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Chairman Eccles
Mr. Thurston

5/25 A 2


I would suggest that this be
referred to Mr. Kindleberger when
you have finished with it.



May 25,

Mr. J. H* Riddle,
Economic Adviser,
Bankers trust Company,
Mew York City.
Dear Mr* Riddle:
I am glad you sent me your memorandum on war finance in
Canada. I have kept rather more closely in touch with the Canadian
picture than I might otherwise have done because of my acquaintance
with Governor Towers of the Bank of Canada and the fact that Alvin
Hansen and Klndleherger of our staff have taken an active part in
connection with Canadian affairs. X think your memorandum is an excellent summation of the picture and, of course, confirms what I
have been stressing, that is, the Canadian success in financing with
a minimum of reliance on the commercial banks.
Some time ago I presented some over-all figures In connection with our own war financing to indicate that if our demand
deposits were on a comparable basis with Canada's, we would have
some 120,000,000,000 less. Yet they floated an issue that was sold
almost entirely to non-bank investors which would have amounted to
110,500,000,000 on a basis comparable with our resources. It goes
to show how much we can do without creating additional bank deposits
if we diversify and adapt our financing program properly.

Sincerely yours,
(Signed) M. S. Eccles

M. S. Socles,