View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.


March 2U, 19U7-

Dear J.R. :
For your personal and confidential information,
I enclose a copy of a report that I have also sent confidentially to Bandy Gilbert. I wanted, if possible, to
get from him and also from you a similar report of Vardaman's
activities in your area. I am obtaining information from the
various Federal Reserve districts which he visited. It all
seems to follow much the same line, according to oral and
written information I have so far received.
It occurred to me that you would have the information about Houston as Bandy would about Dallas. I would be
particularly interested in any supplemental information you
might have, including criticism of John Snyder and the "White
House. I understand that there was a good deal of this from
time to time in conversations.
With best regards,
Sincerely yours.

Mr* J. R. Parten, President,
Woodley Petroleum Company,
Houston, Texas.


April 22, 1947

Fersonal and Confidential
Mr. Karriner S. Eccles,
Chairman, Board of Governors,
Federal Reserve System,
Washington, D. C.
Dear Marriner:
Enclosed you will find a report which
I believe is factual on Governor Vardaman1s
address upon his visit to Houston on January
8th. I am attaching this in duplicate.
I believe this presents a fair story
of his remarks here.
It is very clear to me that Governor
Vardaman1s conduct has been a discredit to
the Administration which appointed him. I
don't think this has been intentional, but on
the other hand in his zeal to condemn all
regulations he has struck at the President as
well as other administrators in Washington.
Trusting that this confidential report
to you ^^rill serve some constructive purpose,
and with my best personal regards, I am
Sincerely yours,

Enclosures (2)

Memorandum Report on Governor Vardaman1s
Address at a Luncheon at the Rice Hotel.
Houston. Texas, on Wednesday. January 8. 1947

This luncheon was arranged by the Vice President in
Charge, Mr. Pondrom, of the Houston Branch of the Federal
Reserve Bank of Dallas, Texas.
Those invited to this luncheon were all the Directors
of the Houston Branch, the Chairman of the Federal Reserve
Bank of Dallas and several leading bankers and prominent
business men of Houston. A list of those who attended is
attached hereto and marked "Exhibit A".
Governor Vardaman was the honor guest at this luncheon
and was introduced by J. R. Parten, Chairman of the Board
of Directors of the Federal Reserve Bank of Dallas.
Governor Vardaman began his remarks by saying that he
had been chosen a governor of the Federal Reserve System
in the absence of any effort or expressed desire upon his
part; that upon acceptance of the office he was aware that
his philosophy of government departed widely from that of
many of those responsible for administration in Washington.
He renuested that his remarks be "off the record".
He took the thesis that bureaucratic controls which
have grown up in Washington in the past several years and
exist today are destructive of constitutional governnent.
He said that a return to constitutional government would
reouire the elimination of all controls then exercised by
the several departments and bureaus of the Federal
He said that while he might cite many departments
now exercising bureaucratic controls, which he was condemning, he would take the actions of the Board of Governors
of the Federal Reserve System, of which he was a member, as
prime examples. He particularly condemned Regulations T,
U and W as examples of unnecessary regulations in the discharge of Federal Reserve responsibility and said they were
unauthorized by the Congress. While no other specific
regulations were condemned specifically, his attack clearly

^ /

went to those issued by all departments from the Executive
branch down.
Governor Vardaman concluded with a forceful plea to
those oresent to write, wire or talk to their Congressmen
in the interest of abolishing these controls.
After his talk he invited Questions and comments.
It was rather amusing that in his comment Mr. Jesse
Jones, who said he was entirely in sympathy with the
Governor's objectives, asked to be permitted to spread upon
the front page of the Chronicle that afternoon a resume of
the talk. Governor Vardaman responded that he would much
prefer to be off the record and reasoned that the most
effective way to get results in Washington would be for
those interested tc communicate with their representatives
in Congress.
It was also amusing that one of the prominent business
men in the group, after saying he was one hundred percent
in agreement with the philosophy and objectives of the
Governor, urged forcefully that the Governor take back to
the White House a message detailing the shock and concern
of business men generally over the President's labor plank
put forth in his report to Congress on the state of the
Union a few days before. Governor Vardaman again demurred
and insisted that the appropriate means of getting this
message over was through your congressional representative.
In his criticism of bureaus or departments the
Governor celled no names, as I recall, but the implication
was clear that his attack was upon the whole Democratic
administration as well as bipartisan bureaus which have
fostered and administered regulations.
While his attack was particularly directed at his colleagues on the Federal Reserve Board, it was crystal clear
that it was directed at all departments. It was clear that
his plea was designed to create dissatisfaction with all
regulations indiscriminately, without differentiating
between those apparently accepted beyond controversy, such
as the Securities and Exchange regulations, and those which
might be characterized as more controversial.

