The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
W R I G H T PATMAN, TEX.. C H A I R M A N H E N R Y S . REUSS, W I S . CHARLES A. VANIK. OHIO C L A U D E PEPPER. F L A . JOSEPH G . M I N 1 S H , N.J. C H A R L E S L. W E L T N E R . G A . RICHARD T . HANNA, CALIF. CHARLES H . W I L S O N , CALIF. HOUSE OF REPRESENTATIVES W I L L I A M B. W I D N A L L , N J . JAMES H A R V E Y . M I C H . O L I V E R P. B O L T O * ' . O H I O W . E. ( B I L L ) B R O C K , T E N N . ROBERT TAFT, JR., O H I O JOHN R. STA1K, CLERK AND STAFr D'RECT) SUBCOMMITTEE ON DOMESTIC FINANCE OF THE COMMITTEE ON BANKING AND CURRENCY EIGHTY-EIGHTH CONGRESS WASHINGTON, D.C. Deem x4247 Press Release f o r Sunday A.M. June 2 8 , 19S4 THE SUBCOMMITTEE ON DOMESTIC FINANCE OF THE HOUSE BANKING AND CURRENCY COMMITTEE RELEASES "PROPOSALS FOR IMPROVEMENT OF THE FEDERAL RESERVE" The Domestic Finance Subcommittee today submitted f o r c i r c u l a t i o n and discussion a set of c o r r e c t i v e proposals to strengthen the Federal Reserve System. A l l of the Democratic members of the Subcommittee joined i n t h i s action. The Republican members d i d not j o i n i n the r e l e a s e . The Democratic members of the Subcommittee are Wright Fatman, Chairman, ( D . T e x . ) , Henry S. Reuss ( D . W i s c . ) , Charles A. V a n i k , ( D . O h i o ) , Claude Pepper ( D . F l a . ) , Joseph G. M i n i s h ( D . N . J . ) , Charles L . Weltner Q . G a . ) , Richard T . Hanna ( D . C a l i f . ) , and Charles H. Wilson ( D . C a l i f . ) . The t e x t follows: "PROPOSALS FOR IMPROVEMENT OF THE FEDERAL RESERVE SUBMITTED FOR DISCUSSION BY THE SUBCOMMITTEE ON DOMESTIC FINANCE" "We have heard considerable testimony on the Federal Reserve System. The testimony strongly suggests that some r e v i s i o n o f the System i s i n d i c a t e d to improve future monetary p o l i c y and thereby our economy's performance, i n accord w i t h the Employment Act of 1946. A set of c o r r e c t i v e proposals which emerges from the testimony given before the Subcommittee i s presented herewith f o r f u r t h e r consideration. more - 2 - lf We are not suggesting, of course, t h a t these proposals cannot be improved upon. While the Subcommittee has not s e t t l e d on any s p e c i f i c proposal, i t intends to consider the e n t i r e set i n public hearings a f t e r the next Congress convenes i n January 1965. The proposals, though p r e l i m i n a r y and t e n t a t i v e , are c i r c u l a t e d a t t h i s time to allow f o r f u l l study and discussion by the Congress, the Executive Branch, the Federal Reserve, and the p u b l i c : A. To Emphasize the Public Character of the Federal Reserve: 1. Provide f o r the retirement of the Federal Reserve stock. 2. Vest a l l power to conduct open market operations i n the Federal Reserve Board. B. To Increase the Effectiveness of Monetary P o l i c y by Assuring the Recruitment of an Outstanding Federal Reserve Board and an Adequate Response to Advances i n Economic Knowledge: 1. Remove the present requirement that the P r e s i d e n t , in s e l e c t i n g Governors of the Federal Reserve Board ' . . . . s h a l l have due regard to a f a i r representation of the f i n a n c i a l , a g r i c u l t u r a l , i n d u s t r i a l and commercial i n t e r e s t s and geographical divisions of the c o u n t r y . 