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A n Address Before the
Joint Tech-Georgia Development F u n d
April 29, 1976

M o n r o e Kimbrel, President
Federal Reserve B a n k of Atlanta

A n Address Before the
Joint Tech-Georgia Development F u n d
April 29, 1976
M o n r o e Kimbrel, President
Federal Reserve B a n k of Atlanta

Being here with you today as w e review our needs and discuss
our plans for the future is indeed a pleasure.

Moreover, that pleasure

is enhanced by the knowledge that, since this is a fund-raising group,
w e m a y candidly acknowledge our purpose in meeting is to discuss
m o n e y - - n o subterfuges or apologies needed.
at hand immediately:

W e can get to the subject

the financial needs of the two Joint F u n d supported

schools, Georgia T e c h and the University of Georgia.
V e r y frankly, the situation has been critical and is, even now,
only slightly improved.

T h e schools entered the recessive year of 1975

working under severe financial restraints, especially with regard to
faculty salaries, and as the year progressed fiscal disaster w a s held
at bay only by the school foundations through which m o n e y raised by
the A l u m n i and the Joint Tech-Georgia Development F u n d is channeled.
In two of the five preceding years, there had been no m o n e y at
all for faculty salary increases.

T h e brutal truth of the matter is that


faculties at T e c h and the University had salary increases totaling 17. 5 %
over a five-year period while the rate of inflation had m o r e than doubled
that figure.
T h e situation w o r s e n e d early in 1975 w h e n the State Legislature
recinded the 5 % salary increases it granted earlier.

T he courts sub­

sequently ordered the raises reinstated, only to have the disclosure m a d e
that the m o n e y had already been diverted elsewhere and there w a s no w a y
to replace it.

T h e schools had to rob other items in their budgets to pay

for the faculty increases --approximately a million dollars at Georgia
T e c h and m u c h m o r e at the University of Georgia.
Non e of you will be surprised to hear that top teachers at our
schools began to leave for better paying positions.

F o r example, the

College of Veterinary Medicine at the University lost ten faculty m e m b e r s .
T h ese w e r e the m e n w h o helped develop the vaccine for Marek's disease,
which is saving the Georgia poultry industry over $25 million annually.
A n d in two months last year, Georgia T e c h lost m o r e faculty m e m b e r s
by resignation than in an average previous twelve months.
Without help f r o m corporations, m a n y of t h e m represented in this
room; without the loyalty of alumni; without special grants that took s o m e
of the salary load by funding special projects, this stream of faculty
losses could have b e c o m e a torrent.
It still can b e c o m e a torrent.

T h e raises for last year w e r e

restored, but there are no faculty salary increases available for 1976.

-3 -

T e c h and the University’ competitive position vis-a-vis other top
engineering schools and universities continues to worsen.
This distresses m e .
by the two schools.

I place a high value on contributions m a d e

M y awareness of their value c o m e s f r o m two p e r ­

spectives: A s an alumnus, I have first-hand knowledge of the educational
contributions of the University of Georgia; and, as President of the
Federal R e s erve B a n k of Atlanta, I head an institution that, like your
local operations, seeks to e m ploy top-flight talent f r o m this area.


k n o w these schools are able to provide their students with training, to
instill adaptability and inspire t h e m to accept challenges.
Let's discuss training, adaptability, and challenge.


as I see it, is the ability to bring something m o r e than knowledge to
the job.

It is insight, as well; an ability to go beyond outward appearances

and put developments into their proper perspective.
F o r example, economic forecasters are debating whether the
e c o n o m y will get support f r o m an increase in capital spending.


t e r m indicators of capital spending c o m m i t m e n t s point to sluggish plant
and equipment investment.

A n d the m o s t recent U. S. Department of

C o m m e r c e survey available indicated little change in 1976 expenditure
plans of business.

However, other elements lead to a different inter­

C o n s u m e r sales and industrial output increased substantially;

-4 -

corporate profits rebounded sharply; cash flow positions improved
vastly; and long-term interest rates fell.

