ONE OF OUR MOST SUCCESSFUL GRADS

William J. McDonough, CHS ‘52, president of the Federal Reserve Bank of New York and the second most important person in the Federal Reserve System, after the chairman,  Retired in July 2003.

His announcement caught many people within the financial industry by surprise. 

The president of the New York Fed plays the central operational role for the Federal Reserve System because the New York bank is responsible for the open-market trading operations that carry out the monetary policy decisions reached in Washington.

Mr. McDonough, 69, has been president of the New York Fed since mid-1993 and has had one of the longest tenures of any president at that bank.

A courteous and even courtly banker, Mr. McDonough played a critical role in keeping the financial system afloat after the Sept. 11 attacks devastated much of the Wall Street financial center.

But he may be remembered even more for his controversial role in averting the collapse in 1998 of Long-Term Capital Management, the huge hedge fund that ran up billions of dollars in debt it could not repay.

Afraid that a collapse of Long-Term Capital might lead to a broader financial panic, Mr. McDonough corralled many of the company’s biggest creditors most of them major banks and investment banks  and persuaded them to rescue the fund by injecting $4 billion in fresh money.

Many critics complained that the New York Fed’s intervention had set an unwelcome precedent that would encourage other troubled institutions to look for official help in the future. But supporters said Mr. McDonough had helped avoid what could have been a serious setback to the financial system, and they noted that he had done it without using any public money.

"There are already people who look kindly and those who look less than kindly on that," said Alan S. Blinder, a former Fed governor who is now a professor of economics at Princeton. "My feeling now is more or less what it was then, that he took the lesser of two risks."

Mr. McDonough has been an important ally of Alan Greenspan, the Fed chairman, and Mr. Greenspan has relied on him heavily. Under Mr. Greenspan, Mr. McDonough has been the Fed’s chief negotiator in international talks in Basel, Switzerland, on how to modernize the way banks manage and account for their risks.

"I will greatly miss Bill McDonough’s counsel and advice," Mr. Greenspan said in a written statement today. "After a decade of exemplary service to the Federal Reserve System, his retirement will leave a pronounced void."

The New York Fed is unique among the 12 district banks that make up the Federal Reserve System. Because it is situated in the nation’s financial center, the president of the New York Fed is a permanent member and vice chairman of the Federal Open Market Committee, which makes decisions about interest rates.

Beyond conducting open-market operations that carry out monetary policy, the New York Fed also conducts large amounts of foreign exchange dealings and manages much of the Treasury’s debt.

For years, the New York Fed was considered the true center of power for the entire system. That importance waned after the arrival of Paul A. Volcker, a powerful Fed chairman who took office in the 1979, and even more after the arrival of Mr. Greenspan in 1987.

But the New York Fed’s importance remains enormous. It helps massage relations with the financial community, providing reassurance and guidance in times of crisis and serving as a channel of communication from financial markets to policy makers in Washington.

"It’s the second most important job in the system," said Allan H. Meltzer, a professor of economics at Carnegie Mellon University and the author of a new history of the Federal Reserve, referring to the presidency of the New York Fed. "He is the head of the bank that does all the open-market operations, that does the foreign exchange dealings and that does a lot of the management of Treasury debt operations. It is an administrative role very different from that of the other district banks."

Mr. McDonough’s successor will be recommended by the board members of the New York Fed, who represent a cross section of people from banking and business as well as public institutions.

Peter G. Peterson, an investment banker who is chairman of the bank’s board, said today that he would organize a search committee. The New York Fed’s board will then make its own recommendation for its top choice for a new president and submit it to the Federal Reserve’s board of governors in Washington.

We have no information at all  on Bill.  Perhaps one of his friends can find him for us and send an address, phone and E-mail address.   With his approval, of course!

Dear Class of ‘60,

Just over a month ago now, we were able to have a meeting in Chicago  with our classmate Fr. Tony Wach, SJ,  who had flown in from Uganda  just a few days prior.  We received a first hand report about progress  in Gulu after we celebrated Mass together and caught up on news about  each other.  We prayed for the departed in our class during Mass (the  list grows longer) and, equally painful, for our classmates’ departed  spouses.  Tom Hamilton was able to make the gathering.  It’s been over  6 months now since his wife has passed and his life is very  different.  We talked about how this is not how you would plan your  retirement if you had an option.  We enjoyed his tales of how his  children have compensated by taking on the task of "mothering" him.   But discussions such as this, made us all realize how time is  passing.  Our 50th reunion is only 2 years away.  The group at  Maggiano’s in Chicago seemed equally divided between a Chicago meeting  like we had for our 40th, a "resort" type venue somewhere special to travel to (e.g. a cruise - Alaska anyone?), or a meeting in Prairie like we had for our 45th.  We need a class survey to see what people think.

