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Submitted by:
Lawrence K. Roos, President
Federal Reserve Bank of St. Louis

August 1976





The Challenge


Public Opinion


Our "Publics"


The Present Program


Alternative Strategies


The Plan


Appendix A (Public Opinion Survey)




This is a plan designed to increase public understanding of the functions,
responsibilities and policies of the Federal Reserve System and to enhance
public confidence in the System. The purpose of the plan is to inform the
general public of what the System does, can and cannot do. It is not
intended to be a high-powered propaganda effort to gloss over criticism of
the Federal Reserve or to insulate the System from legitimate political
and public pressures. Nor does it propose a "hard sell" effort by the
System. Rather it is intended to provide a means to better acquaint the
public with the goals, policies and programs of the Federal Reserve
System, thereby providing a fair and sound basis by which the American
public can judge the effectiveness with which the System is discharging
its statutory responsibilities.




Government and its agencies at ail levels are currently under increasing attack.
As a result of traumatic events of recent years, the American public has become
increasingly critical of public institutions in general and is tending more and
more to challenge the integrity of even the most respected agencies of national
Since its founding in 1913, the Federal Reserve has occupied a unique position
in the American System. The very nature of its role as a central bank and
architect of monetary policy carries a mystique which creates in the public
mind a sense of awe toward the System. Conversely, the complex nature of
monetary policy formulation and the necessarily remote nature of many of
our operational activities are not easily understood and tend to generate
suspicion rather than support.
The current extent of public understanding and support of the System is
difficult to measure. Congressional attempts to curtail the independence of
the Fed have increased in intensity. Legal challenges to traditional practices
are pending in the courts. While the public press currently supports the
tradition of an independent central bank, conditions of political or economic
stress, in the absence of a strong and carefully constructed foundation of
public understanding, could render the Federal Reserve System increasingly
vulnerable to attack.




In an effort to measure public attitudes toward the Federal Reserve System,
the Federal Reserve Bank of St. Louis conducted a random sampling of opinion
in our area. The survey results are attached as Appendix A. Our sample is a
limited one and does not necessarily reflect attitudes nationwide. However,
it does suggest that most Americans have little, if any, knowledge of what the
System does. Only 5 per cent of those surveyed had any clear impression of
the programs, purposes and policies of the System. This in itself implies a
vulnerability inasmuch as an uninformed citizenry tends to be an easy target
for misrepresentation and distortion of facts.
Nearly 50 years ago, the Board recognized the importance of keeping the
public informed when it stated in an Annual Report, 'The more fully the
public understands what the function of the Federal Reserve System is and
on what grounds and on what indications its policies and action are based,
the simpler and easier will be the conduct of credit administration in the
United States." This plan is designed to enhance such understanding.




An effective System program of public information and education must address
the many diverse public groups which directly or indirectly are affected by the
Federal Reserve System. These include member bankers, nonmember bankers,
members of the Congress, representatives of electronic and print media,
consumer advocates, educators, students, representatives of organized labor
and the general public. To reach such a broad audience, the program must be
many-faceted. It should include films, publications, speeches, seminars and
conferences, tours of facilities and numerous other media of communication.
It must involve a commitment at the Board level as well as an intensified effort
by the Reserve Banks.




Currently the twelve Reserve Banks spend more than eight million dollars
annually on public information and bank relations.
This commitment, while sizable in scope, is less than fully effective. Too
often programs lack quality, coordination, and unity of direction. Examples:
The System film is outdated. Many publications are poorly written. Tour
guides at some banks are-not properly trained. The simple device of the
press' release is often neglected.
An eight million dollar effort should not be conducted in an ad hoc, hit-ormiss fashion. We propose the creation of a professionally organized program
worthy of the System and an expenditure of such magnitude!