T h e r e is reason for optimism.

A basis has been laid for a capital sector revival, especially a m o n g

It should help the economic expansion.

Another example of this need for insight is the fact that to s o m e
observers it appears very m u c h as if the battle against inflation has
been won.

T h e Wholesale Price Index w a s largely unchanged over the

last five months.
in February.

T h e rise in c o n s u m e r prices w a s only 0. 1 percent

But examine these conditions closely and the situation

a s s u m e s a different appearance.

T h e i m p r o v e m e n t is mainly in food

and fuel, w h e r e price reductions reflect last y e a r ’s b u m p e r crops
and the tariff elimination on crude oil imports.

Nevertheless, the

costs of c o n s u m e r services, medical care, insurance, and transportation
continue to mount.

Wholesale prices of industrial commodities also

are rising.
There are other inflationary pressures, but the point is not
that a return to flagrant inflation is imminent; only that inflation is
m o r e w o r r i s o m e than s o m e price statistics indicate.

Sizable w a g e

increases, low productivity gains, a turn-around in food and fuel prices,
and rising industrial product prices could accelerate inflation.
Y o u m a y ask what all this has to do with the University of Georgia
and Georgia Tech.
are complex.

Well, plainly, our problems, economic and otherwise,

W e need broadly trained people to help solve them.


-5 -

T e c h and the University each year c o m e s a pool of over 11, 191
young people trained to furnish the leadership for your business
and for all elements of the socia], political, economic and religious
life of our State.

C a n w e afford for t h e m to be other than the very best?

Training is equally essential for the faculty.

In addition to

superior training in their fields, faculty m e m b e r s need the capacity
to adapt their knowledge and to develop n e w knowledge , to the changing
problems of industry and society.
committed teachers.

Effective teachers are intensely

T h e y demonstrate the latest techniques and

T h e y convey the latest ideas and information.

But to

be effective, teachers m u s t be secure in their profession and safe
in their jobs so that they are able to concentrate on the challenges
and are not sidetracked by the threat of insecurity.
N o w , let us consider adaptability.
needs already discussed.

This attribute is related to

W e k n o w that to a large extent specialized

skills and methods are usually learned through on-the-job training;
yet, the employee m u s t bring to the job talents acquired earlier-the ability to apply principles to experience, interaction with other
people, methods of testing ideas, leadership development, and c o m ­
municating skills--to n a m e a few.
instilling adaptability in students.

Colleges can do a good job of


Finally, there are the challenges of the future.

W e k n o w people

can accept challenges eagerly and w o r k hard to achieve t h e m only to
falter and fail because they lack certain abilities that can be acquired.
Colleges can equip students to follow through on challenges by teaching
t h e m to weigh all the pros and cons; by demonstrating that perseverance
in spite of setbacks is essential to the outcome; by showing t h e m that they
m u s t concentrate on relevant details and forget the side issues; and by
encouraging t h e m to finish projects they begin.

Only people with these

abilities in addition to training and adaptability will solve our big problems
such as the energy crisis, poverty, housing, population control, disease
and hunger, to n a m e a few.
Of course, w e can hire people with these qualifications f r o m out of
state, but you and I k n o w it is a great advantage to upgrade the area in which
w e do business.

In addition, superior local education saves time and m o n e y

w h e n you send personnel back to college for m o r e development and training.
I have tried to demonstrate that our needs are your needs too.


have taken your time to ask that you help us to secure support f r o m your
c o m p a n y for the Joint Tech-Georgia Development Fund.

If your c o m p a n y is

not n o w on the list of those national firms which contribute each year, w e
need your backing.

If your c o m p a n y does support us, w e hope you will get

the m e s s a g e to those w h o m a k e the final decision that this year of all years
w e need increased support.

Y o u are in Georgia.

Y o u realize h o w important

T e c h and the University are to business in the State.
to help us and w e hope you will.

Y o u are in a position