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The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies. Federal Reserve Bank of St. Louis  FEDERAL RESERVE BANK OF PHILADELPHIA  Collection: Paul A. Volcker Papers Call Number: MC279  Box 27  Preferred Citation: Federal Reserve Bank: Philadelphia, 1980-1986; Paul A. Volcker Papers, Box 27; Public Policy Papers, Department of Rare Books and Special Collections, Princeton University Library Find it online: and 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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Policy on Digitized Collections Digitized collections are made accessible for research purposes. Princeton University has indicated what it knows about the copyrights and rights of privacy, publicity or trademark in its finding aids. However, due to the nature of archival collections, it is not always possible to identify this information. Princeton University is eager to hear from any rights owners, so that it may provide accurate information. When a rights issue needs to be addressed, upon request Princeton University will remove the material from public view while it reviews the claim. Inquiries about this material can be directed to: Seeley G. Mudd Manuscript Library 65 Olden Street Princeton, NJ 08540 609-258-6345 609-258-3385 (fax) Federal Reserve Bank of St. Louis  September 11, 1986  Mr. Robert M. Landis Chairman of the Board Federal Reserve Bank of Philadelphia Philadelphia, PA. 19106 Dear Bob: I have never found a perfect time to change the discount rate, and a Wednesday is a bit unusual. But the particular explanation for August 21 is straightforward. It was not "forced" by particular economic or financial circumstances. But it was reasonably clear to me the Board had been in a mood to act for some days. I thought it useful to review the matter and hear the views of the Reserve Bank Presidents during the FOMC meeting on Tuesday; otherwise we might have acted on Monday, a more "normal" day. A number of Board Members were traveling out of Washington on Thursday, and the market doesn't like us acting on Friday. I and others would be out of town the following week. Hence, by a process of exclusion, the Wednesday action, which, as I indicated, reflected to some extent the substance of discussion at the FOMC. In a sense, I welcome your concern as a reflection of the seriousness with which you take your responsibilities. As you know, we get and review some Reserve Bank proposals every week, and there is no day that permits a fresh review by every Bank. But your letter does bring to our attention one clear disadvantage of a Wednesday, other things equal, which, by accident of scheduling, was not the case on the 21st. Best regards,  PAV:ccm Federal Reserve Bank of St. Louis  fr),, yr.r0 "Yptri 4J1)z)24  /)/Y9 40'  ,P1  ni-61 J.!  411,40,,  fi ‘  FEDERAL RESERVE BANK OF PHILADELPHIA Chairman of the Board  A  0")  August 21, 1986 4 C.' - • r'‘  Honorable Paul A. Volcker Chairman Board of Governors of the Federal Reserve System Washington, D.C. 20551 Dear Paul: This morning the Philadelphia Federal Reserve Bank had its regular meeting and endorsed yesterday's action of the Board of Governors lowering the discount rate to 5 1/2 per cent. Our review of current economic and credit conditions in the region and our report to the Board seemed anticlimactic. With New York, Boston, Chicago and Philadelphia having scheduled meetings for Thursday and Atlanta for tomorrow, it was hard to see the action of the Board yesterday, in the absence of any necessitous circumstance, as other than indifference to the views of a significant number of banks on this important action. It comes in striking contrast with th,, letter T received from Governor Angell in early July in which he urged us to continue to make reporting to the Board on our rationale for discount rate actions "a high priority." He said, "An important role of Reserve Bank directors is to provide the Board of Governors with a current view of economic and credit conditions in their regions through their actions on the Reserve Bank's discount rates.  Ten Independence Mall, Philadelphia, PA 19106,(215) 574-6000 Federal Reserve Bank of St. Louis  .01116  FEDERAL RESERVE BANK OF PH ILADELPHIA Chairman of the Board  Honorable Paul A. Volcker August 21, 1986 Page 2.  