 1916  •  . 7  NEW YORK CITY: NEW HOUSING UNITS BASED ON PERMITS ISSUED  RETAIL SALES SEASONALLY ADJUSTED 1973=100  NOT SEASONALLY ADJUSTED  Index  120 115 110 105 100 95 90 85 80 75 70  Thousands of units  DOLARNIli  \\.  9  N NI \ . \\, 1 Aug \  UNITED STATES \N • ,NO. \ 1  ' '\  ‘ -..........-„,,,vA‘1-  NEW YORK CITY .N  \ k' 1,1„1 ,‘ „it \' , . „I„ii, 1,1,111,1,, 1973  1974  1915  1959 60 61 62 63 64 65 66 67 68 69 70 71 72 13 74 15 76  1976  NEW YORK STATE CIVILIAN EMPLOYMENT  NEW YORK STATE UNEMPLOYMENT RATES  ®  SEASONALLY ADJUSTED  SEASONALLY ADJUSTED 1910=100 Index  Percent  110 Aug r./ c--e” V  OUTSIDE NEW YORK  105  12 11  Aug  10  NEW YORK CITY  ••••  100  ,^‘  9  Soo  V  8  95  ..•  NEW YORK CITY 90  6  •  , „ i ,, OUTSIDE __J 4 , NEW YORK CITY / 3 )-iiIiiiiiii Iiiiiiiiiii iiiiiiithilidiliiiluiduildil 1914 1911 1912 1913 1910 5  85 80  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  ®  II 1970  11 11 1111 11 11 1111 11111111 11 11 II lt 11 11 11 11 11 11 11  1911  1972  19/3  1974  1975  1976  1915  1916  8  NEW YORK STATE RETAIL SALES  NEW YORK STATE PAYROLL EMPLOYME.  SEASONALLY ADJUSTED, 1913=100  SEASONALLY ADJUSTED'  Index  Millions of persons  105  CONSTANT DOLLAR  7.4 7.2 7.0 \ 6.8 6.6 6.4 6.2 6.0 5.8 5.6 5.4 nth, 1950 52 54 56 58 60 62 64 66 68 70 12 74 76 N  \  \  100  NEW YORK CITY \  95  N  2nd  \\/ OUTSIDE NEW YORK CITY  90  \ \  A / / V 1 %Jul  Aug  ii  \  \  85  \  80  iii ii  i  hill! iii  iiii  1973  19:14  liii  1915  ii  till iliill! 1916  111111111111111111111111111111[114,1ffilmirniiithidwill,H6Irniudio  UNEMPLOYMENT RATE  IMPLICIT GNP PRICE DEFLATOR  SEASONALLY ADJUSTED  SEASONALLY ADJUSTED ANNUAL RATES OF CHANGE  Percent  Percent  11 10  16 14 Aug  9  12 N's  8  Sep  NEW YORK STATE  10  /  8 ii I  5 4 3   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  6 4  UNITED STATES  1  11 1971  1972  1973  1974  1915  1916  1910  1911  1912  1913  1914  1915  1976  uarter  TOTAL CONSUMER PRICES  CONSUMER PRICES: FOOD  CHANGE FROM 3 MONTHS EARLIER  CHANGE FROM 3 MONTHS EARLIER  9  Percent  Percent  16 14  35 30  12  25  10  20  8  15 10  6 • Sep From previous month  4 2   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  •  5 0 -5 !WWII!! 1971  SEASONALLY ADJUSTED  H111111111 1971  tilt iii I lii  1972  1973  H1111,1111 1974  iilitIH Iii iii H It iii i  1975  1916  SEASONALLY ADJUSTED  Iii  1972  CONSUMER PRICES: EXCLUDING FOOD AND ENERGY CHANGE FROM 3 MONTHS EARLIER Percent  16 14 12 10 8 6  Sep From previous month  4 2 0 111111111H 111111111H 11111111111 19/2 1913 1911  SEASONALLY ADJUSTED 11111 11IIII  1914  1975  1916  ilii Iii  iii Liii tiii  1913  Sep From previous month  1974  1975  1916  •  WHOLESALE PRICES: TOTAL  INDSUTRIAt WHOLESALE PRICES  CHANGE FROM 3 MONTHS EARLIER  II0  0  CHANGE FROM3 MONTHS EARLIER Percent  35  30 25 20  30 25  15 10  From previous month Sep •  15r  From premus month Sep •  A  5 0   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  20  1 5 SEASONALLY ADJUSTED it  1971  1972  1973  1974  I  1976  1975  SPOT COMMODITY PRICES WEEKLY; 1967=100 Percent  280 FOODSTUFFS  %•.oct 12  041 lL  180 160 140  RAW INDUSTRIAL COMMODITIES L11 t 1915  1976  SEASONALLY ADJUSTED  ri  1915  1916  • Questions for Yieetinr with representatives of Federal Reserve of N.Y. 10/22!76 1. Does the Federal Reserve of New York support the view of the Fed of T3oston that the time has come to seek lerislation to either provide for payment of interest on legal reserves or invest-lent of such funds in short term U.S. Government obligations held in lieu thereof or reduction in reserve requirements, particularly for time deposits. What action will the Federal Reserve of N.Y. take?  2. It can be said that non-payment of interest on member banks' reserves is the next thing to government appropriation of private bank assets with inadequate remuneration in the form of federal services to stockholders.  Because of the inequality existing vs. thrifts re reserve  requirements and their use of federal services, why should commercial banks maintain their membership in the Fed if relief isn't provided to earn interest on these reserves.  