predominately john d. rockefeller and standard oil. reportedly appalled by the volatility of crude oil prices that stunted the growth of oil markets in the early years of the petroleum industry, rockefeller had endeavored with some success to stabilize those prices by gaining control by the turn of the century of nine - tenths of u. s. refining capacity. but even after the breakup of the standard oil monopoly in 1911, pricing power remained with the united states - - first with the u. s. oil companies and later with the texas railroad commission, which raised limits on output to suppress price spikes and cut output to prevent sharp price declines. indeed, as late as 1952, crude oil production in the united states ( 44 percent of which was in texas ) still accounted for more than half of the world total. excess texas crude oil capacity was notably brought to bear to contain the impact on oil prices of the nationalization of iranian oil a half - century ago. again, excess american oil was released to the market to counter the price pressures induced by the suez crisis of 1956 and the arab - israeli war of 1967. of course, concentrated control in the hands of a few producers over any resource can pose potential problems. in the event, that historical role ended in 1971, when excess crude oil capacity in the united states was finally absorbed by rising world demand. at that point, the marginal pricing of oil, which for so long had been under the control of international oil companies, predominantly american, abruptly shifted to a few large middle east producers and to greater market forces than those that they and the other members of the organization of petroleum exporting countries ( opec ) could contain. to capitalize on their newly acquired pricing power, many producing nations, especially in the middle east, nationalized their oil companies. but the full magnitude of the pricing power of the nationalized oil companies became evident only in the aftermath of the oil embargo of 1973. during that period, posted crude oil prices at ras tanura, saudi arabia, rose to more than $ 11 per barrel, a 1 / 4 level significantly above the $ 1. 80 per barrel that had been unchanged from 1961 to 1970. the further surge in oil prices that accompanied the iranian revolution in 1979 eventually drove up prices to $ 39 per barrel by february 1981 ( $ 75 per barrel in today's prices ). the higher prices of the 1970s abruptly ended the extraordinary growth of u. s. and world consumption of oil and the

holders at the federal reserve bank of new york ( which include central banks and other monetary authorities ) can enter into overnight repos ( repurchase agreements ) with the federal reserve, temporarily exchanging u. s. treasury securities in their accounts for u. s. dollars, which can then be provided to institutions in their respective jurisdictions. all of these facilities have had a very constructive effect in calming down dollar funding markets and supporting a return to more normal conditions in global financial markets more generally. of course, as members of the fpa, you are well aware that developments in the u. s. economy do not happen in isolation from the rest of the world. we live in a globally integrated economy. with covid - 19, all countries have been hit by a global common shock, not only directly by the virus and the measures necessary to combat it, but also by the economic spillovers from those actions around the world. as in the united states, many foreign authorities have taken swift and forceful actions in response. my colleagues and i have worked closely with others — bilaterally and in international forums like the group of seven, group of twenty, bank for international settlements, and organisation for economic co - operation and development — to monitor and address the effects of the pandemic. the forcefulness and synchronized timing of actions by fiscal authorities, central banks, and regulators have helped support the incomes of households and firms and reduce market stresses that could have amplified the shock. not only is the federal reserve using its full range of tools to support the economy through this challenging time, but our policies will also help ensure that the rebound in activity when it commences will be as robust as possible. that said, it is important to note that the fed ’ s statutory authority grants us lending powers, not spending powers. the fed is not authorized to grant money to particular beneficiaries, to meet the payroll expenses of small businesses, or to underwrite the unemployment benefits of displaced workers. programs to support such worthy goals reside squarely in the domain of fiscal policy. the fed can only make loans to solvent entities with the expectation the loans will be paid back. direct fiscal support for the economy is thus also essential to sustain economic activity and complement what monetary policy cannot accomplish on its own. direct fiscal support can make a critical difference, not just in helping families and businesses stay afloat in a time of need, but also in sustaining the productive capacity of the economy after we emerge from this downturn. fortunately