Many of us are concerned with the independence of the Reserve Banks and their role in the functioning of the Federal Reserve System. We hope to preserve and enhance it. With my best regards, Sincerely,  Robert M. Landis RML:dgk cc: Wayne D. Angell  Ten Independence Mall, Philadelphia, PA 19106(215) 574-6000 Federal Reserve Bank of St. Louis  Federal Qe6erve bank of Philadelphia.on Independence  •  1931 AUG -3 PM I: 38 OFFICE OF THE PRESIDENT  July 31, 1981  TO:  ALL GOVERNORS AND PRESIDENTS  FROM:  EDWARD G. BOEHNE  I found the attached memo dealing with the short-run impact on interest rates of the extended credit program for thrifts helpful in organizing my thoughts.  Perhaps you'll find it helpful as well.  Attachment cc: Federal Reserve Bank of St. Louis  Stephen H. Axilrod Peter D. Sternlight  6ixth and Arch cStreet5 Philadelphia,Pennbylvania 1q106  FEDERAL RESERVE BANK OF PHILADELPHIA  July 30, 1981  TO:  Mr. Boehne Mr. Mullineaux  FROM:  Mr. Lang  SUBJECT:  Short-Run Impact of the Extended Credit Program on Interest Rates  Executive Summary Borrowing from Federal Reserve Banks will increase under the extended credit program. In order to maintain the same total reserve path, tilt nonborrowed reserve path will be lowered by the amount of borrowing generated by the program. This offsetting change in the nonborr owed path is designed to prevent an expansion of money growth in excess of the FOMC's desired growth. The short-run impact of these reserve adjustments will be an increase in the Fed funds rate and other short-term interest rates. There are two reasons for this effect. First, the change in the mix of borrowed and nonborrowed reserves will increase interest rates. Under lagged reserve accounting, the demand for total reserves in the current week is essentially fixed. A reduction in nonborrowed reserves will force more bank borrowi ng at the discount window. But since banks perceive that there are costs associated with borrowing from the Fed ("reluctance to borrow "), the Fed funds rate is bid up as banks attempt to avoid borrowi ng at the window. Thus, the change in the mix of reserves supplied will increase interest rates in the short run. In addition, the new demand for borrowings by thrifts essentially represen ts an inci•ease in the demand for total reserves. Under lagged reserve accounting, this demand by thrifts cannot be offset immediately by a reduction in demand for reserves by banks. Consequently, the Fed funds rate will rise even further in the short run. The upward adjustment of interest rates will exacerbate thrift institutions' problems, possibly resulting in even greater demands on the discount window. A cumulat ive rise in extended credit from the Reserve Banks would be offset by further reductions in nonborr owed reserves, resulting in another upward adjustment of interest rates. Thus, it is possible that a more sustained rise in interest rates could develop. Whether the higher level of interest rates would result in slower money growth than the FOMC desired is open to debate at this point. Federal Reserve Bank of St. Louis  Short-Run Impact of the Extended Credit Program Under the extended credit program, the Federal Reserve would lend to thrift institutions in order to allow them to avoid selling long-term assets at substantial losses.  The Federal Reserve loans  essentially will be replacing other funds that are being withdrawn by depositors. In order to keep this lending from expanding total reserves above the desired path level, the Board proposes that the nonborrowed reserve path be reduced by the amount of thrift borrowing. The short-run impact of this approach will be to increase the Fed funds rate, as demonstrated below. Futhermore, if this type of lending expanded over time, the higher level of short-term interest rates could result in slower money growth than originally anticipated, at least for a time. Supply and Demand for Total Reserves Figure 1 depicts the supply (TRs)and demand (TRd)for total reserves as functions of the Fed funds rate (FFR). As the funds rate rises, the quantity of reserves demanded declines. The supply curve of total reserves can be viewed as having three distinct parts. First, the supply curve is vertical at the policy-determined level of nonborrowed reserves(NBR0). Reserves supplied in excess of nonborrowed reserves are borrowed reserves, where the amount borrowed rises as the spread