https://www.atlantafed.org/about/publications/atlanta-fed-history/first-75-years/the-postwar-period

lthough Fed economists worried about a repetition of the post-World War I economic turbulence as World War II wound down, the economy heading their way was different from anything they had seen. The war had stoked the fires of industrial production, and the diversion of output to the war effort had postponed a lot of consumption. After 15 years of back-to-back crises, the nation and its central bank were about to taste peacetime prosperity.

Neely’s theories of enlightened management were formally extended to southern agriculture as soon as the war ended. A program to “aid agriculture and thereby improve the economic and social conditions” of southern communities was inaugurated in July 1945. Its purpose was to promote soil conservation, improve pastures, and carry out reforestation. Although the economy of the District depended less on agriculture than it had before the war, agriculture was still important and still plagued by problems. The Atlanta Fed encouraged its agricultural economists to write and speak, wherever they could find an audience, on progressive, scientific agricultural management. Some board members objected that the program seemed to be directed at farmers instead of bankers, and adjustments were made, but over the substantial lifetime of the program it would be directed at both groups.

Economists from the Atlanta Bank regularly spoke at the meetings of agricultural bankers during the 1950s and 1960s. In 1950, for example, the annual report of President McLarin noted, “The agricultural relations program is conducted in close cooperation with the agricultural committees of the State Bankers Associations. One phase of such cooperation is represented by banker-farmer meetings which are sponsored by the State Bankers Associations, the State Agricultural Colleges and the Bank. During the year three such meetings were held in Florida, two in Alabama, three in Mississippi, five in Tennessee, and three in Louisiana. Most of the meetings were held on farms where the results of improved pastures, proper forestry practices, and sound bank credit could be demonstrated.”

Postwar improvements began to affect bank operations as well. The Bank started to use armored cars, rather than the post office, for its currency shipments, thereby saving substantial amounts in expenses. A switching center for the System, opened at the Richmond Bank in 1953, improved communication among the Reserve Banks and branches. A policy change in 1953 allowed unfit currency to be destroyed at District Banks instead of being shipped to Washington, and the Atlanta Fed ordered a shredding machine and installed an incinerator, which by May 1954 was burning 900,000 bills each day. The existing accumulation of 26,653 bundles could be burned within seven weeks, First Vice President Lewis M. Clark estimated. By December 1954 the Bank’s personnel payroll records were placed on a precomputer IBM system.

The processing load increased sharply through the 1950s. Between 1952 and 1956, for example, the Bank saw growth of 64 percent in coin handled. The annual volume of checks processed, after increasing from 58.5 million in 1941 to 142.5 million in 1950, rose more sharply to 198 million by 1952 and then to 266 million by 1957. The handwriting on the wall was clear: Federal Reserve Banks would have to be prodigious check-moving factories. Operations were strained in 1956, Clark reported. The Bank was paying overtime and having trouble recruiting and training enough employees. The few primitive machines that assisted the effort were back-ordered, with delays running a year and a half.

As men returned from the war, the ratio of male to female employees began to shift; women dropped from 79 percent of the work force in 1944 to 62 percent in 1951. In Jacksonville, women had comprised 87 percent of the staff during the war. The number of Sixth District employees, from a wartime high of 1,685 and a postwar low of 800, rose to 1,326 by 1956. In an effort to reduce turnover the Bank studied employment patterns from 1947 through 1954 and found that 25 percent of the 2,136 who had left during that period were 19 years old or younger, and that 80 percent were under 30. The most common causes for departure were accepting another job (397), moving from the city (314), and “maternal reasons” (311).