- 2 -

Personally, I took the speech, and feel others did,
as purely political with the especial objective of revolutionizing the policies and procedures established and followed
by the Federal Reserve System. It was clear that his colleagues upon the Board of Governors, as well as other prominent leaders in the Administration, were out of step with him.


Mr. J. A. Elkins, President
City National Bank
Houston, Texas

Mr. A. D. Simpson, President
National Bank of Commerce
Houston, Texas

Mr. Jno. M. Griffith, Vice President
City National Bank
Houston, Texas

Mr. B. Magruder Wingfield, Vice Pres. &
National Bank of Commerce
Tr. Off.
Houston, Texas

Mr. T. P. Priddie, President
Federal Intermediate Credit Bank
Houston, Texas

Mr. S. R. Lavrder, President
South Texas Commercial National Bank
Houston, Texas

Mr. Joel H. Berry, President
South Main State Bank
Houston, Texas

Mr. Harris McAshan, Vice President
South Texas Commercial National Bank
Houston, Texas

Mr. Sterling Evans, President
Federal Land Bank
Houston, Texas

Mr. E. A. Craft, Executive Vice President
Southern Pacific Lines
Houston, Texas

Mr, F. M. Law, Chairman of the Board
First National Bank
Houston, Texas

Mr. George Hamman, President
Union National Bank
Houston, Texas

Mr. P. P. Butler, President
First National Bank
Houston, Texas

Mr. L. Goldston, Vice President
University State Bank
Houston, Texas

Mr. C. M. Malone, Vice Chairman of the Bd,
Second National Bank
Houston, Texas

Honorable Jesse H. Jones
Houston, Texas

Mr. L. R. Bryan, Jr., President
Second National Bank
Houston, Texas
Mr. C. G. Andler, Ex. Vice President
Industrial Stste Bank
Houston, Texas
Mr. F. C. Guthrie, Vice President
Harris"burg National Bank
Houston, Texas
Mr. 0. R. Weyrich, President
Houston Bank & Trust Company
Houston, Texas
Mr. Melvin Rouff, First Vice President
Houston National Bank
Houston, Texas

Mr. B. C. Rooerts, President
Wharton Bank & Trust Company
Wharton, Texas
Mr. J. E. Wheat
Woodville, Texas
Mr. Ed Naylor, President
Houston Chamber of Commerce
Houston, Texas
Mr. Gus Wort ham, President
American General Insurance Company
Houston, Texas
Mr. J. R. Parten, President
Woodley Petroleum Company
Houston, Texas
Mr. George R. Brown
Brown & Root, Inc.
Houston, Texas

- 2 -

Mr. J. Russell Wait, Director of Port
Houston Ship Channel Navigation District
Houston, Texas
Mr. Louis Dietz, Ex. Vice President
East End State Bank
Houston, Texas
Mr. Wm. A. Kirkland, President
Port .City State Bank
Houston, Texas
Mr. Tom W. Gregory, Jr., President
Fidelity Bank & Trust Company
Houston, Texas
Mr. N. C. Hoyt, President
Norris Lumber Company
First National Bank Bldg.
Houston, Texas
Mr. W. I. Phillips, Manager
Loan Agency
Reconstruction Finance Corporation
Houston, Texas
Mr. Melvin Kurth
Andrews, Kurth, Campbell & Bradley
Gulf Bldg.
Houston, Texas
Mr. Geo. A. Hill, President
Houston Oil Company
Houston, Texas