George H. Clay was the first native of the greater Kansas City area to be named president of the Federal Reserve Bank of Kansas City, a role he held from January 1961 to February 1976.
Born in 1911, in Kansas City, Kansas, Clay attended Kansas City Junior College and Liberty’s William Jewell College before enrolling at the University of Missouri – Columbia, where he earned a law degree.
Clay practiced corporate law for a decade until 1944 when he joined another Kansas City-based institution: Trans World Airlines. He started at TWA as the assistant director of state affairs and rose to become TWA’s vice president of administrative services and a member of its Board of Directors. Among other things, he was heavily involved with developing New York City’s John F. Kennedy Airport and in consolidating TWA’s overhaul base from Delaware to Kansas City—a key component in the later expansion of what was then known as Mid-Continent International Airport into Kansas City International.
Clay left the airline in 1958, coming to the Kansas City Fed as vice president and general counsel. The move was influenced by his love of Kansas City and the recognition that remaining at TWA would eventually require a move to New York, but also a firm belief that “everyone should spend some time paying his rent for his place in the world.”
“I thought the Federal Reserve Bank was… an excellent place to find opportunities for both public service and challenge.”
During his fifteen years as the Bank’s president, Clay was known for his open-door philosophy, sense of humor, and leading the staff in singing holiday carols. He was also a staunch defender of the Federal Reserve’s decentralized regional structure.
“The (Federal Reserve) System’s foundation rests firmly in regional orientation which has served the nation well,” Clay said at the time of his retirement. “It’s a sound blending of public and private interests focused toward an efficient financial system and the overall health of the nation’s economy. Regionally, we have supervisory and operational responsibilities with the banks in our own area. We take regional views to national forums.” 1
“This arrangement permits the System to have a better chance to accomplish objectives through solid policies developed in a free and open manner. This is true for monetary policy, bank regulations, our own operations—every aspect of our activity. These Fed traditions are really closely related to traditions of liberty and freedom of choice we all prize so highly. The Fed is an institution that was well conceived and generally has been well administered. I hope its strengths can be preserved while it changes in response to the needs of the nation.” 2
When he retired in February 1976, Clay was the longest-tenured member of the Federal Reserve’s policy-setting Federal Open Market Committee.
“The creation of money and credit is a very complicated thing,” Clay said in a 1976 interview with the Kansas City Star. “It’s not a science with its rules carved in marble. It’s an art. Though it is pretty easy to take the first step in the creation of money and credit, what happens in six months as a result of that step is impossible to predict.”
In retirement, he remained involved in charitable efforts and the business community. He died at age eighty-four in 1995.
Todd, Tim. Confidence Restored: The History of the Tenth District's Federal Reserve Bank. 2008.
Written by the Federal Reserve Bank of Kansas City. See disclaimer.