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PAT HARRISON. MISS.* CHAIRMAN
WILLIAM H. KING, UTAH
ROBERT M. LA FOLLETTE, JR., W I S .
WALTER F. GEORGE, GA.
ARTHUR CAPPER, KANS.
DAVID I. WALSH, N A S S .
ARTHUR H. VANDENBERC, MICH.
A LB EN W . B A R K L l r , KY.
JOHN G. TOWNS END, JR., DEL*
TOM CONNALLY, TEX.
JAMES J. DAVIS, PA.
JOS I AH W . BAILEY, N. C.
BENNETT CHAMP CLARK, MO.
HARRY FLOOD BYRD, VA.
AUGUSTINE LONERGAN, CONN.
PETER G. GERRY, R. I.
JOSEPH F. GUFFEY, PA.
ROBERT J. BULKLEY, OHIO
PRENTISS M. BROWN, MICHi
CLYDE L . HERRING, IOWA
EDWIN C. JOHNSON, COLO.

^HCrttieb JS>ict{e& J&erxctie
COMMITTEE ON FINANCE

Washington, D. C#
June 14, 1940.

FELTON M . JOHNSTON, CLERK




Honorable Marriner Eccles,
chairman, Federal Reserve Board,
Washington, D. C.
My dear

Chairman:

There l a been some talk around
is
the Senate lately of a move on the part of the
Government and the Federal Reserve System of establishing a rigidly controlled market in Government bonds.
As a member of the Senate Committee on Banking and Currency, would you be willing
to permit me to have an opportunity of seeing any
memorandum which may be prepared by the Federal Reserve
Board, Federal Reserve Banks or by the Marketing Committee, so that this mattermay be cleared up?
My highest regards and best personal
wishes, I am

Very sincerely yours,
JGT/h.

PSRSOKflL AMD COIIFI DKMTI AL

June 17, 1940*

My dear Senator:
Your letter of June 14 apparently refers to some
speculation that X have seen mentioned in the newspapers,
but of which X have no personal knowledge. If there is any
move afoot to establish a controlled market in Government
bonds, I am not aware of it, even assuming such a thing could
or should be done.
Speaking for myself alone, X can see no necessity
for such a control, notwithstanding the requirements of any
prospective defense program. You are well aware of the
enormous surplus of banking reserves, the pressure of which
has continued to keep Government securities at high price
levels and relatively law yields, even in the face of the
successive shocks of the news from abroad ever since the invasion of the Low Countries.
I 6 i inclined to think that the talk you refer to
2
is newspaper sumising that is not based on any realistic or
practical knowledge of the market situation*
With kindest personal regards,

Sincerely yours,

H* S* Eccles,
Chairman•

Honorable J. G. Totmsend, Jr.,
United States Senate,
Washington, D. C.




PAT HARRISON, MISS., CHAIRMAN
W I L L I A M H. KINO, UTAH
ROBERT M. LA FOLLETTE, JR., W I S .
WALTER F. GEOR M , GA.
ARTHUR CAPPER, KANS.
DAVID I. W A L S H ,
KSS.
ARTHUR H. VANDENBERG, MICH.
ALB EN W . BARKLfcY, KY.
JOHN G. TOWNSEND, JR., DEL*
TOM CONNALLY, TEX.
JAMES J. DAVIS, FA.
JOSIAH W . BAILEY, N. C.
BENNETT CHAMP CLARK, MO.
HARRY FLOOD BYRD, VA.
AUGUSTINE LONERGAN, CONN.
PETER G* GERRY. R. I.
JOSEPH F. GUFFEY, PA.
ROBERT J. BULKLEY, OHIO
PRENTISS M. BROWN, MICH*
CLYDE L . HERRING, IOWA
EDWIN C. JOHNSON, COLO.

^ICtrrieb J§>iaic& S>en<xic
COMMITTEE O N FINANCE

Washington, D. C.
June 19, 1940.

FELTON M . JOHNSTON, CLERK




Hon* Marriner S. Eccles,
°hairman Federal Reserve Board,
Washington, D. C.
My dear Mr. Chairman:
Thank you very much for your
frank letter of June 17®
I think you are right that most
of the talk was speculation by the newspapers, but
I had heard some talk of it by a few Senators and
I just wanted to know from you that it was not true.
I have felt as you do there could be no necessity
for such control and have been somewhat surprised
to see the prices of Governments go up in face of
the bad news from abroad.
With best personal wishes, I
am
Very sincerely yours,
JGT/h.