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Remarks by
Federal Reserve Bank of Minneapolis

at the

Economic Policy and the Montana Press"
University of Montana
Missoula, Montana

April 26, 1968

Bill Rappleye, as befits a good newspaperman, asked why we were
holding this program, and why we were holding it here.

I answered these

questions in reverse order, as befits an ex-lawyer/CPA turned banker.


were holding it in Montana partly because those of us who have eaten the
lotus never quite get over the spell.

The lure of the mountains was

eloquently stated by the old lama in Kipling’ Kim, who said "He who
returns to the hills returns to his mother.M

Partly, though, it is because

Montana is perhaps the most broadly representative state in the Ninth
Federal Reserve District.

Although most Montana city dwellers are fiercely

partisan to the city of their residence and may quarrel with me, there is
no one community that dominates the state -- certainly not in the sense of
the Twin Cities in Minnesota and the eastern Dakotas.

Further, there is

almost an exact balance between rural and urban populations.

And of

course, with a second member of the fourth generation of our family about
to continue the family tradition at the University of Montana, a certain
partiality for the school is understandable -- even if the Journalism
School did not have an outstanding reputation.
But why are we holding this program at all?
several reasons.

Again, there are

Most importantly, it has to do with your business -- the

communication business.

You are our link with our public constituency.

Political, social, economic institutions have a responsibility - indeed,
an obligation - to make their operations understandable to the public.
The public has a right to know the whys and hows of these institutions,
be they public or private, that condition the environment of our society.
This has come hard.

Institutions have had various reasons for

keeping an aura of mystery about them.
course, has been linked to survival.

The most obvious of these, of
What the people understand they may





In partial defense of this position, although I do not support it,

there are many instances in the history of this country where change for
the sake of change has destroyed, or at least seriously weakened, the glue
holding society together.

I suggest there is more than a little of this

aimless motivation loose in the world today.

There is a value in the

familiar that must be considered and weighed, even though it may not be
the most efficient or the most desirable in a theoretical sense.
not have to have read Eric Hoffer's Ordeal of Change

You do

to have an awareness

of the dangers inherent in a period of too rapid social or economic change.
Even a cursory reading of the American press forces an awareness of the
ferment, the general unhappiness of most of the world, caused in large
measure by a destruction of old values and institutions before new ones
have been developed and accepted.
Then there is the enormous difficulty of explaining complicated
technical processes that have to be broadly understood before the policy
postures of an institution can be comprehended.
with this in your professions.

You are not unfamiliar

How many are the occasions when I have

heard a newspaper’ policy discussed and neatly demolished, usually at
suburban cocktail parties, for an apparent shortcoming in covering this
or that story.

The enormous complexity of modern news gathering and pub­

lishing is as little understood, I fear, as operations of a federal reserve

I am reminded ofrJack E. Haynes, dean of national park commissioners,

whose guidebook to Yellowstone was used by hundreds of thousands of visitors

ta the park over three or four generations.

It: usefulness was the

result of the meticulous biennial revisions to make sure every spot of
significance, however newly discovered, was reported and precisely located
within a tenth of a mile.

In this effort he usually enlisted the aid of




the then assistant superintendent, Joe Joffep', to serve as proof reader
and checker.

Item by item they would work their way through the galleys,

verifying distances, geyser eruption tables, animal counts, and the
myriad of other details.

One fall, when they finally reached the end,

Jack laid his pencil down with a sigh of relief, and contemplating the
pile of galley proofs in front of them, sighed to Joe and said, ,Joe, do
you suppose any reader of the Haynes guide has any idea just how much
trouble we go to, to produce this damn thing?” "No,1 was J o e fs rejoinder,
"but I d o n ’ think anyone gives a damn either."
But my point is, we have to try.
to be understood in however general terms.

Our public institutions have
The stakes are enormous.

There is no longer the slippage between changes in national policies and
the man in the street that a few years ago provided time for a smoothing
of the impact among the different sectors of the economy.
If the objectives--the national goals--are not clearly enunciated,
the public, or parts of it, cannot be blamed for pursuing their own
nihilist courses.

If the alternatives for action are not fairly presented,

the experts--and this is truly a nation now of experts who may have these
alternatives clearly in mind--cannot be heard to complain too loudly if
the public opts for the wrong ones.
And there is a respectable proportion of the public that is
interested and is capable of understanding these processes and goals.


are beseiged in our bank with requests for speakers and publications on
economic matters that ten years ago would have been as remote from public
interest and comprehension as nuclear fission.

It has occurred as a by­

product of the affluent society I suspect; and combined with the increase
in the general level of public education has created a knowledge market
that has not been well served.

I w o n ’ bore you with the statistics of




personal income, the number of investors, the number and kinds of books
There is a race going on in the United States--a race between
the raw power of aroused, confused, and unhappy people concentrated in
big groups that are just beginning to develop an awareness of their
ability to change patterns of production and distribution of wealth; and
the evolution of our public and private institutions to serve the total
needs of the U.S. in responsible ways within the framework of our society
as we have known it.

It is too early to prophesy the outcome of that

race, but we can and must influence it as best we can.

This means, above

all, informing people about their options in our economic system; the
pattern of national goals and priorities as they are viewed from our
particular vantage points; the price tags that are attached to all of
these--and there are price tags on each.

Full employment, stable prices,

economic growth, equilibrium in our balance of payments--these only rarely
are parallel objectives.
ment evaluation.

There nearly always must be a trade off, a judg­

And it is this judgment evaluation that ultimately must

reside in the people in a democracy.
In this process of communication an institution often falls
over its own feet.

There are, after all, limited ways to state your own

case--limits imposed by the nature of the institution itself.

No matter

how hard we try, there is always a danger of self-serving.
With regard to the former point, you have probably heard as much
as you care to about the need for fiscal action.
for this session.

That was not the reason

Believe me, our hearts are pure; and if our strength

today has been that of ten, praise the Lord and pass the tax increase.
But it was not our objective.

We believe as a matter of conviction, an

article of faith, that the news media are the nerves of the country along




which travel the bewildering barrage of stimuli received at the thousands
of points of exposure of people to people, institutions and their consti­
tuencies .
And may I make it abundantly clear, and change m y metaphor,
yours has to be an objective mirror for American citizens to view themselves
and their institutions.

This includes the Federal Reserve System and

that part of it which we represent, the Federal Reserve Bank of Minneapolis.
In this context you must have the total right to report monetary policy
as the story appears to you, not to us.

But we have the obligation to see

to it that the processes and goals developed within our institutional
framework are visible to you, which means in turn that you must do enough
homework to recognize them when you see them.


For you have the ultimate responsibility to make national policies
and the institutions that spawn them relevant to the public, to put them
into terms that can be understood.

There is an old political saw, "Let

the people decide.” The people are learning painfully that the U.S. is
not invincible--politically, economically, or militarily.
joint obligation to see that they know their alternatives.

We have a