The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Left with President 12/21/40 COMMITTEE TO THS PRi^IDhHT OK SCOSO^IC POLICY R ecoiamendati on !• Advisory Coimrdttee to the President on Economic Policy should be established to coordinate the policies of the various monetary and fiscal agencies of the GoverDiaent and to worfc; out plans for dealing with monetary, fiscal and price problems relating to the defense program and to the ultimate transition to a peace-time basis. This coaeaittee, under the chairmanship of the Yice President, sight be composed of the Secretary of the Treasury, the Federal Loan Administrator, the Chairman of the Board of Governors of th© Federal "Reserve System, and the member of the Defense Commission in charge of prices. One of the Administrative Assistants to the President could act as the cosimit tee's secretary. The Director of the Budget could, if it MHPt thought desirable, sit in as an observer. Reasons for Recommendation 1. The Broad Heed for a^Coismittee. ScWMl progress has been made in coordinating the physical side of the defense [MOgjiUi Bo progress, hovever, has been made in coordinating its financial counterpart. Consequently, there are now a amber of different department a and agencies all concerned with one or &ore aspects of what is in essence a single large problem. As th© defense program i^ains momentum there is increasing danger a&d likeliiiood of conflicting or duplicating policies being adopted. There are almost bound to arise individual disagreements as to rhether or to what extent recourse should be had to the use of monetary controls, fiscal controls, direct credit or rationing controls. Some differences, of courc-e, will always exist. Many others, however, could be resolved round a table. As a means of relieving pressure on the President and in the interests of developing consistent and comprehensive pro-.irsas, there is urgent need of ts administrative device to insure that conflicting" or duplicating policies be avoided, that the areas of controversy that rrast be settled by the President be reduced aad that alternative courses of actioa to be placed before the President be clearly and sharply defined, A frequent cause of disagree* seats on policy matters is traceable to differences in the factual and analytical studies on which policies are bii^ed. The M g g M t t i committee would facilitate an interchange of views and a narrowing of differences at the technical level. Finally, the suggested committee, under the chairmanship of the Vice President, would afford a means of coordinating policies of the Executive aad Legislative Branches of the Cknrermsent and of lessening misunderstanding between these branches. In so doin.;, it v?ould enhance the influence and usefulness of the office of Tice President. m 2» 9 m Terms of Reference and Nature of Problems, The terms of reference of the proposed eossrdttee may be indicated by- the nature of the problems that are ir^rdnent or prospective. These include questions of direct or indirect Methods of preventing price distortions; precautions HgnlMt possibilities of future credit inflation; budgetary requirements of defence and post-defense activities and their financing; related questions of interest rates and. the type and timing of taxation integrated witti the basic objective of sustained production and employment; ••tntrmntH of economic balance, particularly as it affects agriculture and consumers. These ana many other related matters require analysis and coordination through a representative corsmittee that can act in an advisory capacity under the President's direction. S« Compo-sitioa of Co-omittee. (a) The Vice President: Various adT&Atagei would flow from the destination of the Vice President as Chalraan of the Cosnlttee. It would provide the most satisfactory way of keeping him in touch with the policies of the Administration and the rttgf of considerations that entered into their making. Being comparatively free from administrative duties and having the interests that he has, It is to b© expected that he would t^ke an active part in the vesfc of the committee. (b) The Secretary of the Treasury: Because of his direct responsibilities in the field of taxation and Government financing and the Treasury*s monetary and banking powers. (c) The Federal Loan Administrator should probably be a member because of the magnitude of the domestic and foreign loans made by his agencies and the influence on interest rafeM bit can exert. (d) The Chairman of the Board of Governors: Because of the responsibilities of the Federal Reserve System in the aonet&ry and general credit field. (e) The Coaaissjloner on Prices of the Defense Commission: It is obviously desirable that a liaison be established between the Finance Committee ana the Defense Cowaission* The responsibilities of the Commissioner on Prices relate moat closely to the work of the proposed eossiittee and it so happens that he is also a member of the Priorities Board* As it appears to be established as a general principle that no member of the President's staff should serve on a policy-forming committee reporting to the President through someone else, the Director of the Budget is not suggested as a member. On matters pertaining to the budget, however, he could sit is as as observer, if it were thought desirable. It is MMt desirable that the committee have a secretary to keep records, prepare an agenda and reports, and insure that the technical studies required by the m i l I Him are forthcoming. The selection of a secretary from any one of the agencies represented raises obvious difficulties. It is recommended, therefore, that the Administrative Assistant to the President in the general field of fiscal and monetary matters be imde secretary.
@FedFRASER