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COMMITTEEON BANKING,HOUSING,AND URBAN AFFAIRS ,Chairman WILLIAM PROXMIRE ,Wisconsin HARRISON A.WILLIAMS,JR.,New Jersey JAKE GARN ,Utah ALLAN CRANSTON ,California AD LAI E. ST EVENS ON , Illinois JO HN TOWER ROBERT MO RGAN ,NorthCarolin a WILLI AM L. ARMST RONG ,Colorad o NANCY LANDON KASSEBAUM ,Kansas DON ALD W. RIEG LE ,JR.,Michigan PAUL S.SARBANES ,Maryland , Texas JOHN HEINZ,Pennsylvan ia RICHARDG.LUGAR,Indiana DONALD W. STEWART ,Alabama PAUL E. TSONGAS ,Massachusetts KENNETH A.McLEAN ,Staff Director M. DANNY WALL,Minority Staff Director BRUCEF.FREED,Professional Staff Member (II) N OMI NAT ION J. RI CE OF EMM ETT TUESDAY , JUNE 5, 1979 U.S. SENATE, COMMITTEE ON BANKING,HOUSINGAND URBAN AFFAI RS, on,D.C. Washingt tteemet at 9:40a.m The commi . in room 5302, Dirk sen Senate g,Senat or Willia m Proxmire, chairmanofthe com Office Buildin ing mittee,presid . Present :Senators Proxmire and Lugar . The CHAIRMAN .The committeewillcome toorder. Dr.Rice ,will youcomeforward ,sir ?Will youraise yourright hand . y you are aboutto giv e willbe the Do you swear the testimon hingbutthe truth ? andnot ,thewholetruth truth Dr.RICE.Yes,sir . TESTIMONY OF DR . EMMETT J. RICE TheCHAIRMAN . You havea remarkably finebackground . I am veryimpressed . Itisgoodto havea nomineefortheFederal Reserve Boardwiththekinds ofqualifications youhave .You have beenan academic economist .You haveyourdoctorate ineconom ics , isthatcorrect ? Dr.RICE.Yes,sir . The CHAIRMAN.What was yourdissertation on? Dr.RICE .Sources and theusesofcapital foreconomic develop mentinthepublic sector economy. oftheIndian The CHAIRMAN .Of what ? economy.Itwas a disserta sector oftheIndian Dr.RICE.Public . We were at thetime public finance o f Indian tionon an aspect fundsto promote wereusingpublic looking athow theIndians ,andthatiswhatthedisser inthecountry development economic tationwas about. The CHAIRMAN.And you havebeenadviser totheCentral Bank ofNigeria ;andwhatdidyoudointhatconnection ? Dr.RICE.I was partofa groupofforeign central bankstaff , two of us from the FederalReserve , aboutsevenfrom the Bank of England andfour fromtheReserve BankofAustralia ,who formed a cadre toestablish andgettheCentral BankofNigeria started as a centralbank . Iworkedreally insetting up a research department forthebank andalso asan adviser tothegovernors ofthebank,advising them on monetary policy . I alsohelped thegovernors develop tools of monetarycontrol inthedevelopment ofa treasury bill market , and (1) 2 ral onalframework in which the Cent tituti d developan ins helpe tions ket opera . d int o do open mar Bank coul beg The CHAIRMAN . You were on the staffof the Federal Reserve Board forsome time. Dr.Rice.The Federal Reserve Bank ofNew York. The CHAIRMAN.Forhow long? Dr.Rice.Two years . TheCHAIRMAN .You werealso an adviser oftheTreasury ? Dr.RICE .Iwasonthestaff oftheTreasury .IwasintheInterna tional Affairs Division Department oftheTreasury . The CHAIRMAN .How long? . Dr.Rice.Two years The CHAIRMAN.The World Bank? . Dr.Rice.Four years .WhatdidyoudoattheWorldBank? TheCHAIRMAN Dr.Rice .IwastheDeputy U.S.Director on theExecutive Board of the World Bank . The CHAIRMAN .You have been a commercialbanker? Dr.Rice.Yes,sir . The CHAIRMAN.Tellus aboutthat .What bank didyou work for and whatwereyourfunctions and how longdidyou workatitasa commercial banker ? Dr.Rice .Ihavebeenemployed bytheNational BankofWash ington since December1971. Duringthatperiod ,I haveworkedas theofficer responsible forthemoney trading operations ofthe bank,what we call themoney center at thebank, wherewe buy and sell Federal funds , wherewe makepurchase agreements with and forcustomers ,wherewe issue certificates ofdeposit ,wherewe tradeinsecurities ,government and municipals ,forour own portfo lio. Inaddition tothat ,Ihaveattimes ,atvarious times inthepast , beenresponsible forthelong -rangeplanningforthebank,aswell asresponsible forthepreparation ofthebudget ofthebank,which is ,ofcourse ,short -run,1-yearplanning . timesbeen inchargeofthebank'scommu I have alsoatvarious program . nitydevelopment The CHAIRMAN .As I say,I am very impressed . I wonderwhere youhavebeenall these years . We should haveappointed youyears background