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Excerpts from D i a r y (Lawrence Clayton) 1/5/38 Conference: 1/6/58 Eccles lunched a t Treasury. l/ll/38 I lunched w i t h Eccles a t s m a l l t a b l e and discussed h o l d i n g company l e g i s l a t i o n . 1/15/38 Conference w i t h Eccles r e h o l d i n g company l e g i s l a t i o n - 4:30 t o 8:50 p.m. 1/14/38 Press c a r r i e s s t o r y o f J . F . T . O'Connor's expected r e s i g n a t i o n t o r u n f o r governor o f C a l i f o r n i a . A l s o P r e s i d e n t b l a s t e d a g a i n s t h o l d i n g company a t press conference. 1/17/38 Conference (5:00 t o 9:00 p.m.) w i t h Eccles on h o l d i n g company l e g i s l a t i o n . W i n g f i e l d , Cagle and B l a t t n e r i n . Eccles opposed s t a f f men's proposal t o cover secondary h o l d i n g companies. But he f i n a l l y agreed t o c a t c h any a f f i l i a t e which was borrowing from a s u b s i d i a r y bank - otherwise t o r e g u l a t e p r i m a r y h o l d i n g company and i t s banks o n l y . 1/19/38 Worked l a t e a t my desk r e d r a f t i n g a memorandum on the h o l d i n g company m a t t e r . 1/21/38 Cy Upham i n t o see Eccles r e h o l d i n g company m a t t e r . Secretary had asked him f o r h i s o p i n i o n . He t o l d Eccles t h i n g s t h a t i n d i c a t e d Crowley was behind t h e movement t o crack down. 1/22/38 Conference w i t h Cagle r e Eccles 1 ideas on the h o l d i n g company memorandum • 1/25/38 Eccles lunches w i t h P r e s i d e n t . On r e t u r n he c a l l s f o r Cagle who saw me a f t e r w a r d and s a i d Eccles wants t h r e e page d i g e s t o f t f C f s case?* (Query: Did t h i s mean C o m p t r o l l e r ' s case or Cagle f s case?) L a t e r i n t h e day Eccles t o l d Thurston and me t h a t he f e l t discouraged a t P r e s i d e n t ' s l a c k o f understanding o f t h e banking and monetary problem and he i s so hard t o s t e e r * When Eccles t o l d him how Congress had considered bank h o l d i n g companies and had decided a g a i n s t d i s s o l v i n g them and had given r e g u l a t i o n o f them t o t h e Board and t h a t we had more i n f o r m a t i o n about them than a l l t h e other government agencies p u t t o g e t h e r , t h e P r e s i d e n t s a i d , " I d i d n ' t know t h a t and I ' m sure the Secretary d i d n ' t know i t . M The P r e s i d e n t t o l d him t o see t h e Secretary about these m a t t e r s . 1/26/38 Patman sends back the h o l d i n g company i n f o r m a t i o n we gave him and wants a more comprehensive r e p o r t . Eccles w i t h t h e Secret a r y f o r two h o u r s . Gave him h i s views on ( l ) h o l d i n g companies, (2) c o n s o l i d a t i o n , and (3) c a p i t a l f o r s m a l l i n d u s t r y . Eccles s a i d l a t e r the Secretary was n o t so p o s i t i v e as before r e h o l d i n g E c c l e s , B l a t t n e r , T f t n g f i e l d and Cagle. - 2 - companies and was v e r y s t r o n g f o r c a p i t a l f l o w t o s m a l l business but n o t i n favor o f c o n s o l i d a t i o n as he h a d n ! t thought enough about i t . 1/27/38 I n connection w i t h suggestions made by bankers t h a t the best s t r a t e g y i s f o r Eccles n o t to propose any h o l d i n g company l e g i s l a t i o n , Eccles s a i d t h i s was a p l a y . He t h i n k s Crowley i s scared a t the way t h e h o l d i n g company b i l l has blown up i n h i s face and now would l i k e t o stop i t e n t i r e l y . Crowley t o l d Eccles t h a t he was working on Glass t o s t o p i t , t e l l i n g him t h a t i f t h e h o l d i n g company b i l l i s considered i t w i l l open the door t o a l l kinds o f l e g i s l a t i o n . 