FREE ELECTRONIC LIBRARY - Dissertations, online materials

Pages:     | 1 |   ...   | 43 | 44 || 46 | 47 |   ...   | 51 |


-- [ Page 45 ] --

Mr. HAMLIN. There was a conference at which the various central banks of issue of Europe and the Federal reserve system got together to consider the whole subject of reporting statistically as to banking conditions; making reports as to production and distribution, etc. In other words, the foreign central banks have watched very carefully what the Federal Reserve Board has done, beginning, as Doctor Miller testified, about 1923. Having found that the reserves were no longer a positive indicator of credit policy, the board began, as has been told you, to secure very comprehensive production and distribution data, and Europe has followed that with very great interest.

They have not advanced over there as we have under our system, and they wanted to go into the whole question with a view to learning exactly what our operations were, in the hope that they might extend the same principles over there. That was the sole purpose of the conference.

The CHAIRMAN. I suppose that would enable them more intelligently to cooperate in the various conferences that necessarily will have to take place between the banks of issue in the future.

Mr. HAMLIN. Yes; you have expressed it better than I could.

That is absolutely so. That was the sole purpose; and Doctor Burgess and Mr. Goldenweiser went over and attended that conference.

Mr. KING. What authority did they have to do that?

Mr. HAMLIN. The general authority that I think is given to the Federal Reserve Board in connection with matters of that kind— general investigation.

Mr. KING. YOU think that without this bill the Federal Reserve Board would have authority to do that?

Mr. HAMLIN. Oh, yes. We carefully looked into that before we did it.

I want to say that I consider Mr. Goldenweiser and Mr. Burgess probably easily among the best equipped men in the United States for that purpose. They each have published valuable books on the Federal reserve system. Mr. Goldenweiser is the director of our research bureau. Mr. Burgess is assistant Federal reserve agent of the Federal Reserve Bank of New York. I really felt proud that we could send such men over there to explain the modus operandi of our system.

Mr. KING. DO these European banks desire, and is it their ultimate object, to get legislation in this country which will cut down the Federal reserve money?

Mr. HAMLIN. I have never heard of any such desire. This had solely to do with the reporting of the movements of trade and similar banking statistics.

1502&—28 -26

–  –  –

Mr. HAMLIN. I will say that these figures have been carefully gone over, and that they are correct. The conclusions you may draw from them are, of course, your own; and mine are as I state them.

This covers a period of five years. Briefly, you are asking now whether the open-market operations contributed to the expansion or inflation. In only two of the five years did the Government securities and acceptances held by the Federal reserve banks increase in amount. During the first year—1923 to 1924—as you have already heard in the testimony, the holdings of Government securities increased $492,000,000. That amount was poured into the circulation;

into the credit pool. Of course, ordinarily that is an enormous amount of money. You would think it would have a very vital effect. But when you realize that in that year the banks paid off, not the $492,000,000, but $620,000,000 of discounts, you see that washed right out; and they had $100,000,000 to spare. In addition to that, in that first year there were net gold imports of $342,000,000, and the total Federal reserve credit did not increase at all—on the contrary, it decreased, although the Government securities increased about $500,000,000. The Federal reserve credit total decreased, because of the large amount of discounts that were wiped out.

Now, taking the same analysis, in three of the years the total Federal reserve credit increased; but in those three years this table shows that the Government securities and acceptances held by the Federal reserve banks decreased. So I say that the only conclusion I can draw from that table is that the open-market operations, taken over this long period, had no permanent appreciable effect in the way of expansion.

The CHAIRMAN. In that connection, do you figure that the openmarket operations are essential to the management of the Federal reserve?

Mr. HAMLIN. I do.

The CHAIRMAN. YOU think that in the carrying out of the Federal reserve policy the open-market transactions are necessary and helpful?

Mr. HAMLIN. I think that the open-market operations are the very heart of the Federal reserve policy, as was well said by Doctor Miller on May 9 in his testimony before the committee. I am frank to admit that they have not worked out exactly as we hoped and expected they would, because of the fact that where we have, for example, Government securities and sell them, we take that money out of the market; the banks come right in and rediscount, and it offsets, and vice versa. I think if we were to abolish the open-market operations it would leave our system practically an emergency system. If that were done, we would have to sit back until the banks came to us.

With the open-market operations we can go to the banks. We can throw our securities in the market and take out the money, and then they have to come in and rediscount; and that gives us a better hold on the situation than any discount rate could.

The.CHAIRMAN. Doctor Miller referred the other day to the limitation on these powers of the board in open-market operations.

