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MEETING WITH CONGRESSIONAL REPRESENTATIVES FROM THE THIRD FEDERAL RESERVE PISTEICT AND BOARD OF DIRECTORS OF THE FEDERAL RESERVE BANK OF PHILADELPHIA Room S-120, Capitol, Washington, D. C. Wednesday, March 13, 19^9 (Remarks by KRB before Congressional Representatives from the Third Fed eral Reserve District and Board of Directors of the Federal Reserve Bank of Philadelphia on Wednesday, March 13, 1968, Room S-120, Capitol.) We are meeting just after a very dramatic event in international monetary developments — the meeting of international central bankers at Basle in which Federal Reserve representatives participated. This meeting emphasizes the importance of the balance of payments problem to our economy and the role that the Federal Reserve System plays in it. Perhaps we can discuss some aspects of the gold problem, if you have questions about it, later on. That problem, however, is illustrative of only one aspect of Federal Reserve System responsibilities. As you are aware, and as I indicated at our meeting in 1966, the Federal Reserve Banks are unique among economic and quasi-governmental institu tions. They have a triple responsibility — (l) for a contribution to monetary policy on a national scale, (2) for surveillance of economic developments in the various regions of their districts, and (3) for supervision of and service to banks, to other financial institutions, and the public. All of these responsibilities and functions are closely related. Of particular interest to you as Congressmen representing the various states and districts within our area, however, is the regional aspects of the work. In the creation of the Federal Reserve System, the Congress leaned heavily on the tradition of Regionalism which is so basic to our Federal politi cal structure. Although many things have changed since 191^ and the System's operations have been modified and adjusted, the regional aspects are still important and useful — not with Banks acting as advocates but rather reflecting various shades of opinion to form a picture which has greater depth than is - 2 - possible in a view from Washington alone. The orientation of Federal Reserve Banks to their regions is especially important today as urban problems demand much local action. Federal Reserve Banks are not directly involved in urban programs — though their member banks are — but they may be able to make important contributions not otherwise possible. civic programs. (Several of our officers are personally involved in Mr. Eastburn will give an illustration of research that is important to the System and useful for regional development.) There is another facet of Federal Reserve Regionalism which is worth mentioning. Now that official minutes of the Open Market Committee are published each month, some 90 days or so after the event, it has become obvious that there are frequent differences of view among the members of the Committee. The Bank president members of the Committee are, of course, influenced by what happens in their own bailiwick; yet, this is indicative of the constructive relation ships between the Federal Reserve Board and the Bank presidents, there are no views expressed that are derived fro* narrow regional interests, nor do the opinions of the respective presidents remain long on one side of some imaginary fence or another. In fact, there is no "fence." The views of the Bank president members, which voting his own conscience, are richer for their diversity of back ground and environment. There have been times in the not distant past when objectives of monetary policy were conflicting. This is not so today, as considerations of maximum employment, price stability, economic growth, and international balance all point in the same direction. Unfortunately, this consistency does not make the solution of our problems crystal clear. As always, however, the System is the stronger for its Regionalism and for its independence within the Government than it would be as a monolithic structure. Survey of Employment Growth in Metropolitan Areas of the Third Federal Reserve District Prepared for meeting of Congressional representatives from the Third District and Board of Directors of the Federal Reserve Bank of Philadelphia. m a r c h 13,1968 vNEW ! tv JERSEY M E TR O P O L ITA N A R E A S IN T H E TH IR D D IS T R IC T The Third Federal Reserve District is an urban area. Four out of five people in the District live in its thirteen metropolitan areas. Many of the District’s problems, therefore, are those of urban America. URBAN NON-WHITE FAMILIES-1960 Although most of the District's met ropolitan areas in 1960 had smaller concentrations of non-white families than did other metropolitan areas of the U.S., heavy concentrations existed in Philadelphia, Atlantic