In February 1975, the Conference of Presidents' Ad Hoc Task Force on Bank
and Public Relations Policies published a report proposing a Systemwide
public relations program designed to counter increasing public and political
criticism of the System. The report was "issue-oriented," seeking to identify
critical issues and develop a means of responding to issues which were critical
of the System. It suggested the use of public relations techniques to
neutralize criticism as it surfaced.
The recommendations of the 1975 report were comprehensive. However,
the ad hoc nature of the proposals and the "hard sell" public relations
techniques suggested were a sharp departure from the "informational" nature
of traditional System public information efforts.
The strategy we propose herein differs from that suggested in the 1976 report
Our proposal is guided by the belief that the Federal Reserve, as a quasi-public
agency, would be vulnerable to political and public criticism if it were to
employ obvious public relations techniques specifically designed to counter
adverse criticism. Our critics in Congress and elsewhere would surely
recognize the transparently self-serving nature of such a public relations
program, and the reaction would almost certainly be hostile.
Our approach is to inform the public through the broad dissemination of
factual information and to convey it in an understandable manner. The
issue is ignorance, not bias; hence, a broad-based program built on a factual
explanation of our policies and practices offers the best means of enhancing
public confidence in the System.




Office of Public information
In order to stimulate a coordinated Systemwide public information effort,
an Office of Public Information should be created within the staff of the
Board of Governors. That office would be headed by an individual
experienced in modern techniques of public communication, assisted by
personnel competent in creative writing and film production. The Office
of Public Information would have the following general responsibilities;
1- Systemwide Coordination of Effort
It would serve as a clearinghouse for the exchange of information and would
coordinate the public information activities of the Reserve Banks with those
of the Board of Governors in order to assure maximum impact It would be
responsible, in coordination with Resen/e Banks, for creating films and
publications suitable for Systemwide use, which would be made available,
upon request, to Reserve Banks for distribution. It would provide
professional and technical advice to Reserve Banks in their public
information activities, while at no time infringing upon the independence
of the Reserve Banks which in turn would remain free to accept or reject
materials and programs offered by the Office of Public Information,
depending upon their local desires and needs.
2. System Film
To produce, under the direction of the Chairman's Oversight Committee
of-Governors and Reserve Bank Presidents, one or more films or film strips
suitable for Systemwide use. The new System film would replace "Money
on the Move" and 'The Federal Reserve System" which are obsolete.
Although Reserve Banks would remain free to produce local films to meet
special local needs, it is felt that a centrally produced film of high quality,
suitable for Systemwide use, is a more sensible allocation of resources
than for each Reserve Bank independently to create a film for its own



3. Publications
To produce professional quality brochures and other printed material
suitable for Systemwide use and to make such publications available, upon
order, to Reserve Banks with provision for the overprinting of the names
of the various Reserve Banks. Reserve Banks should be encouraged to
continue to publish local publications, as needed. Upon request, the Office
of Public Information would provide professional assistance to individual
Reserve Banks in the preparation of local publications.
4. Training
To offer training and professional assistance to Reserve Banks in the
formulation and conduct of their local public information programs, and to
serve as a catalyst for the encouragement of such local programs. Periodic
workshops for System personnel would be a means of achieving these
Reserve Bank Public Information Activities
1. Bank Tours
Each Reserve Bank should be encouraged to step up conducted tours of
its premises by school, social and civic groups. Such tours, if well organized,
can be very effective, For maximum impact, however, tour guides must
be carefully trained and the scope of the tours carefully planned. Tours
should include a pre-tour orientation session at which a talk or a film
highlighting the importance of the System and its independence should be
presented. At the conclusion of the tour, participants should be given
brochures or other suitable mementos of the visit.
2. Contacts with Public Groups
A. Communications with Commercial Bankers
— Commercial Bank Visitations
Reserve Banks should be encouraged to make regularly scheduled visits
to all member banks and as many nonmember banks as possible within
their District. It is important that Reserve Bank personnel making such
calls have information of substance to discuss with bankers during
visits. Purely social-type visits are of limited value. A well-prepared
contact officer can be most instrumental in communicating the "System
story" to the commercial banking industry.



— Meetings at Reserve Banks
Periodic luncheon or dinner meetings of senior officers of Reserve
Banks with member and nonmember bankers and representatives of
thrift institutions provide excellent forums for communicating with
the financial community. Here again it is important that Reserve Bank
presidents and other senior officers make use of the opportunity to
convey a meaningful message of interest to their audiences.
— Banking Association Meetings
Attendance at meetings of state bankers associations, BAI, Robert
Morris, etc., has value in terms of maintaining System visibility, but
should not be used as a substitute for bank visitations or for more
personal meetings of a substantive and less social nature.
— Mailings to Member Banks
Periodic mailings to commercial banks are helpful vehicles for
communicating information of current interest and keeping in touch
with this important constituency,
B. Communication with Educators and Students
There is no more important audience for publicizing System policies
and programs than the Nation's schools and colleges. Today's students
are tomorrow's decision-makers and it is essential that the importance
of an independent Federal Reserve System be communicated to those
involved in our educational system.
— Educators
All Reserve Banks should be encouraged to arrange frequent workshops
and seminars for high school, and university instructors within their
Districts. Such programs should feature information on monetary
policy and Federal Reserve activities and should encourage tine expansion
of economic education In our schools and colleges.