agototheFederal Reserve Board,withtheremarkable you have . AlltheyearsI havebeen on the BankingCommittee , and I have beenon the committeemore than 20 years , I can't recall a better qualified candidate .Ireally can't . Dr. Rice.Thank you. The CHAIRMAN.You aremost impressive. Now, whatdo youfeel istheprincipal role oftheFederal Re serve Boardasourprincipal central banker ? What do youfeel it canbest donow toserve thepublic interest ? Dr.RICE.Thatisa verygene ralquest ion. . The CHAIRMAN.Itis indeed Dr.Rice .Perhaps Ican start by saying whatI thinka central bank cannotdo,as wellas can do.For one thing ,I don'tthinkthat monetary policy candoallofthefunctions , canperform allofthe functions ,can accomplishallof the results and objectives that many people nowadayssetforit . 3 Forexample ,manypeople holdtheFederal Reserve responsible forstopping theinflation .Theyfeel thatthis istheresponsibility of thecentralbank, and itcan do itby itself . I happennot to believe that .Idon't thinkmonetary policy by itself canaccomplish miracles orcanfully offset developments thatarereally outside theinfluence ofmonetary policy . Ithink really themosta central bankcandothrough its mone tarypolicy isto keepmatters fromgetting - well , toavoiddoing any realharm,by promoting conditions of monetary stability , by insuring thatthe supplyof money available to the economyis adequate , isnot excessive , isnotdeficient . The central bank can,in thisway, avoiddoinga greatdealof harm . The CHAIRMAN.Do you disagree withthethesis , as I understand it-andI certainly don't wanttomisstate theposition ofMilton Friedman. But therearesome economists who argue, ifyou persist in a conservative monetary policy longenough , thatyou will achieve a situation inwhichyou canbringinflation undercontrol . Thatmay takeyearstodo and you may havetopay a tremendous priceinvariousways,but itcan be done; thatafterall , ifyou persist enough insimply increasing themoneysupply ata very moderate rate ,theavailability ofcredit will besufficiently limited sothatinterest rates will just hold down theeconomy andyouwill cometoa point whereinflation will comeundercontrol . You don't espouse thatview? Dr.RICE .No.ButIcertainly donotdisagree thateventually you willgetinflation undercontrol . But as you said , at perhapsan enormous price ,andata price thatoursociety wouldprobably find themoneysupply overthelongrun,ifyourestrict ButIthink unacceptable . ,you canthrowtheeconomyintodeep , of course enough severely , and inthatway wringallofthe depression , perhaps recession inflation out oftheeconomy. The CHAIRM AN . I see . Dr.Rice. In thesecircums tance s, of cours e, I belie ve you have paidtoohigha pri , perh ce apsa highe r pricethanwouldbe neces sary . But ofcours e,Iagreeyoucan usemonetary poli cy. try youshould whatI hadinmindwhenI said Thisisprecisely thequantityof , ifyou restrict to avoiddoingharm. Of course .Youcan,as I ,slowdowngrowth ,youcan,ofcourse moneyenough ,prolonged recession recession into deeper ,pushtheeconomy said . or depression The CHAIRMAN. As I say, I am veryimpre ssedwith your back groundandqualifi cation s. I would be curio us toknow what you fe elwould be themost prac tical and desirabl e way that we can copewith thevery puzzli ngand diff icult problemof infla tion . What wouldyouthinkwoul d bethebestpubl icpolicy , themost impor tantpublic poli cythatwe canfol low? Dr.RICE.Let me say first , I don't have an answer toourpresent dilemma.Ithinkwe have totry togivetheadmin istra tion' swage priceguidel ineprogram a chance.I cert ainly hopeitwil l work. TheCHAIRMAN .You say thatinspiteof thecourtdecisi onofjust theotherday ? Dr. RICE.Yes,sir ,Ido. 4 The CHAIRMAN . You thinkitstill has a chance to be a useful influence downprices inholding ? Dr.Rice .Yes,I do. I still thinkithasa chance .I don't thinkthe court decision itself makestheprogram unworkable .I never really attached a great dealofimportance totheimplied threat ofwith holding Governmentcontracts . I don'tthinkthatwas a strong element intheprograminthefirst place . I think thereally strong element istheconsensus thatitmight be possible to extract fromthebusiness communityand from strong labor groups totrytostayinline ,andifyou cangetthis commitment ,getthis