City, and Trenton. PerCent 0 — i— i— i ------- 1 | i— i i i AH District SMSA’s Ailentown-Bethlehem Easton Altoona ■ ■ \ Harrisburg Johnstown Lancaster m ■ 1 P N IaM pliia Reading Scraiton ■ i Wilkes-Barre-Hazleton Yorit m K I | Atlantic City Trenton W R n m ita i FAMILIES AT POVERTY LE V E L -1960 And although fewer families were living in poverty (incomes less than $3,000) than in all metropolitan areas of the U.S., some areas of the District had fairly large proportions of poor families. Poverty conditions undoubtedly have improved in the last seven years, but it is still safe to conclude that: (a) although the District as a whole is better off than many urban areas of the nation, (b) problems of poor and non-white families are great in some parts of the District 1 U N E M P L O Y M E N T R A T E S -1 9 6 7 u. s. Unemployment Rate All urban problems do not come from lack of jobs, but m any do. Unemployment in District areas as a whole is less than in their U.S. counterparts, but is higher in Altoona, Johnstown, Scranton, Wilkes-Barre-Hazleton and Atlantic City. SLUM UNEMPLOYMENT AROUND THE NATION, 1966 Per cent 0 1 ■ 1........ '! .. Cleveland (Hough) Phoenix (Salt River Bed Area) Oakland (Bayside) St. Louis (North Side) Los Angeles (South L. A.) San Francisco (Mission-Fillmore) t 1 1 1 ...... 1 Philadelphia (N. Phila.) Detroit (Central Woodward) New Orleans (Several Areas) San Antonio (E. & W. Sides) New York (Harlem) Boston (Roxbury) It is especially high in North Philadelphia where 1 out of every 9 people in 1966 were out of work. U N E M P L O Y M E N T TR E N D S -1 9 6 1 -1967 Th e best single solution to unemployment is national prosperity. In the past seven years of unprecedented economic expansion, unemployment in all the District's metropolitan areas has declined. All District S M S A 's Johnstown Scranton Wilkat-Bam-Hazleton Allentown-Bethlehem-Easton Percent 1961 1963 1965 Altoona Reading 1963 1965 Harrisburg Atlantic City E M P L O Y M E N T T R E N D S - 1950-1965 Millions Em ployed Thousands Employed 95 F 45 1959 1962 Thousands Employed To reduce unemployment further, however, many of the District's areas will have to accelerate their rate of growth. This will be hard to do be cause, as an older established manufacturing region, the District has been growing at a slower rate than the U.S. for some time. 6 D IS T R IC T A R E A S ’ S H A R E O F U.S. E M P L O Y M E N T -1950-1965 Per Cent As a result 13 metropolitan areas of the Third District hold a declin ing share of the employment of all metropolitan areas of the U.S. IMPORTANCE OF SLOW-GROWING INDUSTRIES-1965 A major problem in creating more jobs is that industries in many District areas are slow-growing. Most important of these are textiles, lumber and wood, petroleum, primary metals and transportation equipment DECLINING IMPORTANCE OF SLOW-GROWING INDUSTRIES-1950-1965 P »rOnt 70 60 SO 40 30 20 10 0 But a bright side to the future is the fact that slow-growing industries are becoming less important in all of the District’s metropolitan areas. Meeting with Third District Members of the Senate and House of Representatives Wednesday, March 13, 1968 Capitol Room S-120 12:30 p.m. I. Greetings and Introduction by Chairman Winn This meeting reflects the concern of the Directors of the Federal Reserve Bank of Philadelphia with their roles as overseers of the performance of the Federal Reserve Bank and, most importantly, as con tributors to the making of Federal Reserve policy. The object of this meeting is: II. (1) to bring the officers of the Bank before you to give you a glimpse of what the Bank is doing — not by way of a formal report, and certainly not for the purpose of discussing specific legislation, but in the spirit and recognition of the fact that the Federal Reserve System is a creature of Congress; (2) explore the possibilities of consultation on regional research and mutual regional problems; and (3) share our concerns as directors on monetaryfiscal matters and on the continuing strength of the Federal Reserve System. Statement by President Karl R. Bopp on Role of Federal Reserve Banks within the Federal Reserve System and the Interplay of Regional Developments and National Policies In the creation of the Federal Reserve System, Congress leaned heavily on the tradition of Regionalism. The Nation*s economy has changed greatly since 191^* but regional aspects are still important and useful. The Federal Reserve System does not act as advocate for regional policies but rather reflects varying shades of opinion to create a view of national problems which has great depth. - 2 - The Federal Reserve Banks are not d ir e c tly involved in programs for the solution o f urban problems, but th e ir re g io n al o rien tatio n nay make it po ssib le for them to make a more important