The recently retired chairman of the Federal Reserve System, Alan  
Greenspan, is renowned for his ability to speak on policy issues without  
saying anything that would pin down the Fed's ability to alter the  
course of monetary policy.  As adept as Dr. Greenspan is at this art, he  
is not, perhaps, the best the FR System has ever seen.  As Exhibit A, I  
quote from an internal letter sent by Governor George Talley of the  
Federal Reserve Bank of Dallas in 1930 (as recorded in Elmus Wicker,  
_Federal Reserve Monetary Policy, 1917-1933_, p. 156.  
  
  
Directors were not impressed with the arguments which you presented ...  
they are unwilling to interpose direct action in a period of reaction to  
a previous period of action that perhaps, shall I say, was not  
courageous enough or did not go far enough in its preventive attributes.  
The thought is simply this - that a direct effort toward ease on the  
part of the System should not through artificial means transcend the  
force of the reaction measured by the forces of action at the high point  
of the force of action in the opposite circumstances ... We also think  
that it [N.Y.] should assume responsibility for what it does not do as  
well as what it does undertake, and that it should have the fortitude to  
meet a period of reaction and go through an era of readjustment  
patiently and calmly, acting in accordance with conditions as they are  
found, instead of undertaking to make conditions as they are desired,  
with the result of shaking their congestion out on the country.  
  
Got that?  
  
Neil T. Skaggs