Full text: Referendum on the report of the Special Federal Reserve Committee

Salaries of Board salaries are now palpably inadequate and incommen- 
surate with those which necessarily must be paid to both the reserve 
agents and the governors of the district banks. Some of the latter 
receive three and four times as much as members of the Federal 
Reserve Board. Their compensation must approach, at least, the 
salaries paid in the field of general banking, from which federal 
reserve management must be drawn. This Committee recommends 
that salaries be increased from the present figure of $12,000 to a 
minimum of $30,000 per annum for the Governor of the Board and 
$25,000 for the other members. Objection to these salary increases 
should not be made on account of conditions existing in the general 
governmental service. It is to be noted that salaries as well as other 
expenses of the Board are defrayed, as would be the cost of a sepa- 
rate building, from assessments upon the reserve banks and not upon 
the United States Treasury. 
The Committee recommends that provision be made to increase 
the attractiveness of Board membership and develod the influence 
ind independence of the Board by: 
(a) Enhancing the importance of the position of Governor of 
the Board by making him Chairman. 
(b) Housing the Board in a building of its own. 
(¢) Increasing the salaries of the Governor and members of the 
Federal Reserve Board to compare more favorably with the salaries 
paid the principal administrative officers of the reserve banks. 
Thoroughgoing consideration should be given to the relations of 
the Treasury to the Federal Reserve Board, especially with respect 
to discontinuing the membership of the Secretary on the Board, as 
well as to the desirability of a change in the status of the office of the 
Comptroller of the Currency to bring that office more directly under 
the purview of the Board. 
This Committee has insisted that the efficiency of the reserve 
system must depend upon wise administration. On this account, it 
has opposed the employment of legislative devices to restrict nar- 
rowly the powers of the reserve banks. 
Public Relations 
The grant of liberal powers to the reserve banks necessarily re- 
quires that there be complete recognition by them of their public re- 
sponsibilities. Neither the public in general, nor Congress, will be 
content to rely solely upon the probability that the administration 
will always be composed of far-sighted men. The activities of the 
reserve banks must be such as to insure confidence in the system’s 
general policies. Such confidence cannot be gained unless the proper 
type of criticism is stimulated. 
(Continued on paae 50)

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