agreement and persuade themtostick toit , eventhoughfromtimeto timeitmay seemveryunfair to individ uals orindividual groups ,nevertheless ,by persuasion andconstant appeals totheir sense ofresponsibility ,itmightwell work. Now ,ifitdoesn't work,Ithinkwe aretheninverydeeptrouble . We mighttrysomeversion ofTIP.At onetimeIwouldhavebeen infavoroftrying either theOkun version or theWallachversion . The CHAIRMAN . We triedto have a beginning of that, as you know,wit h thePre siden t'spro posal of a tax rebat e forthosewho wouldacce pt a wage at the guide lineor below . The differe nce would be made up by a rebateon income taxesand a refund . But obvious ly, the Cong ressisn't goingto do that .The House istaking a posi tion thatmakesitunli kely that we will . So it seems to me , under thosecircumstances , with inflation running at12and13percent andwiththeguidelines at7 percent , itishard toseehow we can expectworkerstoacceptan enormous differential and takea 3-or 4-or 5-or 6-percent cutintheir real income .That's whatwe areasking themtodo. Dr. Rice.I agree. The CHAIRMAN. Ifyougo highe r than that ,ifyougo to a guide li neof8 percent or10percent , then itisnotmuch ofa guid eline . Dr. RICE.I agree. TheCHAIRMAN . Before Iyield toSenator Lugar , Iwould like to askwhatrole , ifany, youseefiscal policy playing , Government spending and taxing ,ininflation . policy .I byfiscal role tobeplayed . Iseean important Dr.Rice and move the deficit toreduce wouldhopethatwe cancontinue inthis budget . I thinkthatisimportant towarda balanced quickly thatin a time such as we are in right . I believe presentsituation be can perhaps tools can perhaps —fiscal policy thatfiscal . undercontrol theinflation inbringing moreeffective than policy can be moreeffective The CHAIRMAN.You sayfiscal now , ? monetarypolicy Dr.Rice cumst .Probabl y, intheprese ntcir ances ,yes . The CHAIRMAN .Senator Lugar? SenatorLUGAR.Mr. Chairman and Mr. Rice, I appr eciat e very much the oppor tunit y to meetyou the otherday and havea visit with you. Ihave admiredafaryourachievem entsfora longtime, and willvoteforyourconfirma tion. I do wanttotak e thisoppor tunit y inthehearin g,however , to pursue some ofthe thi ngsthatSenatorProxmirewas pursui ng in hisquesti ons,becausein yourresponseabou t theinf latio n situ a tion andmonet arypolic y,ifIgathe r whatyouwere sayingcorrec t ly,you saidthatitwould be possib le, intheeventthe Fed was 5 determined todo so,toraise therediscount rates ,takeothersteps , thatcould pushtheeconomy into deeprecession and could infact , atleast inyourjudgment , reverse thecourse oframpantinflation , butata verygrievous cost . Yourgeneral philosophy wasoneoftrying toavoid doing harm, ifI quoteyou correctly . Dr. RICE.That iscorrect . Senator LUGAR.Thisappears tobe thepolicy oftheFed, as one looksat itfrom thisvantagepoint , forseveral months , evenfor several years .Therehasbeen an accommodation , albeit a rough one,withsome fluctuations , inwhichtheFed has simplyallowed whatever was goingtooccurtooccur , without trying todo harm. Thatis ,supply enough moneyliterally — andthenwe haveproceed ed on . I suppose thebasic question I haveofyou is , who knows really whatthe circumstances willbe, as you make decisions sitting around the Board; but what ifwe come intoa situation in which inflation really doesremainaspersistent as itisnow? And let's saythatwe havea downturnintheeconomy , evena recession , shallow ordeep ,as thecasemay be, andwe continually havea built -in rate. Some economists have testified before our committee thatitis sortoffixed at7 to8 percent now,and goestodoubledigits under badconditions .Isthatlikely toinfluence yourdecisionmaking at thatpoint ? Inotherwords , could therecome circumstances in whichyou decidethatthereare allsorts of harms beingdone, allsorts of evils , and thatmonetary policy willreally have totakea more dramatic course inorder to changetheinflationary spiral ? Dr.RICE .As Iunderst andyour quest ion , you areaskin g ifI can concei ve of a timewhen the centralbank might have to takea deci siontothrow the economy intorec ession ? , ifwhat I SenatorLUGAR .Or at leasta more unorthodoxcourse . ofrecent times hasbeentheorthodoxy havebeendescribing of Iam capable thatcertainly