Malcolm Bryan moves up

In September 1946 First Vice President Malcolm Bryan had resigned to accept an executive position with Atlanta’s Trust Company Bank. The move surprised the Atlanta Fed staff, who were used to seeing Bryan

Malcolm Bryan, the Bank's first economist and its president from 1951 to 1965.

in conference with Neely and to hearing great things about their prized economist. There was a sense, in many quarters, that he was the future of the Bank. When he left, some people concluded that McLarin finally had succeeded in getting rid of Bryan, with whom he had clashed frequently over the management of the Bank. Others at the Atlanta Fed thought Neely wanted Bryan to get some commercial banking experience so that he would be better received by member banks if he were some day to become president. Trust Company officials recall that they recruited Bryan to fill an executive void, noting that both the bank’s chairman and its president had died shortly before Bryan was hired. They acknowledge, however, that the cerebral economist who had never worked for a commercial bank was not in the running for one of these top two slots. Another factor may have persuaded Bryan to leave. His great interest was monetary policy, and the peg had short-circuited monetary policy. There was, in 1946, little for him to do in the field he loved most.

Neely and Bryan stayed in touch after Bryan’s move; Bryan would come by the Bank occasionally, and the staff there regarded him as not completely out of the picture. Lewis M. Clark was named first vice president. He was a courtly Mississippian who had risen through the ranks at the Bank since 1918 and had managed the New Orleans branch for several years. Clark was promoted with the stipulation that he was not being designated McLarin’s successor. Under Neely’s supervision, McLarin and Clark managed the Bank during the immediate postwar period.

In the same month that the Fed and the Treasury Department negotiated an end to the peg and restored monetary control to the Fed (March 1951), Bryan returned as the new president of the Federal Reserve Bank of Atlanta. His return was made possible by the decision a month earlier of President McLarin to take early retirement at age 61, a decision McLarin reached with the help of Frank Neely, Federal Reserve Board Chairman Thomas McCabe, and a $37,359 appropriation from the Atlanta board to give him full retirement benefits. Bryan’s hour, they decided, had come. Thus ended the presidency of McLarin, the self-trained Reserve Bank operations pro who, almost by accident, became the Bank’s president during its frantic, operations-dominated World War II growth period.

Bryan gave the Bank a world-class economist at its head at a time when the System was consciously perfecting its monetary policy tools. Bryan had been included in the Treasury delegation that went to Bretton Woods, New Hampshire, in June 1944 for the international summit meeting which created the International Monetary Fund (IMF) and the World Bank, pioneering agencies for the global economy that would follow a global conflict. When U.S. monetary policy was employed again in earnest after the removal of the peg in the early 1950s, Bryan joined Chairman Martin and another governor on an FOMC subcommittee that in 1952 set the tone for future open market operations. They recommended that System intervention in the market be kept to a minimum to reduce uncertainty among market participants and that transactions be confined to short-term issues.

Through the generally prosperous 1950s and early 1960s Bryan was one of the economic doctors who watched the thermometer dip during a couple of mild recessions and rise with a couple of inflationary fevers; he helped to prescribe the raising or lowering of the discount rate a fraction of a percentage point or the buying or selling of government securities to adjust reserves. Chairman Martin repeatedly called Bryan “unique” and later concluded that “no one had made a greater contribution to the FOMC in the years of his tenure than Malcolm Bryan and . . . only one or two have come anywhere near equalling it.”

Bryan also testified before a number of congressional committees, which were suspicious that the Fed had accumulated too much power. During the traumatic Depression and war years, the sense of crisis had silenced quibbles about the concentration of economic power in a truly central bank, but prosperity was encouraging populists like Texas Congressman Wright Patman, chairman of the House Banking Committee, to challenge the Fed. With his economic sophistication and impressive lecturing skills, Bryan became a popular spokesman on behalf of the Federal Reserve System, traveling to the nation’s capital to confront Patman in the hearing room.

Two events in 1953 made the Bank more cognizant of its own history. In January J.A. McCrary died, and in December Frank Neely retired. McCray was the last of his breed anywhere in the Federal Reserve System: an original 1914 director who had served continuously for nearly 40 years. He was never a leader at the Bank, but he had been an active director, a participant in the 1926 Cuban expedition, the perennial chairman of the building committee, and a supporter of various governors, presidents, and chairmen. McCray coveted his board post, friends recall, and fought for reelection several times in earlier years, before he eventually came to “own” the seat as a patriarch’s privilege. The System, since 1936, wanted rotation among directors of District Banks, but no one could convince bankers of the Sixth District to stop reelecting J.A. McCrary.