Tony’s report was definitive: Ocer Campion Jesuit College (OCJC) will open for classes with the school year 2009 - no matter what the conditions on the ground.  The focus of Fr. Tony, the Jesuit superior  for the region, is primarily on recruitment of faculty.  A particular  need is for the headmaster position.  Our classmate, Dave Strzok’s  brother, Fr. Jim Strzok, SJ, is the Jesuit "on the ground" in Gulu and  in charge of construction. 100 acres just outside Gulu has been  donated by a local family because they feel that education is their  critical need now.  The area has been fenced in and trees are being  planted and the well has been bored and farming to support the future "village" that will be necessary for this coed boarding school to be  self sufficient, housing both the faculty and students, has been  started. They will need to provide their own electricity, water and  food.  The pole tent to house the equipment and building supplies (we  saw pictures of the people quarrying stones and making bricks by hand)  has finally made it through troubled neighboring Kenya.  Classes will  start even if it’s in this pole tent.

The discussion afterward was lively.  John Letherman, who is in commercial development in Elkhart, Indiana, pointed out that the  "vision" is great but the planning specifics and presentation of them  are a little sketchy.  Wally Bergstrom, retired from the paper  business, who traveled down from the Milwaukee area with his wife Marshelle, agreed.  Both John and Wally felt that many in the Campion  Community were waiting to see more concrete plans and evidence of  progress before committing.  Tony pointed out that this was one of the  main purposes of his visit to the states and he will be meeting with  the Wis Prov Jesuits and the architects from Omaha over the coming two  months to firm up a staged plan of construction.  I was a little dense about the Ocer (pronounced "oh-shay") Acholi (dominant tribe in northen Uganda) name in the school title until Tom Dickerson pointed out the double meaning to me. The term means "He is Risen."  Of course this term represents the hope of the Resurrection  for the Acholi people after 20 years of brutal civil war, but it also  applies to us, Tom pointed out that this is our chance to "resurrect"  the legacy of Campion.  Tom received the prize (alas, a round of  applause and a pat on the back) for traveling the farthest by car to  make the meeting.  He drove from Ohio to Johns’s house in Elkhart and  they drove to Chicago together.  Tom also felt strongly that the most  critical feature of any fund raising drive was personal contact by  fellow classmates.  The Chicago stalwarts, Burke MacDonald and Jim  Popjoy, who, with their wives Mary and Ryoko have made every one of  these Chicago meetings, strongly seconded that concept.  We discussed  how to accomplish this without any firm conclusions.  But let us start  by sending out this call to network.

Dave Zamierowski

Starting in 1941, an increasing number of British airmen found themselves as the involuntary guests (POWs) of the Third Reich, and the Crown was casting about for ways and means to facilitate their escape.  Now, obviously, one of the most helpful aids to that end was a useful and accurate map, one showing not only where stuff was, but also showing the locations of ‘safe houses’, where a POW on the lam could go for food and shelter.

Paper maps had some real drawbacks:  they make a lot of noise when you open and fold them, they wear out rapidly and, if they get wet, they turn into mush.  Someone in MI5 (similar to the FBI in the USA ) got the idea of printing escape maps on silk.  It’s durable, can be scrunched-up into tiny wads, and unfolded as many times as needed, and makes no noise whatsoever.

At that time, there was only one manufacturer in Great Britain that had perfected the technology of printing on silk, and that was John Waddington Ltd.  When approached by the government, the firm was only too happy to do its bit for the war effort.  By pure coincidence, Waddington  was also the U.K. licensee for the popular American board game, Monopoly.

As it happened, ‘games and pastimes’ was a category of item qualified for insertion into ‘CARE packages’, dispatched by the International Red Cross, to prisoners of war.  Under the strictest of secrecy, in a securely guarded and inaccessible old workshop on the grounds of Waddington’s, a group of sworn-to-secrecy employees began mass-producing escape maps, keyed to each region of Germany or Italy where Allied POW camps were located.  (Red Cross packages were delivered to prisoners in accordance with that same regional system).  When processed, these maps could be folded into such tiny dots that they would actually fit inside a Monopoly playing piece.

While they were at it, the clever workmen at Waddington’s also managed to add:  A playing token, containing a small magnetic compass, and a two-part metal file that could easily be screwed together. Useful amounts of genuine high-denomination German, Italian, and French currency were hidden within the piles of Monopoly money!

British and American air-crews were advised, before taking off on their first mission, how to identify a ‘rigged’ Monopoly set  - by means of a tiny red dot, one cleverly rigged to look like an ordinary printing glitch, located in the corner of the Free Parking square!  Of the estimated 35,000 Allied POWs who successfully escaped, an estimated one-third were aided in their flight by these rigged Monopoly sets.   Everyone who did so was sworn to secrecy indefinitely, since the British Government might want to use this highly successful ruse in still another, future war.  The story wasn’t de-classified until 2007, when the surviving craftsmen from Waddington’s, as well as the firm itself, were finally honored in a public ceremony.

At any rate, it’s always good when you can play that ‘Get Out of Jail Free’ card.

Joe Riley ‘69 was kind enough to send us a passel of little CHS lapel pins.  While supplies last we will send you one for the unbelievable sum of $7.98.  That includes Shipping and handling.  Pls make check to Campion Forever.  These are very attractive - - - our famous prancing horse is featured on a red background set in gold.