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January 20,

Honorable Harold D. Smith,
Director of the Budget,
Washington 25, D. C.
Dear Harold:
this is to acknowledge your letter of January 17 in regard
to the studies which you are making of the structure and operations
of the Federal Government, including certain administrative aspects
of the operations of the several agencies concerned withttonegr,banking and credit* As you know, Z have long been greatly concerned, as
are other members of the Board, about the wholly unsatisfactory setup of these Federal banking and credit agencies* the need for reorganisation is mere acute today than ever in view of the problems
that will confront the country after the war.
The Wagner questionnaire to which you refer was prepared,
1 understand, at Senator VfcgperU request by seme staff mem, in*
eluding some from the Brooking* Institution, m i l e the questions are
comprehensive and searching, and also voluminous, thty were not drawn,
in our opinion, in a manner best to elicit or to present understandably
the most pressing problems and possible solutions. At all events, the
Senate Corns!ttee never pursued the project, because of the war and the
Board did not submit replies to the questionnaire.
the replies, such as were tentatively prepared fey cur staff,
would not in ay judgment be helpful to you in your studies, but I have
assembled on ay own initiative in recent years a great deal of material
that I consider far mare germane and useful for any study looking to
improvement of the structure and operations of these hanking agencies•
At the earliest possible moment I shall review this material and a end
It to you, confidentially, because seme of it represents extremely
confidential conversations with the President. Z have net the slightest
objection, of course, to furnishing also such answers as the staff prepared several years ago in connection with the Wagner questionnaire,
but as Z say, Z not only think they would be far lees helpful but they
are outdated and very possibly inappropriate to current and prospective
economic conditions and needs.
Heedless to add, 1 am most gratified and encouraged to know
that you are making these studies, and I am eager to furnish you all
the help at ny ooomand as promptly as possible*

Sincerely yours.

£• Socles,