3. What would the Federal Reserve do if several member banks paid 5 1/4'.A on   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  regular savings after Public Law 94-200 expires March 1, 1977 if Reg. Q is continued by the Fed?  PUBbIC INFORMATION DEPARTMENT  410 ,/ (Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr.  Master list for the intra-bank distribution of press releases  Volcker Timlen A. Holmes Guy Piderit Sloane Braun Cooper Corrigan Davis Ege Fousek Gray Henderson Lloyd Meek (2) Puckett Schadrack Thoman Willey   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Mr. Mr. Mr. Mr. Mr. Mr. Ms. Mr. Mr. Mr. Ms. Ms. Mr. Ms. Ms. Ms. Ms. Ms. Ms. Ms.  Keane (2) Irwin O'Connell Thieke Anderson Bossy Cutler Levin Lucas Oppenheimer Burns Deuss (4) Backlund (5) Rhein (3) 835 Poniatowski Marino (3) Gregory Cantwell Cahn Whack  FEUEFifiL FiESEBUE CIF NEW YORK 33 Liberty Street, New York, New York 10045  Public Information 212 791 6141 or 6143  No. 1151 FOR RELEASE:  FRIDAY, OCTOBER 22, 1976  NEW YORK FED SPONSORS MEETING FOR MEMBER BANKERS IN NORTHEASTERN NEW YORK NEW YORK--The Federal Reserve Bank of New York Friday will hold the first of a series of four conferences in New York State for member commercial banks in the Second Federal Reserve District. The meeting, in Colonie, near Albany, is part of a continuing series held throughout the district to enable Reserve Bank officials and senior commercial bankers to exchange views on a variety of current topics. At Colonie, Paul A. Volcker, president, New York Fed, will revie w current economic conditions and monetary policy; Thomas C. Sloane, senior vice president, will discuss New York Reserve Bank services and Federal Reser ve membership, and Frederick C. Schadrack, vice president, bank supervision and relations, will focus on the current banking situation in the state. Additional meetings are currently planned in November in Tarry town, Batavia and Syracuse. -0-   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  M ISC. 136-10-  4/76  FEDERAL RESERVE BANK OF NEW YORK Date 10/20/76  410  Mr. Volcker  Of From  RUDOLF THUNBERG  Please: Attend to  0 For your information  O Note and return  El For your files  El Note and forward  El As per conversation  to Files  O As requested  • See (phone) me  O For your comments  re attached  and suggestions  El Prepare reply for my signature  0 Does attached meet with your approval? O For signature, if you approve  Other remarks: Attached is a proposed outline for your remarks at the regional bankers' meeting on Friday. The charts are still in preparation.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Proposed Outline for Regional Meeting October 22, 1976  • I.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  The Current Recovery and Outlook A.  Review of the Current Recovery 1.  Real output, as measured by the GNP data, has increased 9.6 percent since the start of the recovery (Chart 1: Real GNP in Postwar Recoveries). a.  2.  The growth has been anything but steady. Instead, the recovery had displayed the uneveness to be expected, alternating between unsustainably rapid and sluggish growth (Chart 2: Changes in Real GNP).  3.  The rebound was initiated by consumers (Chart 3: Real Consumption). a.  B.  This is close to the average growth experienced in previous postwar recoveries.  Changes in  Consumer spending turned up in early 1975 while other components of GNP continued to plunge.  4.  In subsequent quarters, inventory investment turned around and began to contribute positively to the economic recovery. Inventory liquidation slowed sharply in the second half of 1975 and was followed by renewed inventory accumulation (Chart 4: Real Inventory Investment).  5.  Residential construction also rebounded early in the recovery-from a severely depressed level--although the rate of gain tapered off during the first three quarters of this year (Chart 5: Changes in Real Residential Construction).  6.  Business fixed investment has begun to rise, following a normal lag (Chart 6: Changes in Real Business Fixed Investment). Nonetheless, plant and equipment spending has provided less of an impetus to the recovery than usual (Chart 7: Real Business Fixed Investment in Postwar Recoveries).  