between the funds rate and discount rate (DR) widens. The discount rate is assumed to be held constant for our purposes. There is some maximum amount of reserves which the Fed would lend; that is, some level of total reserves(TR m)beyond which the Fed would refuse to lend at the window. The Fed determines the initial level of nonborrowed reserves (NBR0)and the intersection of the supply and demand curves determines the funds rate (FFR0), total reserves (TR0), and borrowing (TRo - NBR0), as shown in Figure 1. Before analyzing the extended credit program, it is useful to consider what happens to the funds rate if the Fed reduces nonborrowed reserves but does not alter the maximum amount of reserves it is willing to supply. In the very short-run of one week, the demand curve for total reserves is vertical under lagged reserve accounting (Figure 2). Nonborrowed reserves are reduced from NBR0 to NBRi, and the total reserve supply curve shifts from TRs to TRsl. Although total reserves remain the same (TRO, borrowings increase (TRo - NBRO and the funds rate rises(FFR1). Thus, a change in the mix of the reserves supplied in the current week will raise the funds rate. Federal Reserve Bank of St. Louis  2  11  The Extended Credit Program The extended credit program will be triggered as the Fed offsets outflows of deposits or other liabilities from thrifts. Essentially, thrifts now will be demanding reserves, which will shift TRd to the right (see TRdl in Figure 3).  In the current week, the increase in the demand for reserves is  represented by TRi - Tito. The Board proposes to supply these reserves to thrifts, but plans to offset them by an equal reduction in nonborrowed reserves. Nonborrowed reserves decline to NBRi (where NBRi- NBR0 = TRi - Tito). Unless banks are convinced that the terms of borrowing have been made easier—which could flatten the upward-sloping portion of the supply curve—the funds rate will rise to FFR 1* Note that total reserves will rise above their target path in the current week even though the Desk lowers the nonborrowed path.  Under lagged reserve accounting, the additional demand for  reserves by thrifts cannot be instantaneously offset by a reduction in reserve demand by banks. In the short run, upward adjustments in short-term interest rates could be quite large if the amount of thrift borrowing is large. This upward adjustment of interest rates will exacerbate the thrifts' problems, possibly resulting in even greater demands on the discount window. How large could the extended credit program become?  From April through June, thrift  institutions experienced deposit outflows totalling $10 to $11 billion. If the Federal Reserve by itself had offset these deposit outflows with discount window lending, the nonborrowed reserve path by the end of June would have been lowered $10 to $11 billion. Since nonborrowed reserves in June were only $38 to $39 billion, the Board's proposed offset to extended credit lending would have reduced nonborrowed reserves by more than 25 percent. At present it is expected that loans to thrifts would amount to from $1 to $2 billion. If one were concerned about the short-run effect of such lending on interest rates, one would want to keep the level of borrowing from rising much above that range. A reduction of nonborrowed reserves of $1 to $2 billion would have much smaller effects on financial markets than a reduction of $10 billion. The initial increase in the funds rate as nonborrowed reserves are lowered will, with a lag, reduce the demand for reserves (and money). So over a longer time horizon, the funds rate and total reserves will return toward their original levels. But if lending to thrifts expanded over a period of time to higher and higher cumulative levels, the funds rate would continue to increase as the Desk successively Federal Reserve Bank of St. Louis  3  lowered nonborrowed reserves to offset the increased borrowing.  Thus, it is possible that a more  sustained rise in interest rates could develop. Whether the resulting short-ru n money growth would be significantly slower than the FOMC's desired short-run path is open to debate at this point. But there is some risk of this associated with the proposed adjustments to the nonborr rowed reserve paths. Federal Reserve Bank of St. Louis  4 Federal Reserve Bank of St. Louis  FF  FFA  7-12 d  'TR()  krbi  F-  G—  lA kF  Tg  c.  ...rg i'l  FFR 1  4\  FFP„ Federal Reserve Bank of St. Louis  _  -  _  -  -  _  -  -  / 115  -..•-•"---  ....,"  -- ---r 1 1 1 1 NIP, /tw o  --rk 0  T TA pi  FFA  Frki  1  FFet, Federal Reserve Bank of St. Louis  T o  TR,  eS  [Xs  cS  ammacY/5, 19S1  David P. lasthers, President Federal Reserve Sank of Philadelphia, Pennaylvaltlatiram Dear Dever ?hank you for your letter of MoveMber 26th semsersimg the impost et Segulatiesh en credit unions. /n adoptimg the Oem redeem regelremest provisions, the Scare reeegnised that they would affect the curtest operatlems of mamy institutioas mad eould require changes in the level of services being provided to customers. !be restrictions on the ems of telephone transfers were believed necessary in order to make reserve requirements as transactions aconite effective. If unlimited telephone transfers were permitted, a regular share soonest could be used to feed a share draft account, with • resulting loss of requiren reserves. If such a practice became widespread, the increase in monetary osatrol, Watt was the fundamental purpose of the Ponetary Control Act, c0a1d be hampered significantly. I believe that the ability of individuals to obtain an explicit return on their transactions balances should ameliorate the concerns empressed by many Gossamers. Of course, an emlissited member of telephone transfers are permitted from Share draft ana SON eccoesta sac, in addition, as unlimited member of moil withdrawals are permitted from any type of aseseet. You also indicated the smacern expressed by sway credit ualoas that the ability to make mere thee acme transfers umpires that the entire balance in the anomie& be regarded as a transaction balance. Of course, the impact of this prevision abeald be mialmal bemuse effective reserve requirements are lea as a result of the eight-year phose-im of reserve requirements provided by the Act. If a credit mime does not wish be restrict the ability of a member to withdraw by telsphsme in order to maid reserve requirements, we recommend that it segregate the einfaim balance requiremsmt by placing it in a separate account, which is subject to the three telephone transfer per month limitation. While this may necessitate the use of two separate accounts, it has the elect of significantly reducing reserve requirements. Federal Reserve Bank of St. Louis  David P. liestourn, President  The leard has been concerned with the impact the Monetary Control Apt maid have epos depository institutions. We have attempted to implement the porevieieme at the Act in a fashion that minimises the disruption of servieee Was tattered to the public yet facilitatee ashievarmoat of the objectives at the hat. We believe that our efforts to date have struck a favecabie balance. sincerely.  boas  Ms. Nallardi (2) Chairman's Log #3017  GTS:bbo 1/2/81 Federal Reserve Bank of St. Louis  •••  TO:  Chairman Volcker  FROM:  Messrs. Ettin and Schwartz  DATE: SUBJECT:  January 2, 1981 Two issues dealing with reserve requirements.  Recently you asked that we investigate two matters dealing with reserve requirements. I.  New York banks and interest-bearing transaction accounts According to a New York Federal Reserve Bank survey of officers in  charge of the retail operations of eight large city banks (attached), there appears to be no avoidance of Regulation D, particularly on the three transfers per month provision.  Indeed, several institutions, including Citibank,  indicated that monitoring systems are already--or shortly will be--in place to assure the proper classification of deposits for reserve requirement purposes. II. Letter to President Eastburn on request for relief by credit unions In light of the New York survey results, we have drafted a response that encompasses your earlier comments.  Attachments Federal Reserve Bank of St. Louis  (See attached)  • 'N misc 34 (1/77)  FEDERAL RESERVE BANK OF NEW YORK  OFFICE CORRESPONDENCE DATE To FROM  Mr. Juncker J. Boss Bank Regulations Division  SUBJECT  December 31, 1980  Survey on Transfers from Nontransaction Accounts  A survey was conducted by the Federal Reserve Bank of December 24 and 31, 1980 concerning current between New York handling certain transfers from in s bank practice . Eight large money center banks were accounts action nontrans specific questions regarding s to response for asked ion accounts.