Dr.RICE. Well, letme say first of changingmy mind.I liketo thinkof , I am capable learning todo what beprepared myself .And I wouldcertainly as flexible . thing atthetime andfeasible seemedtobe themostreasonable I wouldsay evennow thatifI thoughta mild, shortrecession wouldwringtheinflation outoftheeconomy,I wouldfavorone.I thinkthat mightwellbe thecheapest price thatwe could payto end thisinflation . thatisat the presenttimea reasonable However, I don'tbelieve outofthe .I don'tthinkwe couldwringalloftheinflation route I , and therefore , mildrecession economyby means ofa short time. thatatthepresent favor wouldn't Ifwe got intoa LatinAmerican styl e inf latio n and the economy ceasedtogro w ,and we had still growinginflat , wit ion h economi c stagnat ion,I mightwellhave toreasse ssmy viewand favo r a more Drac onian programorpolic y. Sena torLUGAR. I appre ciatethatdegreeoffle xibili ty. My own viewpoint -I mention thisso you willknow at least fromwhere I am comingisthatlast October , whenthePresident suggested histhree -partprogram ,I applauded thefiscal andmone 6 taryaspects of what he was saying ,whichI gathered he was moving towarda balanced budget .And I wishthathe haddoneso abruptly , really dramatically .And I thinkmaybe he wisheshe had done sonow .But thatdidnotoccur . So onceagain , itwas an incremental , gradual pushin that direction . Monetary policy , itseemstome,mighthaveadopted a courseof similardrama as was evidencedin our assistance to the dollar abroadand theprogramsthatwere takenwiththe assist anceoftheFed atthatpoint . My own judgment isthecostand price -wagecontrol situation wasa disaster in thebeginning andisa disaster now.The Presi dentwouldhavebeenwelltojettison thewholebusiness and get on withthosethingsthatmake a difference , whichI thinkare fiscal andmonetarypolicy . Thatisa prejudice ofmine. I am interested inyourgoodsoldier approach , thatgiventhe chance inthis typeofthing ,in response totheChairman , although itseemstome by this timetheleast embarrassing way togetrid of itwouldbethebest ,andtoconcentrate on those things thatmake a difference . Butinraising thisquestion with Secretary Blumenthal theother day , he saidthattheso-called blockbuster approach , thatis ,a dramatic change intherediscount rates ora dramatic changein thebudget policy ,thePresident going on TV andsaying :My fellow Americans , we aregoingto balancethebudgetthis year, not 5 yearsdownthetrail -inother wordsa changein expectations simplyhas notbeenin thecardsfortheTreasury , forthePresi dentor anyoneelse . I gather fromyou whatyou aresaying , forthemoment itwould notbe inthecardsforyou,either . Dr. RICE .Th at is correct. , hopingno harm willbe SenatorLUGAR. You are a gradualist itappears tome,asIsay,a lotofharmisbeing done ,eventhough does done. I am afraideven much more so willoccur ifinflation not come down while a recessionoccurs. I am asking- and I thinkyou have answeredas bestyou can- it thedisarray , ,asyousurvey therealmofthepossible isnotbeyond ,atleast thataremoredramatic youmightcometoviewpoints that withyourone voteon theBoard? Dr.Rice.That's correct . SenatorLUGAR.Thank you very much . officer atthe assenior ,inyourposition The CHAIRMAN.Dr.Rice for , you have had responsibilities Bank ofWashington National ? operation andinvestment moneytrading Dr. RICE.Yes,sir . The CHAIRMAN.In thatcap acity , youhad a chan ce toobserve Fed policy .What,in youropin ion,is themost appr opria teindica tor orindicato rs ofFed monetary policie s? We arehaving diffic ulties with thatbecau se of the chan gingsignif icanc e of Mi , demand depo signifi sitsbeingless cantthanthey were beforewith transac tion accounts. We arepuzz ledastohow to proce ed torea llygetan understand ingofju stwhatFedpolicy isnow thatisoperat ing .Maybe youcan help us withthat. 