The Recent Slowdown 1. Consumer spending turned rather sluggish last spring after an unsustainable burst in the early months of the year (Chart 8: Retail Sales). a.  While overall sales in September were up only marginally from August's, sales in the nonautomotive sector posted a good gain (Chart 9: Retail Sales Excluding Automotive).  0.0  -25.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  b.  2.  The UAW strike against Ford curtailed auto production in September and October and has undoubtedly held down auto sales this month (Chart 10: Domestic Automobile Sales and Production).  Since spring, the housing sector has contributed little to economic growth. Housing starts in August were no higher than housing starts in February (Chart 11: Housing Starts). a.  There were some encouraging signs of late, however. i.  Housing starts jumped in September to an annual rate of 1.8 million units, the highest level of activity in 3 years. Much of the gain of the past two months has been concentrated in the depressed multi-family sector. Building permits shot up in August and September-for both single-family and multi-family units. This is an indication that housing activity is likely to contribute to economic growth in the near future.  3.  Now tilat inventory investment has returned to more normal levels, this sector's contribution to the recovery has dropped off.  4.  As mentioned earlier, capital spending has failed to pick up as much as hoped for.  5.  These developments have all contributed to a slowdown in the growth of output (Chart 12: Industrial Production). a.  6.  In September, production actually failed to advance. But, to a considerable extent this reflected the impact of the Ford strike.  The unemployment rate has also increased since last spring, although there was a slight downturn in September (Chart 13: Unemployment Rates). a.  The rise in unemployment reflects in part the impact of the recent slowdown.  b.  It is also linked to the behavior of the labor force. While employment growth has kept up with the average of past recoveries, labor force growth has been unusually rapid (Chart 14: Labor Force and Employment).  3  •  C.  Outlook for the Recovery 1.  The continued sluggishness of the recovery has raised questions over whether the recovery is ending. However, there is no reason to anticipate that the current recovery may soon abort. The recovery has been under way only 19 months, which is not long by postwar standards (Chart 15: Length of Recoveries).  2.  Moreover, there are no signs of the strains that have in the past precipitated economic downturns. a.  Inventories do not appear out of line with sales (Chart 1_6 Inventory/Sales Ratios).  b.  Capacity is ample (Chart 17: Utilization).  c.  d.  3.  Measures of Capacity  Financial markets do not appear strained. Indeed 'interest rates have on balance drifted downward during the recovery, instead of rising as normal (Chart 18: Interest Rates). And with major strikes ending in the rubber, coal, and automotive sectors, the drag which these strikes live had on production should be over.  The economy clearly has the potential for a long sustained advance. How much of this potential is realized will depend in large part on the strength of future spending by consumers and businesses. a.  b.  C.  Consumer sentiment surveys suggest an increase in consumer confidence, despite the recent sluggishness.  Personal income has continued to grow, although the sharp decline in farm proprietors' income held down the overall increase in the third, quarter._ Capital spending surveys generally point to some pickup in spending plans, although the outlook remains a bit cloudy (Chart 19: Plant and Equipment Expenditures).  Before turning to price and monetary developments, I would like to explore   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  What the National Recovery Has Meant for the Region A.  New York City 1.  Employment in New York City has been declining since the 1969-70 recession (Chart 20: New York City: Payroll Employment).  •I  4  •  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  2.  Government Employment, after edging higher in the '70's, has dropped sharply since 1975. These highly publicized cutbacks, of course, were mandated by the City's fiscal crisis (Chart 21: Government Employment).  3.  Private employment has also fallen. There are currently about 600,000 fewer workers on private payrolls in the City than in 1970 (Chart 22: Private Employment). While employment has risen nationally during the recovery, it has continued to fall in the City.  b.  In recent months, private sector employment appears to have levelled'off--suggesting that a tenuous -stability may be emerging.  4.  Although the City's job loss has been partially offset by a reduction in the labor force,theCity's unemployment rate has risen relative to the national rate. As of August, the City rate held at 10.4 percent for the third consecutive month (Chart 23: Unemployment Rates).  5.  The job loss has depressed personal income and prevented retail sales in the City from keeping pace with sales nationally (Chart 24: Retail Sales).  6.  B.  a.  a.  Measured in current dollars, August retail sales were roughly equal to sales at the start of 1975.  b.  Some preliminary evidence, however, indicatesa pickup in retail sales around the Labor Day weekend and continuing into. October.  C.  The growing emergence of Sunday openings may add impetus to retailing.  Construction activity has come to a virtual standstill (Chart 25: New Housing Units).  New York State 1.  The rest of the state has fared better than New York City in recent years. a.  Employment outside the City has increased while City employment was falling (Chart 26: New York State Civilian Employment).  b.  The unemployment rate outside New York City has stayed below the City rate (Chart 27: New York State Unemployment Rates).   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  5  C.  2.  Nonetheless, New York State's recovery has not matched the national recovery. a.  During the early part of this year, the decline in the City offset advances elsewhere in the state and payroll employment declined (Chart 29: New York State Payroll Employment).  b.  The State unemployment rate has recently been well above the national rate. In August, the State's rate was 1.2 percentage points above the national rate (Chart 30: Unemployment Rate). Consumer spending in the State has fallen behind spending nationwide.  c.  3.  Reflecting the relatively greater strength of the state, retail sales in New York State have been stronger than City sales (Chart 28: New York State Retail Sales).  The overall outlook for the State may be improving. a.  Private employment in the City appears to be levelling off and may be gaining in the State.  b.  There are some indications that retail sales in the City are picking up.  c.  With signs of tenuous stability emerging in the City, the prospects for the State's economy appear to be improving.  d.  Indeed, while the differential between the state and national unemployment rates remains high, this differential has contracted in recent months.  The Price Situation A.  B.  The GNP deflator, which provides the broadest gauge of inflation, grew at a 4.4 percent rate in the third quarter. This represents an improvement over the second quarter rate, and is quite modest by recent standards (Chart 31: Implicit GNP Price Deflator). Consumer Prices 1.  Consumer prices rose at a 5 percent rate in September, which is below the rate of the previous 4 months (Chart 32: Consumer Prices--September data due 10/21).  2.  The 12-14 percent inflation rate of 1974 has been cut in half.  3.  Food price movements have been somewhat volatile, but overall this year food prices have increased only modestly. Indeed, early this year they were actually falling (Chart 33: Consumer Prices: Food--September data due 10/21).  •  - 6  4.  Energy prices have risen sharply in recent months.  5.  Consumer prices excluding food and energy have been in the 6 percent range throughout the year (Chart 34! Consumer Food Prices Excluding Food and Energy--September data due 10/21).  •  C.  Wholesale Prices 1.  Wholesale prices increased sharply in September, but have still risen at less than a 6 percent rate this year (Chart 35:. Wholesale Prices).  2.  The September pickup in indusial tr price increases was unwelcomeIndustrial Cha Wholesale Prices).  3.  On a more positive note, a number of major industries, including steel, copper, and zinc, have experienced difficulty making recent price increases stick.  4.  Moreover, spot prices for raw industrial commodities have been falling in recent weeks, which should mitigate future increases in industrial prices (Chart 37: Spot Commodity Prices). I 5.  IV   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Spot prices for foodstuffs have also been falling, and with this year's bountiful harvest the nearterm outlook for food prices looks favorable.  Monetary Policy A.  Recent History 1.  The money supply generally grew rather rapidly in the 1964-71 period and by 1972 had clearly become excessive (Chart 38: Money Supply Growth).  2.  Therefore, the Federal Reserve began moving toward monetary restraint in the closing months of 1972. This led to slower monetary growth in 1973 and 1974. a.  3.  The basic strategy of this policy was to moderate over time the expansion in money and bank credit to rates of growth compatible with reasonable price stability in the longer run.  In 1975 and early 1976, this pattern was interrupted. In an effort to end the recession and foster the subsequent recovery, the rate of monetary growth was increased.  7  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  B.  Current Situation 1.  The narrowly defined money stock (M1) has generally increased at a modest rate over recent months. This represents a slowdown from earlier in the year (Chart 39: Narrow Money Supply).  2.  The broadly defined money stock (M2) has not displayed the same tendency to fall. Its rate of increase remains relatively high (Chart 40: M2: Broad Money Supply). a.  3.  4  This is because the growth in consumer-type time deposits has remained strong.  Since early 1975, business loans have generally drifted lower. a.  This is unusual for a recovery and appears to be due in part to business' increased attention on liquidity and their shift from short-term debt to long-term debt.  b.  The decline in business loans appears to have levelled off in recent months, and in September business loans expanded.  c.  Business loans continue to move lower at New York City banks, but demand seems to have stopped falling at weekly reporting banks outside the, City (Charts 41 and 42: Business Loans: Banks in New York City, Banks Outside New York City).  With inflation interest rates both long term Term and Short  moderating and credit demand remaining soft, have drifted lower over the past few months-and short term rates (Charts 43 and 44: Long Term Interest Rates).  ITINERARY FOR MR. VOLCKER  •  REGIONAL MEETING TURF INN COLONIE, NEW YORK  October 22, 1976 Leave home by bank automobile (Protection) 8:35 a.m.  Leave Kennedy on Alleghany Airlines Flight No.320  9:32 a.m.  Arrive Albany Airport  Bank Relations Special Representative will meet Mr. Volcker at the Albany Airport and provide transportation to the Turf Inn, Colonie, New York (518-458-7250).  ,  10:00 a.m. c  Registration for guests and coffee  10:30 a.m.  Meeting starts.  12:30 p.m.  Formal meeting concludes.  1:00 p.m.  Luncheon  2:30 p.m.  Leave Turf Inn by bank automobile (Bank Relations)  3:25 p.m.  Leave Albany Airport on Alleghany Airlines Flight No.325  4:19 p.m.  Arrive Kennedy Airport  A protection automobile will meet Mr. Volcker at Kennedy Airport and take him to his home.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  ,  MSC. 13640 10/74  FEDERAL RESERVE BANK OF NEW YORK Date 9/29/76_  Op  Mr, Volcker  Of FRED W. PIDERILAR..  From  Please: •Attend to  p El  0 For your information  Note and return  El For your files  Note and forward  0 As per conversation  to Files  0 As requested  O See (phone) me  ID  For your comments  re attached  and suggestions  El Prepare reply for  0 Does attached meet  my signature  with your approval? 