2013년 3월 24일 일요일

[발췌: Michael S. Mayer's] The Eisenhower Years (Infobase Publishing, 2009)

자료: 구글도서


※ 발췌(excerpt): p. 469~

Martin, William McChesney

... of economic expansion and curtail inflation). He accomplished this chiefly by raising reserve requirements of backs belonging to the Federal Reserve System and by increasing the rediscount rate (the rate of interest charged by the Federal Reserve on loans to member banks).

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In the spring of 1953, Martin tightened credit to reinforce the Eisenhower administration's effort to fight inflation. At about same time, Martin made major speeches in which he asserted that the Federal Reserve's action must be held to a minimum.  His statement that "use of the discount window is a privilege not a right" led many dealers in government securities to conclude that the Federal Reserve would be cutting off credit to member banks. According to Fortune, "the 'bond panic' of Many 1953 followed. The Federal Reserve had to jump in with heavy open market purchases before apprehension subsided."

Over the decade, Martin steadily enforced a policy of tighter money. The rediscount rate rose from 1.5% in early 1954 to 3% by 1960. Democratic politicians and many economists denounced Martin's policy, charging that tight money was a major cause of the recessions of the 1950s. Martin persistently defended his actions. In December 1956, he argued that a proposed drop in interest rates would only increase the money supply and accelerate inflation. He insisted, moreover, that the credit crunch was due more to high demand for credit than to any action by the Federal Reserve. "Creating more money will not creat more goods," he maintained. "It will only intensify demands for the currency supply of labor and materials. That is outright inflation."

In addition to the direct impact he exerted on financial policy, Martin often added his prestigious counsel to public debates on other economic issues. Throughout the 1950s, he argued against Democratic proposals to stimulate the economy by cutting taxes. Opposing a congressional plan to lower personal income taxes, he said in February 1954: "If you increase the money consumers have ... there is no guarantee that the consumer will spend the money. ... Emphasis needs to be on the production side at this juncture." In June 1957, Martin argued that a proposed tax cut would make the Federal Reserve's effort to curb inflation "well-nigh impossible." During the recession 1958, he again opposed a tax cut to stimulate the economy.

In 1955, during the Senate Banking and Currency Committee's probe into fluctuations in the stock market, Martin defended his free market principles. Criticizing proposals to ban buying stocks on credit, he said: "The stock market should not be denied access to credit unless you want to promote a lower standard of living." He insisted that higher margin requirements were not "cure-alls for all stock market excesses" and defended risk-taking and speculation a the "proper function" of a securities market.

In 1956, Eisenhower appointed Martin to full 14-year term on the Federal Reserve Board of Governors. In the late 1950s, in spite of criticism, Martin maintained restrictions on credit. During the campaign of 1960, his policies became a topic of debate. Senator John F. Kennedy(D-Mass.) attacked tight money, and his Republican opponent, Vice President Richard M. Nixon, promised to uphold the "independence" of the Federal Reserve. After his defeat, however, Nixon blamed his loss in part on the Federal Reserve's slow response to the recession in 1960.
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During the 1960s, Martin remained to many conservatives the symbol of a sound dollar. To populists like Representative Wright Patman (D-Tex.), however, he represented policies that enriched big banks and Wall Street while choking small business. Martin got along well with President Kennedy and Johnson and eased monetary policy for a time to accommodate their stimulative fiscal policy. During the Vietnam War, interest rates rose to their highest levels since the 1920s, and Martin once again became the focus of controversy. In December 1968, President-elect Nixon, who wanted to name Arthur Burns to chair the Federal Reserve Board, offered Martin the position of secretary of the Treasury. Martin declined the offer and indicated that he intended to serve the remainder of his term on the Federal Reserve Board, which ran until January 1970.  (...)

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