contribution than would otherwise be p o s s ib le . III. Review o f Regional Economic Trends by David P . Eastburn The T h ird Federal Reserve D is t r ic t i s an u rbanized are a. Poverty conditions undoubtedly have improved in recent y e a r s , but i t is s t i l l safe to conclude t h a t , although the D is t r ic t as a whole is b etter o f f than many urban areas in the N a t io n , problems o f poor and nonwhite fam ilies arc great in some parts o f the D i s t r i c t . A major problem in creating more T h ird D i s t r i c t jobs is that in d u stries in many D is t r ic t areas are slowgrowing. Such in du stries are becoming le s s important in a l l o f the D i s t r i c t ’ s m etropolitan a re a s. IV . Review o f Trends in Banking Leading to Another " T i g h t " Credit S it u a tio n by David C. M e ln ic o ff An i l l u s t r a t io n o f the impact o f tec h n o lo g ic al and earnings pressure which h ig h lig h ts the d is p a r it y in reserve re q u ire rin ts between member banks and non member b an ks. DELAWARE MEMBERS IN THE CONGRESS OF THE UNITED STATES SENATORS John J. Williams Roan 2213 New Senate Office Bldg. (Millsboro, Delaware) J. Caleb Boggs Room ^109 New Senate Office Bldg. (1203 Grinnel Road Wilmington, Delaware) HOUSE OF REPRESENTATIVES William V. Roth, Jr. Room 1628 Longworth House Office Bldg. (2701 Centerville Road Wilmington, Delaware) K W JBHSEY MEMBERS II THE CONGRESS OF THE IMITI® STATES .SENATORS Clifford P. Case Roo® ^63 Old Senate Office Bldg. (1128 Bryant Street Rahway, lew Jersey) Harrison A. Williams, Jr. Boom 352 Old Senate Office Bldg, (231 Elizabeth Avenue Westfield, Rev Jersey) (Mr. Steven Paradise, a member of Senator Williame* staff, will attend in place of Senator Williams) *H O USE O F REPRESENTATIVES W i l l i a m T. Cahill - (Mr. Nicholas D. Heil, IIS Boom 2kk'3 Legislative Asst, R a y burn House Office Bldg. will attend in plaee (1009 Park Avenue of W. T. Cahill) C o l l i n g s w o o d , lew Jersey) W i l l i a m B. Widnall R oom 2329 Rayburn House Office Bldg« (Saddle River Road Saddle liver, lew Jersey) not in o«r District, but lie requested that lie be invited t o the Meeting.) (Mr. Widnall is John E. Hunt loom lUUO L ongworth House Office BUg, (Pitman, lew Jersey) Charles W. Sandman, Jr. loom 1610 Longworth House O ffice Bldg. (teas Park, lew Jersey) J. Howa r d Boom 1030 Longworth House Office Bldg. (1711 Marconi Hoad Wall Township, lew Jersey) James frank Thompson, Jr. loom 2kk2 Rayburn.louse Office Bldg, (383 West State Street Trenton, lew Jersey) PENNSYLVANIA MEMBERS IN THE CONGRESS OF THE UNITED STATES SENATORS REPRESENTATIVES - Continued Joseph S. Clark Room 361 Old Senate Office Bldg. (9th and Chestnut Streets Philadelphia, Pa.) YES William J. Green, III Room 1128 Longvorth House Office Bldg. (120U Wakeling Street Philadelphia, Pa.) Hugh Scott Room 2o0 Old Senate Office Bldg. (Room hOOU, U. S. Courthouse Philadelphia, Pa.) NO George M. Rhodes Room 2210 Rayburn House Office Bldg. (505 Brighton Avenue Reading, Pa.) YES William A. Barrett Room 230U Rayburn Hou;s Office Bldg. (232U Reed Street Philadelphi a, Pa.) Lawrence G. Williams Room 1T^0 Longworth House Office Bldg. (56 S. Brookside Rd. Springfield, Pa.) YES Robert N. C. Nix Room 2201 Rayburn House Office Bldg. (2139 N. 22nd Street Philadelphia, Pa.) Edward G. Biester, Jr. Room 17IT Longworth House Office Bldg. (Mountain Rd. Furlong, Pa.) NO James A. Byrne Room 2^12 Rayburn House Office Bldg. (2315 E. Cumberland Street Philadelphia, Pa. G. Robert Watkins Room IOI5 Longworth House Office Bldg. (Oakland Road, R. D. 5 West Chester, Pa.) YES Joshua D. Eilberg Room 1130 Longvorth House Office Bldg. (1522 Longshore Street Philadelphia, Pa.) Joseph M. McDade Room 1131 Longworth House Office Bldg. (16 U5 N. Washington Avenue Scranton, Pa.) YES Daniel J. Flood Room 108 Cannon House Office Bldg. (U60 N. Pennsylvania Ave. Wilker.-Barre, Pa.) HOUSE OF REPRESENTATIVES - 2 ~ HOUSE OF REPRESENTATIVES - Continued YES J. Irving Whalley Room 1235 Longworth House Office Bldg. (1309 Park Avenue Windber, Pa. - near Altoona) YES Richard S. Schveiker Room ^08 Cannon House Office Bldg. (Skippack Pike Worcester, Pa. - Montgomery Co.) YES Fred B. Rooney Room 1511 Longworth House Office Bldg. (326 Wyandotte Street Bethlehem, Pa.) YES Edwin D. Eshleman Room IOO9 Longworth House Office Bldg. (2820 Spring Valley Rd. Lancaster, Pa.) YES Herman T. Schneebeli Room llll+ Longworth House Office Bldg. (870 Hollywood Circle Willi amsport t Pa.) YES George A. Goodling Room 171^ Longworth House Office Bldg. (Loganville, Pa.) YES John P. Saylor Room 235^ Rayburn House Office Bldg. (1*11 Orchard Street Johnstown, Pa.) YES Albert W. Johnson Room lU32 Longworth House Office Bldg. (U09 Franklin Street Smethport, Pa.)
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