Should the board be specifically limited as to open-market operations so as to require the affirmative vote of five members of the board ?

Mr. HAMLIN. I believe not. With discount rates we have the right to approve or disapprove them by a majority vote of the board, and

–  –  –

the power on its own initiative to put in a rate over the heads of the directors of the bank, and that is what was done in the Chicago case.

The CHAIRMAN. The board, then, is relying on the opinion of the Attorney General as regards the law in that respect?

Mr. HAMLIN. Absolutely. But, of course, in that particular case there was great difference of opinion. For example, some of the members admitted that the board had the power, because the Attorney General had told us we had the power; but, having the power, they believed it was a power that should not be exercised at that time. That was one of the questions before us. Of course, the board, having been advised by the Attorney General that it had the power, is bound so to regard the law. Under the statute they are bound by an opinion of the Attorney General. So we were bound to take up that case on the assumption that we had the power. The only question was whether we should exercise it.

Mr. STEAGALL. Mr. Hamlin, if I understand you correctly, the board is now operating with the accepted view that they have the power, not alcme to review or to regulate but to initiate the rates in the different districts?

Mr. HAMLIN. Yes, sir; we are bound to take that view, the Attorney General having so advised us.

Mr. STEAGALL. The different banks, under the law, accommodate one another whenever it is desirable and practicable to do so, do they not?

Mr. HAMLIN. YOU mean inter-Federal reserve bank rediscounts, as they call them ?

Mr. STEAGALL. Yes; in the matter of loans.

Mr. HAMLIN. Yes; the board has the power to do that.

Mr. STEAGALL. In other words, one bank borrows from another bank?

Mr. HAMLIN. One Federal reserve bank borrows from another;

yes. The board has the power to direct them to do it, also.

Mr. STEAGALL. Yes. They not merely review that action or regulate it, but they have the power to direct that that be done ?

Mr. HAMLIN. By an affirmative vote of five members.

Mr. STEAGALL. Well, I do not see why they should not have it. I did not have in mind that provision of the law for the moment. Here is the question I wanted to ask: In view of all those things, why should not the Federal reserve rate be the same in all the banks at all times?

Mr. HAMLIN. That raises a very broad question. It was so designated in the Aldrich Act, as you know. It was provided there that there should be a uniform rate. I think the framers of that act abandoned that idea. They felt that it would not operate.

Mr. STEAGALL. The Aldrich plan differed, though, from the present law, if I understand it, in that the present law has the 12 districts, whereas the other contemplated a central bank.

Mr. HAMLIN. One central bank, with branches. Here we have 12 practically independent banks subject to the general control of the Federal Eeserve Board.

Mr. STEAGALL. Each operating in a particular section of the country.

–  –  –

dered if it might not be practical and wise to establish one rediscount rate for all 12 banks.

Mr. HAMLIN. Personally I do not believe it would be wise.

Mr. STEAGALL. Does it not almost work itself out that way naturally ?

Mr. HAMLIN. Yes; at the present time.

Mr. STEAGALL. It has occurred to me that probably it would be a good thing to do it by rule.

Mr. HAMLIN. There has been a tendency actually toward uniformity. When we began, the rates differed, and gradually they got together. Of course the war conditions had something to do with that. They were uniform, as a matter of fact, when we put in the lower Chicago rate, and the other banks went down, and the uniformity continued. But to my mind, in the theory of the law, it would not be wise or proper to put in, if we had the power, one uniform rate, although a uniformity might be reached as the result of the conditions in the various districts of the United States.

Mr. STEAGALL. Well, of course, if conditions should be the same in each district, the presumption arises that the rate would be fixed the same in each district; but inasmuch as they are so nearly the same, and in view of the fact that each bank has access to the resources of every other bank, as a practical proposition, I have wondered if it might not be well for the board to fix a uniform rate for all of them. But I am not attempting to set up my judgment on that or to reach a conclusion about it.

The CHAIRMAN. There is just one other question that you have not answered, and that was, Should the power be limited as to openmarket operations, so as to require a unanimous vote of five members?

Mr. HAMLIN. I do not believe that would be advisable. I think, having the power by majority vote to disapprove or approve discount rates, we should have the same power, assuming that such power exists, of approving or disapproving in connection with openmarket operations.

The CHAIRMAN. DO you think that the law should be changed so as to give you more power over open-market operations than you have now?