— Students
Reserve Banks should be encouraged to maintain close and continuous
contact with student groups at both the high school and college levels.
The best means of arranging programs Is through use of direct mail.
Letters should be dispatched by Reserve Banks to schools and colleges
in their Districts, advising of the availability of speakers, bank tours,
films and publications. The mailings should specify how to arrange for a
speaker, and specific personnel within each Reserve Bank should be
assigned the responsibility of promptly responding to incoming requests.
Speakers to address school groups should be carefully chosen and
capable of effectively communioating with the group to be addressed.
Nothing is more counterproductive than sending a dull speaker to
address a restless student audience!
C. Contacts with Business and Labor
— Business
Luncheon and dinner meetings with leaders of large and snail businesses
throughout Reserve Districts are excellent vehicles to draw the business
community closer to the process of monetary policy formulation.
Such meetings should not merely be forums for Reserve Bank
economists to brief business leaders on economic conditions. The
business leaders in attendance should be encouraged to present their
views on current conditions within their industries, and it should be
stressed that their input is of real interest to Reserve Bank presidents
in their contribution to FOMC policy.
— Labor
Organized labor likewise has a major interest in the course of national
economic policy, and it behooves Reserve Banks to maintain close
liaison with labor leaders in their communities. As with business
leaders, periodic luncheon or dinner meetings with labor leaders are
valuable in maintaining effective community relations.



D. Contacts with Consumer Groups
The emerging emphasis on consumerism and the increasing role of the
Federal Reserve in the administration of consumer-related regulations
makes it essential that the System establish lines of communication with
such groups. While we do not recommend that the System assume an
advocacy posture with regard to consumer issues, it is important that
information pertaining to System activities in matters of consumer interest
be made easily available to the public.
E. Contacts with the Press
The maintenance of open and continuing lines of communication with
representatives of the printed and electronic media is an essential
element in communicating with the general public. A knowledgeable
press can be a vital link in maintaining a favorable image for the System.
Reserve Banks should invite representatives of the local press to
luncheon meetings on a regularly scheduled basis. Press seminars and
press briefings by Reserve personnel on economic subjects of current
interest can help to keep the media abreast of information that, while
well-known to System personnel, may be quite obscure to the general
Reserve Bank presidents and other senior personnel of such banks
should always maintain a posture of availability to the press, and their
relationship should be characterized by openness and candor.
F, Contact with Elected Officials
Due to the sensitive nature of relations with elected officials and the
fact that the Federal Reserve System is dependent on Congress for
its existence, it is recommended that such Congressional relations
remain primarily a responsibility of the Board of Governors. While
officers and directors of Reserve Banks should strive for close and
cordial ties with members of Congress, overt lobbying and participation
in partisan political activities should be avoided by officers and
directors of Reserve Banks. In order to make available useful
information on monetary policy, periodic informative seminars and
discussion sessions with Congressional staff personnel could serve a
useful purpose.



G. Speeches by Reserve Bank Presidents
The prestige of the Federal Reserve System provides an excellent channel
for Reserve Bank presidents and members of their staffs to speak out on
issues of major importance such as monetary policy, Federal Reserve
activities, the state of the economy and other topics of national or
regional significance. Due to the prominence likely to be given to
statements of such officials, care should be exercised that public
utterances be carefully weighed both for appropriateness of content
and possible public reaction. When speeches deal with subjects of
importance, they should be given wide circulation through press releases,
inclusion in District publications and interviews on radio and television.
H. Reserve Bank Research
One of the most important activities of the System is independent
research performed by the research staffs of the various Reserve Banks.
Such research should continue to be encouraged and its widest possible
propagation sought. The utmost care should be exercised to perpetuate
independence of research at the District level, as this is probably the
most visible manifestation of the broad diversity of opinion that goes
into the formulation of monetary policy by the System.