7 Dr.RICE .TheFedfunds rate on aday -to -daybasis , changes in theFed fundsratewould,I think ,be thebestindicator on a day-to daybasis . Now ,letme saythatyou tryto findoutwhat otherpeople are thinking in the market as well. You readthe minutes of the previous month's Open MarketCommittee meeting to checkon yourviews ,theviewsthatyou heldtheprevious month. At any particular timeyou think , when youare engaged in money trading ,you havea feelforwhat Federal ReserveReserve policy is ,youcheckit . The CHAIRMAN.I am looking atitdifferently . Thereisnota day to-daykindofoperation that mightconcern youinthebank.This committee hastobe concerned withtheoverall year -to-yearoper ation ,and thatFed fundsratemay be useful tous ina daily basis , butlessuseful ifwe arelooking atitforlong -termpolicies and so forth on thepartoftheFed. Dr.RICE.Well,forlonger termpolicies I lookat thestatements of the FederalReserveBoard and the FOMC themselves . I lookat the minutesthey issueeverymonth. I lookat the— well , the annualreport and now thesemi-annualreport thatitisrequired to issue. thatyou focuson,do you have The CHAIRMAN.Are thestatistics ? What rates generally ofinterest M1,M2 + andM2, thelevel , indicators doyouthinkarethemostsignificant elements specific ? longterm ofFedpolicy indicators themostreliable Dr.RICE.Ihavetro ublewiththequest ion. getting an understanding trouble .We arehaving TheCHAIRMAN . ofhow theFedisoperating Dr.RICE.I thinkthebestway tofindoutwhat Federal Reserve policy isistolook atwhattheysaypolicy isandseeifwhatthey withwhat theysay do isconsistent .I don'tthinkithelpsany to lookat, say, the structure of interest ratesand infer fromthe structure ofinterest rates what Federal Reserve policy hasbeen.I don't thinkitiswisetolookat thechanges inthemoneysupply figures , evenovera period ofa year ,andsaythatthis tells you whatFederal Reserve policy hasbeen. The reas on forthatisthatthefigures ,themoney supplyfigure s, don' t always come out the way,of cours e, the Feder Reserve a l want th s em to come out . The CHAIRMAN . In the prev iousadmin istra tion , someone sai d: Don't listento what we say, look at what we do. And you are sayi ng:Don'tlookatwhat theyhave done , lis tentowhat theysay. than Itseemstome thatwhattheyhavedoneismore significant they what theyaresayingorwhat theywouldlikeus to believe have done. Dr. RICE.In thecas e oftheFeder al Reserv e, itisprob ablywiser tolisten towhat they say,becau se theresults you get may not be what theywant,as Ijustsaid .The money supplyfig uresmay well be overthe targ etrange. So farthisyear theyarerunningbelow the targetrange. So justlookin g at the fac ts or the sta tistic s doesn' t tel l youwhatthemonetaryautho ritywantedorintende d. You are safertaking theirword forwhat theyare try ing to achie ve.To the exten t towhich itisnotachie ved,then you would have to ask why. 46-896 0 - 2 8 TheCHAIRMAN .Ihavesuchgreat faith inyouthatIam going to think about that .Thatisinteresting advice .But youareabout the onlypersonI couldthinkofwho couldpersuade me toconsider the notion thatyou wouldnotpay attention towhat people havedone primarily or theresults ofitstatistically ,but listen to what they say,andthatislikely tobe moreimportant . Dr.Rica. I didn't say thatyou wouldn't pay attention to what theyhavedone.I didn't mean thatifI saidit .What I meanttosay wasthatI wouldn't judgewhattheyintended todo by what actual lyhappened . The CHAIRMAN . I am not so concernedwith intentas I am with results .Iftheresult iseasier credit when theysaytheyaretrying toachieve a morerestrained anti -inflation policy ,thenI wouldsay theyhavefailed inachieving their objective , and therefore I would givethem a lowgrade . ButI gettheimpression fromyouthattheir intention ismore important . Dr.RICE . Well , itispossible to fail in yourobjectives . Itis possible to intendto keep money supplygrowthwithincertain ranges , and the growthmay exceedtheserangesor itmay fall below. The CHAIRMAN. I have a few more questions , and I apologize because there isanother hearing scheduled hereat10o'clock .But I willbe verybrief on this . As youknow,we now havethree separate regulatory agencies regulating the banks. They are the FederalReserveBoard, the Comptroller of the Currencyand the FDIC . Critics have saidthat this systemencourages competition inlaxity among theregulators , because banksenjoy a privilege no other industry enjoys . Theycan picktheirregulator and pickthe one whom theythinkismost usefulforthem . Federal policygoverning we have a consistent Do you believe ofproblembanks? ,bankmergers ,definition bankcapital Dr.Rice.I thinkwe are workingtowarda consistent definition ofcapital needs