1 Instead require only that the Governors be men of i n t e g r i t y devoted to the public 2. interest. Reduce to f i v e the number of Governors of the Federal Reserve Board. 3. Reduce to f i v e years the terms of o f f i c e of the Governors and allow f o r reappointment. more - 4. 3 - Hake the t e r m o f the Chairman o f t h e Board o f Governors coterminous w i t h t h a t o f t h e P r e s i d e n t . 5. C. Raise the s a l a r i e s o f t h e Governors. To I n s u r e P u b l i c C o n t r o l Over the E x p e n d i t u r e s o f P u b l i c Monies: 1. P r o v i d e f o r a p u b l i c a u d i t by t h e C o m p t r o l l e r General o f a l l e x p e n d i t u r e s by the F e d e r a l Reserve Board and t h e Reserve Banks. 2. P r o v i d e f o r p a y i n g i n t o t h e T r e a s u r y as m i s c e l l a n e o u s r e c e i p t s a l l c a p i t a l gains and i n t e r e s t r e c e i v e d by the F e d e r a l Reserve from U. S. Government 3 securities. A u t h o r i z e a p p r o p r i a t i o n s by the Congress o f the expenses o f t h e F e d e r a l Reserve Banks and t h e F e d e r a l Reserve Board. D. To P r o v i d e S t a t u t o r y G u i d e l i n e s f o r Monetary P o l i c y and Assure C o - o r d i n a t i o n o f A l l o f the Governments Economic P o l i c i e s i n A c h i e v i n g t h e Goals o f the Employment A c t o f 1946. 1. Require t h a t t h e P r e s i d e n t s e t f o r t h i n h i s p e r i o d i c Economic R e p o r t s , i n c o n j u n c t i o n w i t h h i s recommendations on f i s c a l and debt management p o l i c y , g u i d e l i n e s c o n c e r n i n g monetary p o l i c y , domestic and f o r e i g n - - i n c l u d i n g the growth o f t h e money s u p p l y , as d e f i n e d by him — necessary t o a t t a i n t h e goals o f maximum employment, p r o d u c t i o n , and p u r c h a s i n g power o f t h e Employment A c t o f 1946. 2. Express tlie sense o f Congress t h a t t h e F e d e r a l Reserve o p e r a t e i n t h e open market so as t o f a c i l i t a t e more the - 4 - achievement o f the P r e s i d e n t 1 s monetary p o l i c y ; and r e q u i r e t h a t t h e F e d e r a l Reserve, i f i t s monetary views and a c t i o n s d i v e r g e from those recommended by t h e P r e s i d e n t , f i l e w i t h t h e P r e s i d e n t and t h e Congress a statement o f reasons f o r i t s d i v e r g e n c e , i n form l i k e the P r e s i d e n t ' s Economic R e p o r t . E. To A l l o w f o r G r e a t e r S p e c i a l i z a t i o n i n P e r f o r m i n g t h e Monetary Control Function: 1. P e r m i t the F e d e r a l Reserve Board t o c o n c e n t r a t e on monetary p o l i c y by t r a n s f e r r i n g i t s p r e s e n t bank s u p e r v i s o r y f u n c t i o n s t o t h e C o m p t r o l l e r o f the C u r r e n c y , t h e FDIC o r , a l t e r n a t i v e l y , t o a newly c r e a t e d F e d e r a l Banking a u t h o r i t y . ############ I n a d d i t i o n t o t h e f o r e g o i n g p r o p o s a l s , the Subcommittee recommends t h a t t h e f o l l o w i n g q u e s t i o n s p e r t a i n i n g t o F e d e r a l Reserve o p e r a t i o n s be s t u d i e d : (a) The e x t e n s i o n o f c o n t r o l o v e r reserve requirements so as t o cover a l l commercial banks. (b) The opening o f the d i s c o u n t window t o a l l commercial b a n k s . " end
@FedFRASER