Mr. HAMLIN. N O ; I do not see any necessity for any change in the law. The Federal Reserve Board is not an operating board. I think we have ample power now. As I said before, there may be some question as to the legality of our complete power over open-market operations, but, in fact, there is no question that we are exercising the power. Every act of the open-market committee is incidentally reported to us. The question of giving them authority in emergencies is passed on by us and determined, and occasionally that question comes up where they come and get specific authority. So, as a matter of fact, I see no necessity at all fox any change in the law.

The CHAIRMAN. DO you think there is a leak of Federal reserve credit into the stock market, for instance ?

Mr. HAMLIN. I do not think it is possible, looking at the expansion that is taking place, to deny that indirectly what we call Federal reserve credit has'leaked into the market, but I do not see any practicable way of stopping that. For instance, commercial paper is discounted by a bank. The man that gave that paper may have

–  –  –

rower, we have told them the situation and I think we have cleaned it up very effectively, and I believe that in ordinary times the existing laws are adequate.

I think, however, that there should be a change in the laws as to reserves, and on that subject the governor, I think, may have something to say to this committee later.

The CHAIMAN. One other question, now, before you leave. Some statements have been made here about these various conferences that have been held by the heads of some of the Federal reserve banks here with the central banks of issue abroad, more in the form of conversations or informal conference, and it was stated here that the board has no record of these meetings and they were not authorized.

Have you anything to say on that subject?

Mr. HAMLIN. Well, I presume you have in mind, for example, the conference or the coming over here last year of the European representatives The CHAIRMAN. Yes; it was stated here before this committee by Doctor Miller that as a result of the conference in New York participated in by the governors of the Bank of England and the Bank of France and the Reichbank, an informal conference took place here in Washington, after which the discount rate was lowered, and it was stated that there were no minutes or no authority except that the raise in discount rate was the result of those conferences.

Mr. HAMLIN. I think I can speak accurately from memory. Those gentlemen came over here to confer with the Federal Reserve Bank of New York. My recollection is that the board was duly advised that they were coming over. They did come over, and shortly after arriving they all came down to Washington and the governor of the board gave them a lunch and we were with them perhaps an hour or two and then they proceeded back to New York.

Their visit to Washington was purely, as I understand it, a visit of courtesy. I talked with most of them. We had nothing to say about discount rates, merely general conversation, conditions in Europe, and conditions in the United States, and I assume that that was their sole purpose—to pay their respects to the President and the Secretary of the Treasury and the board.

Then, if my memory is correct, they had a conference, a general talk, with the directors of the Federal reserve bank in New York, and my impression is that the members of the open-market committee were also there—I am not sure about that, but that is my distinct impression. Governor Crissinger went on and attended that conference.

Pages:     | 1 |   ...   | 43 | 44 || 46 | 47 |   ...   | 51 |

Similar works:

«Migration and Livelihood Transitions of Rural Farming Households by Seung Yong Han A Dissertation Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy Approved November 2014 by the Graduate Supervisory Committee: Scott T. Yabiku, Chair Jennifer E. Glick Victor Agadjanian ARIZONA STATE UNIVERSITY December 2014 © 2014 Seung Yong Han All Rights Reserved ABSTRACT The main purpose of this dissertation is to examine the effects of migration and household capitals...»

«ENVIRONMENTAL AND AGRONOMIC EVALUATION OF VALUE-ADDED NITROGEN FORTIFIED POULTRY LITTER AND BIOSOLIDS FERTILIZERS ENVIRONMENTAL AND AGRONOMIC EVALUATION OF VALUE-ADDED NITROGEN FORTIFIED POULTRY LITTER AND BIOSOLIDS FERTILIZERS A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Crop, Soil, and Environmental Sciences By Mark Stephen Reiter Virginia Polytechnic Institute and State University Bachelor of Science in Crop and Soil...»

«HAIL, HAIL, HAIL ! THE SUMMERTIME HAZARD OF EASTERN COLORADO Nolan J. Doesken, Assistant State Climatologist (Colorado Climate publication, April 1994, Volume 17, Number 7, Special Feature Section) INTRODUCTION Hail ! the word itself sends feelings of frustration through Colorado farmers. Each year, millions of dollars of agricultural losses occur when hailstorms s weep across the Eastern Plains. Hundreds of Colorado wheat farmers can tell tales of disappointment about years when their crop had...»

«ANDREW G. VAUGHN Gustavus Adolphus College 800 West College Ave. St. Peter, MN 56082 507–933–7475 (O); 507–934–1225 (H) email: avaughn@gustavus.edu http://www.gac.edu/~avaughn POSITIONS HELD Associate Professor of Religion: Gustavus Adolphus College, St. Peter, MN. Appointment with continuous tenure in area of Hebrew Bible. 2002 – present. Chair, Department of Religion: Gustavus Adolphus College, St. Peter, MN. 2003 – present (on sabbatical 2004–5 academic year). Supply Preacher:...»