andconsistent policies toward mergers .We haven't always hadconsistent policies .I don't think I wouldgosofarasto saythat there hasbeenacompetition inlaxity . But I would say that in the pastthe vigorwith which certain policies or certain regulatory objectives havebeenpursued has varied. , bankexaminer we havea single The CHAIRMAN.Why shouldn't , the way we have in allthe otherareas? justone bank examiner regulating power , regulatin We onlyhavetwoorthreepeople we have onlyone. .In aviation transportation Why shouldn't we havethesamething withthebanks ? havea ,I seeno reasonwhy we shouldn't Dr.Rice. In principle reasons why we .But theremay be practical single bankexaminer can't. reasons ? .Whatarethepractical TheCHAIRMAN adjusted —Ishould community hasgotten .Thebanking Dr.Rica to bankshasbecomeaccustomed saythecommunityofthe 14,000 ormaybe regulatory agencies , andasa practical looking tocertain adjusting tothe matter , theymight havedifficulty semipolitical I canthinkof. change .Thatistheonlything 9 The CHAIRMAN . One final question . Therehasbeendiscussion abouttheEuro-currency marketsand the Euro-currency deposits by majorcentral banks ,including theUnited States .Some ofthe argumentsmade in favorof suchreserve requirements are that unregulated Euro -currency markets add toinstability inforeign exchangemarkets , to excess ofworldliquidity , and then interna tional inflation ; alsospeculation by international banks;and,final ly,potential problems fordomestic monetarypolicy . Wouldreserve requirements in Euro-currency setuniformly by majorcentral banksbea useful improvement fortheEuro-curren cy market,inyour view? Dr.RICE.Inmy judgment, itwould. The CHAI RMAN .Itwould be? Dr.RICE. In my judgment , yes. Notthat we have had a great dealoftrouble withthe functioning oftheEuro-currency marketso farwithout reserve requirements .But I think itisalways a good ideatobe abletocontrol a situation , incaseitbecomesdisorderly . The CHAIRMAN .Itmighthelpreduce international inflationary pressures ? Dr.RICE.I wouldn't go sofaras tosaythat .Again,I don't think establishing reserve requirements on theinternational level inthe Euro-currency marketcanstop inflation anymorethanitcanon a domestic level . But itwouldbe a usefultoolto have, justas domestic reserve requirements area useful tool forthemonetary authority tohave. The CHAIRMAN. You area cau tious ,thought ful ,careful , impres siveand intell nomin igent ee. As I said , I think you havebri llian t qual ificat ionsforthejob.We wil l be acti ngon yournomina tion promptly. Thank you verymuch . Dr.Rice.Thank you. The CHAIRMAN.Thiscommittee willrecess and ChairmanTson gaswill takeoverthenexthearing . [Whereupon ,at10:07 a.m. ,themeeting wasadjourned .] [Biographical material onthenominee follows :] 10 STATEMENT FOR COMPLETION BY PRESIDENTIAL NOMINEES RICE Name : JO HN EMMETT (FIRST (LAST) (OTHER) Position towhichMember , Boardof Governors Dateof nomination : ed: nominat 1919Place ofbirth : Florence , South Carolina Dateofbirth : 21 December Federal Reserve System (DAY) tal status: Mari Name andages of chi : ldren (YEAR) (MONTH ) Divorce d Fullname of spouse: > Susan E. Rice , 14 Emmett J. Rice , Jr. 12 Institution Education : Dates attended Degrees Datesof received degrees College of the City of New York 1937-1941 B.B.A. 1941 1941-1942 M.B.A. 1942 Ph .D 1955 College of the City of N ew York Univ ersityof Californ ia (Berke ley) 1947-1951 University of California (Berkeley ) 1952-1954 Honors andawards : List below all scholarships ,fellowships ,honorary degrees ,military medals ,honorary society memberships ,andanyother special recognitions for outstanding service orachievement . 1950 - Research -Assistant(Departmentof Economics ) University of Californ ia (Berkeley ) 195 1 Teaching Fellow(economics ) University of California ( Berkeley ) 1951-52 FulbrightFellow (India) Reserve Bankof India 1952-54 TeachingFellow (economics ) University of California (Berkeley ) 11 Memberships : List below all memberships andoffices held inprofessional ,fraternal ,business ,scholarly , civic ,charitable andother organizations . SEE SCHEDULE "A ". Officeheld Organization Dates (ifany) Employment record :List below all positions held since college ,including the title ordescription ofjob ,nameof employment ,location ofwork ,anddates ofinclusive employment . 