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May 17,

Mr, ueorge L. Harrison, Governor,
Feaerai iieservfc Bank of New York,
How York, New York.
Dear Governor Harrisons
As you correctly surais
ss reports ;(f i$" testimony
before the Senate Banki% ^nu Curre
th incomplete and incorrect. I was unexpectedly .
nation
with reft.
Uie effect of putting out "the Patraau roney*.
My reply haa to be extemporaneous. Had I been ore pared for the
question no aoubt I could have I
.
jwever,
I did not cover the subject as badly as prag
rts would indicate, ana I aid unaertake t- bring out the very important point
which you mentioned in your letter, tliat the Patman hill would
add roughly an equivalent amount to excess reserves•
For your inf ^rmatioii, I enclose a copy .
hie
transcript of th&t part of 'y testimony in this conriL^ct
which you will see that I undertook i.
to contsast the different effects from the issue of currency as provided in the
Patman bill ana the raising of funds through Go*
d»$
emphasizing th&t in the f j i : r case there w >uld be a direct t
rr©
dition to excess x*eaerves, while in the latter case there
be a reduction.
I do not ne
, tell you that I agree entirely with y.
about those provision* in the Patman bill relating to restrict.
)n the volume of currency, including Federal Reserve notes, in
case the price level should exceed the 1921-1929 average. They
are, aa you emphasise, another vital reason for opposing this
Lsure.

Sincerely your»,

H. S. Kccles,
Governor,

Enclosure.