«As. J. Food Ag-Ind. 2012, 5(02), 96-103 Asian Journal of Food and Agro-Industry ISSN 1906-3040 Available online at www.ajofai.info Research Article Effect of vacuum cooling on physico-chemical properties of organic coriander Apichart Sirinanuwat1, Danai Boonyakiat 2,3 and Pichaya Boonprasom 1,3* 1 Division of Food Engineering, Faculty of Agro-Industry, Chiang Mai University, Thailand, 50200 2 Department of Horticulture, Faculty of Agriculture, Chiang Mai University, Thailand, 50200 3...»

«SAFETY DATA SHEET Section 1. Identification Ammonia, Anhydrous Product Name: Synonyms: Ammonia CAS REGISTRY NO: 7664-41-7 Supplier: Tanner Industries, Inc. 735 Davisville Road, Third Floor Southampton, PA 18966 Website: www.tannerind.com Telephone (General): 215-322-1238 Corporate Emergency Telephone Number: 800-643-6226 Emergency Telephone Number: Chemtrec: 800-424-9300 Recommended Use: Various Industrial / Agricultural Section 2. Hazard(s) Identification Hazard: Acute Toxicity, Corrosive,...»

«Freshwater prawn (Macrobrachium rosenbergii) farming in Greater Noakhali Districts Catherine Lecouffe January 2005 The Greater Noakhali Aquaculture Extension Project (GNAEP) is a project of the Government of Bangladesh (GoB) supported by Danish International Development Assistance (Danida), under the overall responsibility of the Ministry of Fisheries and Livestock (MoFL) and implemented by the Department of Fisheries (DoF). The project began in July 1998 and has been extended until June 2006....»

«Faculty of Natural Resources and Agricultural Sciences Department of Urban and Rural Development Rural Development and Natural Resource Management Dispute or Residing Together in Harmony? Bean Cultivation and Theft in Rural Ethiopia Tesfanesh Zekiwos Gichamo Uppsala 2011 EX0681 Master Thesis 30 hp Dispute or Residing Together in Harmony? Bean Cultivation and Theft in Rural Ethiopia Tesfanesh Zekiwos Gichamo Swedish University of Agricultural Sciences Department of Urban and Rural Development...»

«Dorinne Dorfman Planning and Changing Vol. 35, No. 3&4, 2004, pp. 143–153 THE LUCKIEST LITTLE HIGH SCHOOL: THE POSSIBILITIES AND PANGS OF COMMUNITY DEMOCRACY Introduction The rapid transformation of a secondary school from a bureaucratically regimented institution to a student-centered learning environment advocating democratic practices merits review. During its third year of progressive reform, this gem was discovered among the ashes of high-stakes assessment and corporate infiltration in...»

«FREQUENTLY ASKED QUESTIONS (FAQs): MINNESOTA’S STAFF DEVELOPMENT STATUTES Minnesota Statutes, sections 122A.60 and 122A.61 Created September 2001 Updated July 2002, March 2006, February 2008, November 2010, August 2013 In response to many interpretation and implementation questions about Minnesota’s staff development statutes, the organizations listed below have jointly developed this set of Frequently Asked Questions (FAQs). The statutes discussed in this set of FAQs can be found at Minn....»

«Remote estimation of chlorophyll concentration in productive waters: Principals, algorithm development and validation A.A. Gitelson, Y.Z. Yacobi, D. C. Rundquist, R. Stark, L. Han, and D. Etzion Anatoly A. Gitelson is a professor with both the School of Natural Resource Sciences, Institute of Agriculture and Natural Resources, University of Nebraska-Lincoln, USA and the Institute of Desert Research, Ben-Gurion University of the Negev, Israel. Gitelson holds a Ph.D. in Radio Physics (Russia,...»

«52 Chimera 26: Geographical Journal, University College Cork Suburbia: social and spatial trends that emerged in Celtic Tiger Ireland. Matthew Williams Department of Geography, University College Cork, Ireland. Long after the roar of the “Celtic Tiger” has become inaudible; its effects remain in the form of ghost estates, incomplete rural development and inadequate service provision across the Irish landscape. This paper will give a brief account of suburban housing development in Ireland...»

<<  HOME   |    CONTACTS
2016 www.dissertation.xlibx.info - Dissertations, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.