-J transact and action nontrans The survey asked whether the banks widely offer telephone transfers, preauthorized transfers, automatic bill paying services, and debit cards through which third party payments can be made. The survey requested information regarding the banks' method of monitoring the monthly limit of three transfers when such transfers are from nontransaction savings accounts, whether customers are notified and/or charged a fee when the limit is persistently exceeded, and what procedures are in place to treat nontransaction accounts as transaction accounts for reserve requirement purposes when activity exceeds the three transaction limit for several periods. The survey revealed that five of the eight banks, (Bankers, Irving, ManufaL*_urers, Marine and Morgan) do not widely offer telephone transfer services or automatic bill paying services. Bankers, Irving and Manufacturers said they offer preauthorized transfers, but only on a very limited basis and only in connection with transaction accounts. Both Marine and Irving either have, or intend to have, pilot programs for such accounts, but only in conn2ction with transaction accounts. Chase and Chemical informed us that they widely offer telephone transfer services, preauthorized transfers and debit cards, all of which are handled through transaction accounts. Cemical intends to offer these services in the near future through nontransaction accounts subject to the monthly limit ot three transfers. When these services are offered on nontransaction accounts, Chemical will activate an encoder system which identifies the fourth transaction and automatically and immedidLely shifts the account into a reservable transaction account. Chase's system for telephone transfers will not permit more than three transfers from savings to cher'4ing in any given month. The caller is advised upon his fourth call that he must come to a branch office to effect the transfer either at a teller window or at an ATM.  1/  The eight banks in the survey are: Bankers Trust Company (Bankers); Chase Manhattan Bank, N.A. (Chase); Chemical Bank (Chemical); Citibank, N.A. (Citi); Irving Trust Company 'Trving; Manufacturers Hanover Trust Company (Manufacturers); r'arine) and Moran Guaranty Trust Marine Midland Bank, N.A. . Company (Morgan) Federal Reserve Bank of St. Louis  -2-  Citi says it does not generally offer telephone transfer services or bill paying services. It relies on its extensive network of 24 hour automated teller machines (ATMs) available at most branch sites and its "Citicard" which permits internal transfers between accounts. Payments on loans and bank credit cards are also permitted through the ATMs but a check is used to effect third party payments with the ATM serving as a lockbox. Citi also offers limited preautnorized transfers but only from transaction accounts. Telephone transfers are offered for the purchase of travelers checks from both transaction and nontransaction accounts, but this service is in the process of being restricted to transaction accounts. In the meantime, a monitoring system to prohibit more than three preauthorized transfers from nontransaction accounts is in place which prohibits a fourth transaction. It appears on the basis of information supplied, that Citi's systems provide a clear distinction between transaction and nontransaction accounts and adequate monitoring of activity. JB:GRJ:LK/gr Federal Reserve Bank of St. Louis  rcdcral Pc&-I-vc I'mnk of' Philddclphia. on Indcperidcncc Liii • 611 y ( P-3  November 26, 1980  The Honorable Paul A. Volcker Chairman Board of Governors of the Federal Reserve System Washington, DC 20551 Dear Paul: As part of our general effort to meet our new constituents under the Monetary Control Act, we have had a number of meetings with credit union groups. We found credit unions to be quite upset about a couple of issues related to what constitutes a transaction account. First, credit unions, because they have a relatively small and known customer base, do much of their business by telephone. Customers seldom, if ever, come to the credit union office to transact business. For this reason most share accounts with immediate withdrawal features can be accessed by telephone to move funds to other accounts. Unless the credit unions now go back to their customers and inform them that all such movement of funds