Public Responsiveness of System Personnel

A major ingredient in maintaining a favorable public image is how well
System personnel handle their daily contacts with the general public.
These contacts range from routine matters, such as use of the telephone,
letter writing and the handling of the public by Reserve Bank tellers,
to the manner in which System regulations are transmitted to member
With regard to telephone usage, local telephone company training
sessions in how to improve the speed and courtesy with which telephone
calls from the public are handled are excellent vehicles for improving
telephone service, A "once in a lifetime" telephone call by a citizen,
if handled in an offhand manner, can result in a totally negative
impression of the Federal Reserve System in the mind of the caller.



Often letters from System personnel are written in formal and stilted
terms and convey an impression of bureaucratic indifference rather than
reflecting genuine interest on the part of the correspondent. It is a
simple matter to inject warmth into correspondence, and training in
this regard is a valuable means of creating a favorable public image.
The citizen who occasionally enters a Reserve Bank to handle a
government securities transaction is entitled to the same prompt service
and courteous attention as would be accorded by well-trained customer
contact personnel in a commercial bank.
A frequent source of irritation is the dissemination to member banks
of lengthy regulations that are difficult to interpret, not summarized
in digest form so as to be easily understood, and which occasionally
call for response or comment in an unnecessarily short period of time.
It is unrealistic to expect ponderous regulations to be carefully critiqued
unless adequate time for study is allowed.
In summary, personnel at the Board and Reserve Bank levels can be
enthusiastic ambassadors of good will in their contact with the public
if they are well trained and imbued with a desire to create a good image
for the System.
Issues Requiring Special Handling
Occasionally, matters arise which are of such unusual importance to the
System that they require special handling. Federal Reserve independence
is an example of this sort of issue.
In instances where issues are unusually sensitive or of extraordinary
importance, we recommend the procedure proposed by the Subcommittee
on Public Information of the Committee on Research, Public Information
and Bank Relations of the Conference of Presidents whereby that
subcommittee would become responsible for identifying key issues of
special interest and for presenting them for screening to the Committee
on Research, Public Information and Bank Relations which, in turn, would
present them to the Conference of Presidents for consideration. Issues
designated by the Conference of Presidents as properly fitting into this
category would be accorded special handling as merited by the degree of
urgency involved.



Implementation of Plan
Currently, the Conference of Presidents' Committee on Research, Public
Information and Bank Relations is responsible for Reserve Bank public
information activities through its Subcommittee on Public Information.
The plan outlined herein is one for the entire System. Its successful
implementation requires the commitment of personnel and resources both
at the Board of Governors and Reserve Bank level. Therefore, it is
recommended that a special ad hoc committee representative of the
Board and the Reserve Banks be established to supervise at least the initial
phases of the effort proposed herein. Members of that ad hoc committee
should be:
— Two members of the Board of Governors
designated by the Chairman;
— Two Reserve Bank presidents, one of whom
would be the Chairman of the Committee
on Research, Public Information and Bank
Relations; and
— The Director of the new Office of Public.
Information (when appointed).
A precise timetable for implementing the plan should be developed by the
ad hoc committee. After the plan, if approved, is put into effect, the ad
hoc committee can be dissolved and the normal channels of supervision
will apply.





A telephone survey, based on a random sample of 206 interviews of names
drawn from the St. Louis and St. Louis County telephone directory, was
conducted during the week of August 5 — 10 by bank personnel to
determine the extent of public knowledge of the Federal Reserve System.
Using a table of random numbers, the 26th telephone number listing on
every second page of the Metropolitan Telephone Directory was chosen
for calling. If the 26th listing was a business number, the next residential
listing was selected. Five attempts were made to obtain an answer before
proceeding to the next number.
Calls were carefully spaced during the day, night and weekend to reach
both men and women. The sequence of organization names used was
rotated every fifth call so as to avoid bias.
Questions and responses are listed on the following page.




I'm going to read the names of three organizations. After I read each name,
can you please tell me whether or not you recognize it?

All Respondents
Federal Reserve System




Small Business Administration




Department of Housing and Urban Development





Can you name one or more things these organizations do?

All Respondents
Federal Reserve System
Have pretty clear understanding
Have little or no understanding


Small Business Administration
Have pretty clear understartding
Have little or no understanding


Department of Housing and Urban Development
Have pretty clear understanding
Have little or no understanding