1/28/28 Upham c a l l s me r e a memorandum I am working on r e s p e c t i n g t r e a t ment o f bond d e p r e c i a t i o n . (This shows t h a t the Treasury i s i n t e r e s t e d i n bank examination i n a d d i t i o n t o t h e h o l d i n g company problem.) Eccles lunched w i t h Senator Barkley who stayed u n t i l 3 : 1 5 . (Query: Was t h i s r e h o l d i n g company l e g i s l a t i o n or general recovery program which was being worked up by Eccles a t t h i s time?) 1/31/38 I c a l l e d Upham r e the memorandum I gave him l a s t F r i d a y ( l / 2 8 ) r e bond a p p r e c i a t i o n and d e p r e c i a t i o n . He i n d i c a t e d h i s i n f o r m a t i o n from t h e three agencies was i n d i f f e r e n t nomenclature and he would l i k e t o discuss the matter f u r t h e r w i t h me sometime. (This i s given here t o show the course o f the agreement on exami n a t i o n procedure.) 3/2/38 Glass b i l l on h o l d i n g companies r e p o r t e d o u t . 3/3/38 Board meeting on h o l d i n g company and Patman b i l l s . Davis suggests t o Eccles t h a t he f i n d o u t from t h e White House where the Board stands i n view o f press statements t h a t Glass c l e a r e d h i s b i l l w i t h the Secretary and the White House. A l s o , where i s the agreement r e c l e a r i n g l e g i s l a t i o n through the I n t e r d e p a r t mental Committee when as i t appears from good evidence Crowley wrote the Glass b i l l a t t h e v e r y time t h e Committee was supposed t o be working on a b i l l , or a t l e a s t a r e p o r t . Eccles t o see Wayne Taylor tomorrow as f i r s t s t e p . I f no progress, t h e n the White House. 3/4/38 Eccles saw Wayne Taylor f o r t h r e e hours. 3/5/38 I c a l l e d J . F . T . O f Connor r e h i s phone c a l l t o Eccles r e s p e c t i n g Crowley's request f o r a confab on P a c i f i c coast branch banking picture. ( I n s e r t e d t o show Crowley's a t t i t u d e toward Bank o f America and i t s l i k e l y connection w i t h the h o l d i n g company program.) 3/7/38 Fred C a r r o l l i n town r e h o l d i n g company b i l l . ( A s I r e c a l l , t h i s c o i n c i d e d w i t h presence i n town o f Cameron Thompson, e t a l # ) - 3 - 3/8/38 Eccles t o t h e White House and lunched w i t h t h e P r e s i d e n t . 3/S/38 Eccles t o l d me t h a t d u r i n g h i s v i s i t w i t h the P r e s i d e n t y e s t e r day he reminded him o f the banking and economic program subm i t t e d l a s t October and t h a t he (Eccles) was p e s s i m i s t i c about automatic r e c o v e r y , t h a t i t was w i s h f u l t h i n k i n g t o expect business t o expand i n the c a p i t a l goods f i e l d u n t i l more p r o d u c t i o n o f consumers goods was r e q u i r e d by increased demand. This i n t u r n r e q u i r e s s t i m u l a t i o n by government i n t e r v e n t i o n . (This i n s e r t e d t o show t h a t the main purpose o f Eccles 1 v i s i t was n o t t h e h o l d i n g company or s t r i c t l y banking l e g i s l a t i o n but a recovery program.) 3/10/38 Eccles expected t o leave tomorrow f o r the west b u t d e f e r r e d u n t i l Saturday ( 3 / 1 2 ) . 3/11/38 Conference w i t h Ransom and s t a f f on h o l d i n g company r e p o r t , he t o a c t as a l t e r n a t e f o r Eccles on the I n t e r d e p a r t m e n t a l Committee. 3/14/38 Ransom t o the Treasury f o r Committee meeting on bank h o l d i n g company m a t t e r . Reports l a t e r t h a t Jesse Jones says he i s f o r g i v i n g the FDIC s u p e r v i s i o n over h o l d i n g company groups. 3/16/38 Conference i n Ransom1s o f f i c e r e suggestion f o r the P r e s i d e n t s message on bank h o l d i n g companies. Ransom then l e f t t o go t o Jesse Jones 1 o f f i c e , thence t o the Treasury w i t h Davis. 4/12/38 Eccles and Ransom t o t h e Treasury. Important meeting w i t h Jiramie R o o s e v e l t , Morgenthau, O l i p h a n t , Gaston, T a y l o r , Wallace, Appleby, Jones and Hopkins. Discussion o f the P r e s i d e n t s spending program and t o l d Eccles and Ransom t h a t White House wanted t h e Board t o consider r e v e r s i n g t h e l a s t t w e n t y - f i v e per cent o f the increase i n r e s e r v e requirements. Board meeting a t 4:00 t o consider t h i s matter. (This i n s e r t e d t o show t h a t bank h o l d i n g company problem had meanwhile been crowded o u t o f the p i c t u r e by the development o f the recovery program. )
@FedFRASER