1948-50 City Fireman , later fire alarm operator , City of Berkeley , 1950-54 1954-60 California . See Honors and Awards Instructor , laterAssistantProfessorof Economics , Cornell University(Ithaca , New York) 1960-62 Economist , FederalReserveBank of New York 1962-64Advisor , Central Bankof Nigeria (Lagos ) 1964-66DeputyDirector , laterActingDirector , Officeof Developing Nations, U. S. TreasuryDepartment 1966-70 U. S. AlternateExecutiveDirectorfor International Bank forReconstruction andDevelopment (WorldBank), Inter national Development Association (IDA), and International FinanceCorporation (IFC ). Appointed by President Johnson > and confirmedby the Senate. 1970-71 ExecutiveDirector , Mayor'sEconomicDevelopmentCommittee , on leave fromU. S. TreasuryDepartment . 1971 to Present Senior Vice President , The National Bank of Washington 2 12 Government exper ience : List anyexperience inordirect association with Federal ,State ,orlocal governments ,in cluding anyadvisory ,consultative ,honorary orother part -time service orpositions . Refer back to employ ment record. Committee , Development Economic , Mayor's 1971-72ViceChairman Washington , D. C. 1976-78Member ,D. C. Mayor's Overall Economic Development Advisory Committee , Governmentof the , D. C. TaxRevision Commission 1976-78 Chairman Districtof Columbia Published writings : List the titles ,publishers anddates ofbooks ,articles ,reports orother published materials youhavewritten . Only contr ibution itution s to inst al publicat ions--article s, annualreport s , commis sion reports for which I could not claim full credit . Political affiliations andactivities : List all memberships andoffices held inandservices rendered toall political parties or election commi tteesduring thelast 10 yea rs. ; no officesheld. No servicesrende RegisteredDemocrat red. 3 13 Politic al contributions : Itemize all political contributions of$500ormoretoanyindividual ,campaign organiza . tion ,political party , political action committee orsimilar entity during thelast eight years andidentify thespecific amounts ,dates ,andnamesoftherecipients . No contributions of $500 or more. ons cati Qualifi : State fully your qualifications toserve intheposition towhich youhave been named . (attach sheet ) See Schedule "B" Future employment 1.Indicate whether youwill sever all connections with your present employer ,business relationships : firm ,association ororganization if youare confirmed bythe Senate . Yes, I willseverall connections . 2.Asfar ascanbeforeseen ,state whether youhave anyplans after completing govern . mentservice toresume employment ,affiliation orpractice with your previous em. ployer ,business firm ,association ororganization . I haveno plansto resumeanyaffiliation . 3. Hasanybody madeyoua commitment toa jobafter youleave government ? No 4. Do youexpect toserve thefull termforwhich youhavebeenappointed ? Yes 14 Potential conflicts ofinterest : 1.Describe anyfinancial arrangements ordeferred compensation agreements orother continuing dealings with business associates ,clients orcustomers whowill beaf . fected bypolicies which youwill influence intheposition towhich youhave been nominated . None 2.List anyinvestments ,obligations ,liabilities ,orother relationships which might involve potential conflicts ofinterest with theposition towhich youhavebeennominated . , I own 137 sharesof stock in The NationalBank of Washington which I have made arrangementsto disposeof, if confirmedby the S enate . 3. Describe anybusiness relationship , dealing or financial transaction (other thantax . paying )which youhave hadduring thelast 10years with theFederal Government , whether for yourself ,onbehalf ofa client ,oracting asanagent ,that might inany wayconstitute orresult ina possible conflict ofinterest with theposition towhich you havebeennominated . None 5 i 15 4.List anylobbying activity during the past 10years inwhich youhave engaged for the purpose ofdirectly orindirectly influencing thepassage ,defeat ormodification of anylegislation atthe national level ofgovernment oraffecting the administration and execution ofnational laworpublic policy . None 