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February 19, 1946. Honorable Fred M, Vinson, Secretary of the Treasury, Washington 2$, I). C. Dear Fred: I M enclosing a copy of a letter uhich I wrote to the Reserve Bans Presidents at the end of last month on the subject of the British I O S B and copies of the responses which I hsve received frosi a number of the Presidents. I do not expect that you will have tine to read through this correspondence, but you Eight pas© it on to some of the people in your Department ^ho -will be interested. The replies from the Presidents indicate that the directors and officers in all of the Bank® tow taking i keen interest in this matter and &re doinr their part, in stimulating public discussion of the issue. previously &ent the Presidents • considerable iNNftt °^ material relating to the British negotiations, including the orlgin&l agreement a, memoranda analysing their contents9 copies of Lord Keynes1 speech, etc* I had a]so arranged for &•§• Acheaon to apeak on the British loan st a luncheon meeting here fti the Board which was attended by representatives fros: the research divisions in the various Federal Reserve Banks. Ilth this background and i?ith the further coverage of this subject which has been given in the Federal Reserve Bulletin» I believe that the Federal Reserve Banks will be able to make a large contribution to public understanding of the British problem. Sincerely yours, (Signed) M. S. Eccles M. 8. Eccles, Chairman. Enclosures JBK:mla February 19, 1946* Honorable Mlliaia L. Clayton, Assistant Secretary of State, Washington 2$f D. C. Dear U l l I as enclosing a eopy of a lettwr i*hich I wrote to the Reserve Bank Presidents at the end of last isonth on the subject of the British loan and copies of the responses #iich I have received from & number of the Presidents. I do not expect that you will have ti»e to read through this correspondence, but you Eight pass it on to some of the people in your Department isho idli be interested. The replies from the Presidents indicate that the director® and officers in all of the laatet are taking a keen interest in this satter and are doing their part in stimulating public discussion of the issue. I had previously sent the Presidents a considerable amount of material relating to the British negotiations, including the original agreements* memoranda, analysing their contents, copies of Lord Keynes1 speech, etc* I had also arranged for Dean Acheson to gpeak on the British lo&n at a luncheon meeting here at the Board which was attended by representatives from the research divisions in the various Federal Reserve Banks. With this background and filth the further coverage of this ««b~ ject «hlc.h ha© been given in the Feder&l Regerve Bulletin* I believe that the Federal Reserve Banks will be able to B r a a large contribution to public understanding of the British problem. Plncerely yours, (Signed) M. S. Eccles f Coalman. Enclosures JBKrirla C 0 P__Y BOARD OF QOVERHOBS OF THF P B M M L RESERVE Jasmary 28, 1946. Dear Mr. I took the opportunity of th© recant meeting In "Washington of the 8yBt*M Research Advisory Cox&roittee to have Mr. Dean Acheson, Under Secretary of State, address the group on th* subject of the proposed British loan. I sir:, hopeful that this reeting, together with the dociiMBta and n-ercor&nda ifoieh I have sent to you In recent weeks, and the additional material published in this month's Federal Reserve Bulletin, will have awakened your interest in the •ubjeet and v i U have impressed upon yon the great importance which i s attached to the r a t t e r by our Govern&ent* The President will shortly tttltttt to Congress a b i l l iirploaenting the agreet&ents reached during the recent inter-goverrunental negotiations in Washington and i t i s hoped that this action will be followed by full and free discussion of the issue on a nationwide basis. As one of the negotiators of the agreements on the American side, I 3hall advocate their acceptance, as opportunity offers, both before the Congress and before the country at large. I know from lntlftate experience how difficult It was to reconcile Aaeriean and. British viewpoints in this matter, but I Mi convinced that the result-—which inevitably represents some compromise between the extremes—deserves the ^tolehearted support of both countries. Ion will be aware from my recent public statements that I am not one to enter lighth^artadly upon ne?? coned tnents to foreign countries which would have the effect of Increasing our national debt m& creating" further purchasing power to press upon our already strained domestic economy. However, we mist weigh against these considerations the impelling necessity to assist our recent Ally to recover from the ravages of war and i t s place in the world c I reoopdse the necessity not because I believe we ow« the British some further assistance as a result of their disproportionate sacrifices during the war, but rather because we need their cooperation in construct!rif the psace, Iht British ^kpire, ;ur\d the other countri«9» linked to i t in the sterling area, ooaprise a vary inportant segment of the iiorld trading coisr.Tinity. With & loan exifflei«lt to tide th«l over the difficult poatw&r transition years, the British will be able—&nd have coardtted themselves—to join prith us in developing & free and "workable world economy, iithout such a loan, forced to fall b. ck upon their owi depleted resources, the British could only maintain themselves by resorting to virtual economic warfare -2- in -world markets. ?'e would enter a new era of rival economic blocs, strangling restrictions on world trade, md increasing international friction. There would be no opportunity to lay the economic foundations for 1 durable peace• I would ref«r again to my public itltfMnt issued at the conelusion of the racent negotiations: "It i s not A question of irtiether we can afford to provide the help, bat 'whether In our o«n long-mn interest we can afford not to provide i t . " I earnestly hop® that the directors and officers of your Bank will irtv© full consideration to the merits of this case. This i s an issue upon which you could a l l give rail enlightenment tod leadership to your ccMBsunity* In any case, I trust that daring the coming weeks, «h«n thil •atter is before the country, you will find opportunities to assist public discussion by disseminating the relevant factual infonr.ati.on which i s in your hands. Very truly yours, (Signed) M« S« Eccles IU S« Ecclos, Chainun. TO THV PRKCIDflKTf OF ALL FEDERAL RRSFRVF BARKS.
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