Treasury Fed Accord



Winfield Riefler (1897-1974)

Assistant Chairman to the Board (1948-1959)

Winfield Riefler was a native of Buffalo, New York. Born on February 3, 1897, he served in World War I and earned the Croix de Guerre for his actions in France. Riefler graduated from Amherst College in 1921. His government career began right after college with a job as a Department of Commerce representative in Buenos Aires, and he joined the Federal Reserve staff in 1923. While there, he developed a table in the Federal Reserve Bulletin currently known as "Reserves of Depository Institutions and Reserve Bank Credit."

Today, this table provides a consolidated Treasury-Fed account of the factors that supply and absorb bank reserves and currency.1 While at the Fed, he earned a Ph.D. in Economics from the Brookings Institution. His thesis was later published as a book entitled "Money Rates and Money Markets in the United States."2 The book shows how the actions of the Fed that affected bank reserves also influenced short-term interest rates.

Riefler left the Fed in 1934 to take a full-time position at the Institute for Advanced Studies at Princeton University as the head of the Economics Department. With the support of the Institute, Riefler contributed to a variety of government functions. He served with the Roosevelt Administration as central coordinating statistician in 1934. There he made a substantial contribution to the real estate market with his concept of the self-amortizing home mortgage. Prior to the development of this concept, home mortgages were given only five years to mature followed by a payment of the principal. In conjunction with that contribution, Riefler helped to write the Federal Housing Act, which allocated funds to communities in need of redevelopment.

In 1937, still with the Institute, he was appointed to be a substitute member of the permanent finance committee of the League of Nations. During World War II, he was instrumental in bringing several League organizations to the United States.3 In 1942, he directed operations in London for the Board of Economic Warfare, which was responsible for assessing the economic strength of the Axis Powers as well as determining effective policy measures that inhibited the production capacity of the enemy.

With the war's end, Winfield Riefler returned home to rejoin the Federal Reserve as a consultant with the Philadelphia Board of Directors. It was there that he made an impression on Thomas B. McCabe, who had served on the Philadelphia board since 1937. When McCabe was appointed Chairman of the Board of Governors, he made it a requirement of his acceptance that Riefler join him as his personal advisor. It was an opportunity for Riefler, who wanted to reestablish the Fed's independence, which had been virtually lost soon after the Fed was restructured in 1935. He believed that the Fed should always aim its efforts towards economic stabilization and that its current activities in the government bond market were impeding its progress toward that objective.4 In 1948, Riefler resigned his position with the Institute of Advanced Studies. He joined McCabe in Washington and was instrumental in negotiating the final settlement of the Accord with future Fed legend William McChesney Martin, Jr. 5 When Martin left the Treasury and came over to the Fed, Riefler served as his personal adviser, too. Riefler retired in 1959, having seen his convictions regarding Fed independence put into practice. He died on April 8, 1974.


*The content of this biography received important contributions through conversation with Donald Riefler, the son of Winfield Riefler.
1Robert L. Hetzel and Ralph F. Leach, "The Treasury-Fed Accord: A New Narrative Account," Federal Reserve Bank of Richmond Economic Quarterly 87 (Winter 2001): 35, footnote 5.
2Obituary for Winfield Riefler, New York Times, 10 April 1977.
3Obituary for Winfield Riefler (1977).
4Hetzel and Leach (2001, 35, footnote 5).
5See Hetzel and Leach (2001, 33-55) for further details.

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