5.Explain howyouwill resolve anypotential conflict ofinterest that maybedisclosed by sestotheabove item yourrespon s. I will arrangeto sell any propertyor asset the ownershipof which would be deemed to be a conflict of interest . I will also resignfrom all businessprofit -making organizations as well as Civil ,criminal and all of those nonprofitorganizations from which conflictsmight investigatory possibly develop. actions : 1.Givethefull details of anycivil orcriminal proceeding inwhichyouwerea defendant oranyinquiry orinvestigation bya Federal ,State ,orlocal agency inwhich youwere the subject ofthe inquiry orinvestigation . At the presenttime, I am a defendantin an actionbroughtby my former wifewho seeksto amendor modifythetermsof a court approved separation agreement relating to visitation rightsand custody of our children . The case is now pending in the D. C. Court of Appeals. 2. Givethefull details ofanyproceeding , inquiry or investigation by anyprofessional association including anybarassociation inwhich youwere thesubject ofthepro ceeding ,inquiry orinvestigation . None 6 16 Emmett Statem ent forCompleti on by J. Rice Presidential Nominees Page 2-A MEMBERS Schedule " A" H I PS ORGANIZATIONS OFFICE HELD DAT ES Federal City Council Washington Trustee 1972 present Federal City Housing Corporation t and Former Presiden current Board Member 1972 present Greater Washington Business Resource Board Member 1974 - present Center Minority ContractorsResource Center Board Member 1972 - 1974 American Red Cross, D. C. Chapter Board Member 1975 - present The Center For Municipal and Metro politan Research of the National Capital Area Board Member 1975 - present Consortium of Universities, Board Mem ber 1974 present American Economic Association Member 1954 1974 Council on Foreign Relations Member 1972 - present Atlantic Board Member 1971 1978 Washington , D. C. Council - - 1976 presen t Member 1972 - present D. C. Bankers Association Member 1972 University Club of Washington Member 1976 - present Washington Performing Arts Society Board Member 1977 present Trans World Corporation Boar d Member 1979 present Trans World Airlines , Inc. Board Member 1973 - prese nt Metropolitan Washington Boardof Trade BUSI present NESS FortLinco ln NewTown Corpor ation Board Member 1975 - prese nt District Communications, Inc. Board Member 1974 - present 1 . . 17 Emmett J. Rice Stateme nt forComp letionby PresidentialNominee s Page 4 -A Schedule"B" ATIONS QUALIFIC Exceptfortheyearsdevoted to teaching economics in a distinguished university , nearlyallof my professional career has beenspentin financial institutions . As a teacher , I hadprimary responsibility forcourses in moneyandbanking andmonetary theoryon boththeundergraduate and graduate levels . Later , as an economist on the staffof theFederal Reserve Bankof NewYork, I becamefamiliar withthetechniques of openmarketoperations employed by theTrading Deskof theBankin implementing the directivesof the FOMC. One of my responsibilities duringthistimewas theinitiation of thefirstdraftof thetri-weeklyReportof OpenMarketOperations to theFOMC. I alsoprepared forpublication in theBank'sMonthlyReview thearticle whichregularly described and interpreted developments in moneyandcapital markets . While servingas an adviserto the CentralBank of Nigeria, I had the rare opportunity to participate in thecreation of toolsand techniques forCentral Bank monetarycontrolin a largedevelopingcountry. I also helped in the developmentof theresearch department of thenewCentral Bank. Later , in theU. S. Treasury De partment's Division of International Affairs , I wasactively involved in the formation of V. S. financial policies withregardto thedeveloping countries of Asia, Africa , the Middle East, Australiaand New Zealand. As U. S. AlternateExecutiveDirectoron theboards oftheWorld BankandtheInternational Finance Corporation , I gained broadexperience in international development banking , whiletakingpartin policy decisions relating to economic development assistance . For thepasteightyears , I havebeena senior officer in a commercial bank working , amongotherareas , in moneytrading and investment operations . In this
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