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December 4, 1950 D ear Tom : I a m e n clo sin g you the a r t ic le to w h ich I r e f e r r e d in m y telephon e co n v e r sa tio n with you F r id a y n igh t. It s e e m s to m e that th is situ atio n is a v e r y dan gerou s one and that the F e d e r a l R e s e r v e B o a rd should m ak e it p e r f e c tly p lain to the open m a r k e t c o m m itte e and to the N ew Y o rk B a n k e r s that the peg is s ta b iliz e d . I h ave s u c c e e d e d in gettin g the T r e a s u r y tG a p p r e c ia te the fa c t that we sh ou ld h ave our o b lig atio n s fin an ced on lo n g e r te r m s than has been the c a s e g e n e r a lly but, if the F e d e r a l R e s e r v e B o a r d is going to pu ll the rug fro m under the T r e a s u r y on that, we c e r ta in ly a r e fa c e d w ith a m o st seriom s situ atio n , b e c a u s e we a r e going to h ave an im m e n se am ount of F e d e r a l fin an cin g in the n ext s ix m onth s. I hope the B o a r d w ill r e a liz e its r e s p o n s ib ilitie s and not a llo w the b ottom to drop fro m under our s e c u r i t ie s . If that happens that is e x a c tly what M r . S talin w an ts. S in c e r e ly y o u r s, H on orable T h o m a s B . M c C a b e C h a ir m a n B o a r d of G o v e r n o r s of the F e d e r a l R e s e r v e S y s te m vVashington, D . C . * . k* ««* r a,i E N C L . A r t i c l e f r o m N E W Y O R K H E R A L D T R I B U N E , F r i d a y , D e c e m b e r 1, 1951 “ F lexible P e g s ” This article is protected by copyright and has been removed. The citation for the original is: “Flexible Pegs.” New York Herald Tribune, December 1, 1950.
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