0 For signature, if you approve  Other remarks: Please advise Mr. Love of your plans.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  • rill5C. :„4 .2•-• •  ,  FEDERAL RLSEktVE PANK OF NEW YORK  3/74  OFFICE CORRESPONDENCE  • To  DATE Those Listed Below  September 28, 1976  SUBJECT: Travel Arrangements-Regional  FROM F. T. Love  Meetings  •  In order to complete the necessary arrangements for travel and accommodations in connection with the regional meetings in October and November, we need to know the travel preferences of the participants.  Attached are lists of available flights based on  current schedules.  Please let me know the flights you prefer, and  we will make the necessary airline and motel reservations.  In view of  the uncertain weather conditions that might be expected in mid-November, we suggest that participants plan to arrive in Buffalo the evening of November 16 rather than the morning of the Batavia meeting. We will arrange the necessary ground transportation to and from the motels as well as from Batavia to Syracuse.  Also,  transportation to and from Albany and Tarrytown will be available by Bank automobile. Since we are holding blocks of rooms at the various locations, please let me know your travel preferences for each meetinS at your earliest convenience. CHA/FTL/dm Attachments cc: Messrs:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Piderit Sloane Bakstansky Gray Keane (Buffalo)  Schadrack Hoenig McDonnell (Buffalo) Allen Samansky  •  •  •••-•*  AVAILABLE AIR TRANSPORTATION FOR COLONIE - REGIONAL MEETING October 22, 1976  New York to Albany  Arrive  Leave  Date 10/21/76  Kennedy  5:50 p.m.  Albany  6:47 p.m.  10/21/76  Kennedy  8:10 p.m.  Albany  8:56 p.m.  10/21/76  Newark  9:35 p.m.  Albany  10:20 p.m.  10/21/76  Kennedy  9:45 p.m.  Albany  10:42 p.m.  10/22/76  Kennedy  8:35 a.m.  Albany  9:32 a.m.  Albany to New York  10/22/76  Albany  3:25 p.m.  Kennedy  4:19 p.m.  10/22/76  Albany  5:05 p.m.  Kennedy  5:59 p.m.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  All above flights are non-stop on Allegheny Airlines.  • AVAILABLE AIR TRANSPORTATION FOR BATAVIA - SYRACUSE REGIONAL MEETINGS November 17, 1976  New York to Buffalo  Date  Leave  Arrive  Sto,Es  11/16/76  LaGuardia  6:00 p.m.  Buffalo  7:01 p.m.  0  11/16/76  Newark  6:25 p.m.  Buffalo  7:23 p.m.  0  11/16/76  Newark  8:30 p.m.  Buffalo  10:06 p.m.  1  11/16/76  Kennedy  9:35 p.m.  Buffalo  11:26 p.m.  1  11/17/76  LaGuardia  7:55 a.m.  Buffalo  8:56 a.m.  0  11/17/76  Newark  8:00 a.m.  Buffalo  8:58 a.m.  0  Syracuse to New York  11/17/76  Syracuse  9:01 p.m.  Kennedy  9:58 p.m.  0  11/18/76  Syracuse  8:40 a.m.  Newark  9:25 a.m.  0   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  All above flights are via Allegheny Airlines.  . - 1111111110. -  FEDERAL OF  OFFICE  RESERVE BANK YORK  NEW  CORRESPONDENCE  •  DATE  Mr. Volcker  SUBJECT  September 23, 1976  Regional Meetings  Peter Bakstansky -  r prom  I wanted to alert you before you left that we have been planning for the Regional Meetings to be held October 22, November 15 and November 17. As we discussed, I think it desirable for you not to speak from a prepared text but rather discuss a number of broad topics, as you did at the New Jersey meetings. We think it would be appropriate for you to cover the following general areas: 1. 2. 3. 4.  Regional and national economics, monetary policy, pending national and state legislation, other current concerns of the System.  I am sending copies of this memorandum to Messrs. Davis and Oltman and am asking them to prepare background material for you. The other speakers on the program will be Mr. Timlen, whom we are asking to discuss "The Question of Membership: Pricing Access and Services" and Mr. Schadrack, whom we are asking to discuss "The Changing Competitive Banking Situation in New York". Mr. Timlen will not be at the November 15 meeting and we are asking Mr. Sloane to substitute for him on that date. PB/mdw cc: Messrs. Timlen Guy Piderit Sloane Davis Gray Oltman Schadrack Hoenig Love Allen Samansky   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102