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PERSONAL AND CONFIDENTIAL 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. Enclosure FEDERAL RESERVE BANK OF DALLAS IJ. R. PARTEN CHAIRMAN 0 " THE BOARD 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 government. „ 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. EXHIBIT A BARKERS AND BUSINESSMEN IN HOUSTON, TEXAS ATTENDING LUNCHEON HONORING GOVERNOR JAMES K. V A R D A M A N . JR., ON JANUARY 8. 1947 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