between share accounts and other accounts will have a limit of three transfers per month, all these accounts will be classified as transactions accounts. Credit union executives feel these accounts are not really used for transactions purposes. They are not used for third party payments. They feel consumers just find it more convenient to use the telephone to transfer money from a share account to another account instead of getting into their car and driving to the credit union. They think it is ridiculous to now discourage telephone transactions. Second, many credit unions that permit telephone transfers from share accounts have a minimum balance specified by the customer. The reason that the minimum exists is to qualify the customer for maximum life insurance benefits. At some credit unions this minimum balance is as high as $2,000. Under our current definitions the entire account, if it had no transfer restrictions, would be classified as a transactions account even though $2,000 of the balance is not eligible for transfer. Federal Reserve Bank of St. Louis  6.14\111 and Arch 611-cc,-1 1q106  A  FL-L:1E1111 1Jccrvc 15ailk or. Philadelphia h  0 2  10  The Honorable Paul A. Volcker  We promised credit union leaders in our district that we would pass these concerns on to you. Should the Board staff wish additional information, please have them contact Bill Stone, Vice President. Sincerely,  David P. Eastburn  DPE/kb Federal Reserve Bank of St. Louis  •  Federal Qe8erve bank of Philadelphia on Independence Mall  October 28, 1980  The Honorable Frederick H. Schultz Vice Chairman Board of Governors of the Federal Reserve System Washington, DC 20551 Dear Fred: I am enclosing an update of our master list of candidates of the Philadelphia Fed's presidency. If, after looking these names over, you have any additional comment, I'd appreciate hearing from you. Our work goes well and we'll keep you posted from time to time on our progress. Best regards, •t  t  e  Werner C. Brown Chairman, Search Committee  Enclosure Federal Reserve Bank of St. Louis  6ixth and Arch (Streets Philadelphia,Pennsylvania 19106  CODE:  Invitation for Resume Sent ResumS Received Applicant Turned Us Down I&Interview Scheduled 2 Xv'/Turned Down by Committee  RECOMMENDATIONS FOR PRESIDENT  FROM ATLANTA A. Gilbert Heebner, Executive Vice President & Economist The Philadelphia National Bank  ?Yi  Jim Meths, Head Clairmont Economic Institute (Now with Oppenheimer Corp., N.Y.)  //  Bob Parry, Chief Economist Security Pacific Bank  FROM MINNEAPOLIS / Edward Foster, Assistant Dean )(L/ School of Business University of Minnesota  FROM NEW YORK  1///  Burton G. Malkiel, Prof. of Economics Princeton University Edwin H. Yeo, III, Chairman Asset & Liability Management Committee First National Bank of Chicago  /Gesualdo A. Ccstanzo, Vice Chairman nV Citibank, N.A. James F. English, Vice President Trinity College (Finance & Planning) Henry J. Costanzo, Financial Manager Inter-American Development Bank Donald B. Rice, Jr., President Rand Corporation Lawrence E. Fouraker, Dean Harvard Business School Federal Reserve Bank of St. Louis  -2-  FROM GOVERNOR PARTEE  1/  /Marina Whitman, Chief Economist General Motors Corporation  /Norman Robertson, Senior Vice Pres. & Chief Economist )( V Mellon Bank  FROM GOVERNOR SCHULTZ Theodore E. Allison, Secretary Office of the Secretary Board of Governors of the Federal Reserve System William H. Wallace, Staff Director Office of Staff Director for Federal Reserve Bank Activities Board of Governors of the Federal Reserve System James A. McIntosh, First Vice President Federal Reserve Bank of Boston Donald W. Moriarity, Jr., First Vice President Federal Reserve Bank of St. Louis Al Wojnilower, Chief Economist First Boston Corporation Bob Parry, Chief Economist (Duplicate) Securities Pacific Corporation // W. Bowman Cutter, Executive Associate Director for Budget V Office of Management and Budget F. Gerard Adams, Faculty Member Wharton School, University of Pennsylvania Norman Robertson, Chief Economist Mellon Bank - Pittsburgh Jack Wilkinson, Economist Sun Oil Co.  (Duplicate)  (no)  v// Bruce Lippke, Director, Corporate Planning Weyerhaeuser Company Alvin J. Krchere, Corp. Chief Economist IBM Betty Anderson - (no) Federal Reserve Bank of St. Louis  -3-  FROM DALLAS  Theodore E. Allison, Secretary (Duplicate) the Secretary of Office Board of Governors of the Federal Reserve System WilliaM-19:-Wallace, Staff Director (Duplicate) ctor Office of Sta a ities Federal Res overnors of the Fe• : Reserve System Boar6 I James A. McIntosh, First Vice President Federal Reserve Bank of Boston  (Duplicate)  Donald W. Moriarity, Jr., First Vice President Federal Reserve Bank of St. Louis  (Duplicate)  Karl A. Scheld, Senior Vice President & Director of Research Federal Reserve Bank of Chicago First V' Robert Bahk Federa_l_Ease-Fve  ident  Kent 0. Sims, Senior Vice President Federal Reserve Bank of San Francisco  FROM PHILADELPHIA FED Richard L. Smoot, First Vice-President Federal Reserve Bank of Philadelphia Edward G. Boehne, Senior Vice President Federal Reserve Bank of Philadelphia  Former Fed Employees and Outside People Larry Gearrety - New York Arnold Weber - Philadelphia Edward Kane - Cleveland Tom Storrs - Richmond Kermit Hansen - Cleveland Leonard Santow - Dallas as Donald Woodland - Dallas Federal Reserve Bank of St. Louis  -4-  Former Fed Employees and Outside People (Cont) Jeffrey Bucher - Board of Governors Daniel Brill - Treasury Department Steve Friedman - Treasury Department  FROY WERNER BROWN  William Liddon McPeters, President American Bankers Assoc., 1976-1977 Born 1922, Corinth, Miss. Vanderbilt-Harvard - Ph.D. Lacy Hunt, Senior Vice President The Fidelity Bank  )t 1// /  James Tucker, Vice President (no) Federal Reserve Bank of Richmond  /Courtney Slater Department of Commerce  /Juanita Kreps )( 1// Former Secretary of Commerce  PHONE IN ‘,//(  (no)  v/George McKinney Irving Trust Jack W. Wilkinson Sun Co.  (no)  FROM HARRY JENSEN James Drumwright Provident NationalWd.fflk Federal Reserve Bank of St. Louis  4  -5-  FROM JOHN ECKMAN  ///Donald C. Carroll, Dean V Wharton School  /Richard Rosett, Dean Graduate School of Business University of Chicago  / ' / Bill Coleman, Esq. O'Melveny & Myers, Wash. /Hon. A. Leon Hiodinhotham, Jr., U.S. Court of Appeals 22613 U.S. Court House 601 Market Street, Phila., 19106 /Barbara Newell, U.S. Ambassador to UNESCO American Embassy, Paris / /Dr. Song Won Son, Chief Economist N.W. National Minneapolis Bank v/A1 Phillips, Economist University of Pennsylvania  FROM NANCY TEETERS 1/Alice Rirlin Congressional Budget Office  FROM BIECHLER /// William Whitesell, Secretary of Ranking, PA. (1979) FROM H. H. HOLLOWAY s/ Clifton Wharton, Jr., Chancellor State University of New York-Albany FROM CHARLES ROSS WOODSON, 3RD Hiliary H. Holloway, Vice President and General Counsel Federal Reserve Bank of Philadelphia Federal Reserve Bank of St. Louis  -60  1  FROM HAROLD STILL Paul Miller (Investments) Chairman of Board of Trustees University of Pennsylvania  John Eckman, Chairman and Chief Executive Officer Rorer Group Inc. Federal Reserve Bank of St. Louis  FEDERAL RESERVE BANK OF PHILADELPHIA PHILADELPHIA,PENNSYLVANIA 19105  OFFICE OF THE PRESIDENT  September 26, 1980  The Honorable Paul A. Volcker Chairman Federal Reserve Board of Governors Washington, DC 20551 Dear Paul: I have looked over the agenda of topics for the planned analysis of FOMC targeting issues which you forwarded in your letter of September 19. I think this effort is both necessary and timely and the outline of papers strikes me as quite comprehensive. If I have any reservations about the project, they concern our apparent unwillingness to be rather open about it. It seems quite natural and appropriate for the Committee to be presently undertaking this endeavor. Indeed, I would be quite surprised if questions were not soon raised in Congress or the media about the need for such an evaluation. I don't mean to suggest that we should publicly announce that we're carrying out such an analysis. That would imply that this is something more than a normal exercise designed to evaluate our policy. But I am concerned that too much effort may be devoted to keeping things under wraps, so to speak. This could be detrimental to the quality of the analysis as well as to relations with the public and the Congress. I recognize your valid concern about public misinterpretation of such a study. But misinterpretation is also likely if we appear to be less than forthcoming, and this bothers me more. Sincerely,  David P. Eastburn cc: All Presidents and Governors S. Axilrod Federal Reserve Bank of St. Louis
Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102