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F o r m N o . 131

Office Correspondence
To

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Date_ ferch 14, 1955
Subject:_Zosi*t'ion "to b e "taken in re appoint-

Governor Eccles

From^

FEDERAL RESERVE

_

ment of committee to study banking and
monetary system.

After your testimony this morning, Mr. Morrill, Dr. Currie, and
I were discussing the prospect that Congressman Hollister of Ohio would
urge the postponement of action on Title II of the Banking Bill and the
appointment of a congressional committee or commission of so-called experts to study the banking and monetary system and then make recommendations for legislation. I expressed the view, as did Mr. Morrill, that
the enactment of Title II and the appointment of a committee or commission,
such as that referred to, would not represent conflicting or irreconcilable
courses of action*
In other words, it would seem quite appropriate to take the
position that nothing proposed in Title II is so abstruse or unfamiliar
as to require, on the part of the House and Senate committees, any more
information than can easily be made available to them at the present
time. On the other hand, if there are additional matters in regard to the
banking and monetary system—such, for example, as the 100^ reserve plan—
that members of the House Committee might desire to have inquired into by
a subcommittee of their own members or by a commission of experts, there
is no reason why you should not only have no opposition to such an inquiry,
but rather every desire to cooperate in producing ; whatever information
it may be within the power of the Federal Reserve ^oard to supply•
This would seem to me to be a veiy logical and proper position
for you to take.
At the same time, I think it would be desirable to strike out
hard at this point against agitation for delay, where this agitation is
inspired, not by a desire to explore this or that idea or theory or
experience, b^f simply to frustrate the passage of Title II by this session
of Congress and to have it detached from Title I and Title III of the
bill.
In this connection, it would be advisable to point out that the
tactics of delay have been injected into every constructive proposal that
has been made for the improvement of the banking system since the election
of Woodrow Wilson as president in 1912. The newspapers of 1913 and the
books written by such original oarticipants in the Federal reserve legislation as Senator Glass and H. Parker Willis, show the extent of the obstructive tactics resorted to by such organizations as the American Bankers
Association, the Chamber of Commerce of the United States, the National
Citizens1 League, etc., and also by the metropolitan press.




Precisely the same tactics were resorted to again in 1931
and in 1932 to defeat the Glass Bill that eventually became the Banking Act of 1933. In this case the demand for delay, study, and
division of the bill into a number of separate measures was repeatedly
urged by the organized opposition to the bill. In this case also the
opposition came from precisely the same groups and the same newspapers
that had taken precisely the same position in 1913.
I should prefer that you do not use in the House hearings any
of the material that I have assembled on this matter of delay. The
reason for this is that the material will carry much greater force with
the Senate committee, in view of the fact that you will be able to quote
directly from Senator Glass on the one hand and from his critics on the
other*
In answering Congressman Hollister, however, I do think it important to emphasize the point that you mentioned several times in your
private conversation^ namely, that such organizations as the American
Bankers Association and the Chamber of Commerce have continuous organizations engaged in the study of banking and economic problems, and that they
should after all these years of study and experience be able to take an
affirmative or negative position on a specific piece of legislation without
setting up new committees and proceeding as if the subject of legislation
had never been heard of before. You will also perhaps make a hit by reminding the House committee of the fact that the House and the Senate have
also had banking and currency committees for a great many years, and that
these committees are certainly capable of grasping the essence of Title II
of the Banking Bill.