At their confirmation hearings yesterday, two men nominated for the Federal Reserve Board by President Reagan strongly endorsed continued independence for the central bank and indicated they have few quarrels with current monetary policy.
None of the members of the Senate Banking Committee said they would oppose either nomination. Chairman Jake Garn (R-Utah) said he expects the committee to vote on the nominations in "a couple of weeks."
One of the nominees, Wayne Angell, a Kansas banker, farmer and economics professor, labeled as "preposterous" reports in some publications that the new nominees and two other Reagan appointees on the board would form a "gang of four" to oppose Fed Chairman Paul A. Volcker.
At a separate hearing on his nomination, Manuel Johnson, assistant Treasury secretary for economic policy, told the Senate Banking Committee that many other countries with central banks subordinate to politicians have highly unstable economies and often suffer from high inflation.
Johnson, a former economics professor at George Mason University, said the Fed was correct last year to allow the money supply to grow faster than it had planned because there was an unusual decline in the velocity of money.
Velocity -- the ratio of money to the gross national product -- is a measure of how fast dollars turn over in the economy. Normally, velocity rises, and when it falls, as it did in 1985, more money must be made available to achieve a given increase in economic activity.
Angell was even more specific in his support of Fed policy, although, like a number of current members of the board, he also expressed continuing concern about rapid growth in the money supply.
Most of all, Angell stressed his commitment to following an anti-inflationary policy course. "There is no way I will ever advocate any policy that would return this nation to inflation," he told the committee. The country suffered "too much pain to go through it again."
Some Fed watchers had said they believed Johnson and Angell would join with Fed Vice Chairman Preston Martin and Governor Martha Seger, the current Reagan appointees, to form a majority on the seven-member board and push for an easier monetary policy.
There also had been suggestions that the new members would shift the board's views toward significantly less regulation in financial markets, but comments by the nominees gave no indication of that. Although both men said they favored as little government intervention in the private economy as possible, neither took issue with recent Fed actions in this area.
Angell said he would have voted with the 3-to-2 Volcker-led majority that made the issuance of so-called junk bonds through shell corporations in certain corporate takeover attempts subject to the same 50 percent margin requirement as loans used to buy stock.
Johnson told the committee he agreed with the recent proposal to establish different capital requirements for banks based on the relative degree of risk in their investments.
Angell, a member of the board of directors of the Kansas City Federal Reserve Bank since 1979, spoke fervently about his concerns for American farmers.
Angell said he would regard himself as the financially troubled agricultural sector's representative on the Fed board. But he also declared, "I want to make it clear that I do not believe that the answer to the farm problem is reinflating."
Angell pledged to the committee that he would be "ever watchful for any reemergence of inflation." Controlling inflation -- with commodity price inflation, on average, held to zero -- is the Fed's prime responsibility, he said.
Even with his general support of current Fed policy, Johnson made it clear that he still has substantial differences in points of view with most other Fed policy makers. For instance, Johnson softened only slightly earlier assertions that large federal budget deficits have only a "negligible" effect on interest rates.