196

money market is in New York, it takes no imagination to deduce that 

New York bankers may be interested in changes of the rate and often 

attempt to influence it.

Norman Lombard, in the periodical "World’s Work" writes that:

"In their consideration and disposal of proposed changes of policy, the 

Federal Reserve Board 

 

 

 

 

 

 

 

 

 

should follow the procedure and ethics 

observed by our court of law. Suggestions that there should be a 

change of rate or that the Reserve Banks should buy or sell securities 

may come from anyone and with no formality or written argument. The 

suggestion may be made to a Governor or Director of the Federal 

Reserve System over the telephone or at his club over the luncheon 

table, or it may be made in the course of a casual call on a member 

of the Federal Reserve Board. The interests of the one proposing the 

change need not be revealed, and his name and any suggestions he 

makes are usually kept secret. If it concerns the matter of open market 

operations, the public has no inkling of the decision until the regular 

weekly statement appears, showing changes in the holdings of the 

Federal Reserve Banks. Meanwhile, there is no public discussion, there 

is no statement of the reasons for the decision, or of the names of 

those opposing or favoring it."

123

The chances of the average citizen meeting a Governor of the Federal 

Reserve System at his club are also slight.

The House Hearings on Stabilization of the Purchasing Power of the 

Dollar in 1928 proved conclusively that the Federal Reserve Board 

worked in close cooperation with the heads of European central