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Received from M. S. Eccles, Board of Governors of Federal Reserve System, letter and documents, on October 20, 191+7* For Mr. Stevens: Secrecy* /^¿T^" D i s t r i c t of Corambia Senate Committee Room» October 20, 1947. Mr. Louis M. Stevens, D i s t r i c t of Columbia Caoaittee Room, Capitol Building, Washington, D. C. Dear Mr* Stevens» As I promised you in our discussion of Federal Reserve lending powers, I an sanding you herewith the following material bearing upon the pending legislation relating to the authority of Federal Reserve Banks to guarantee loans to business enterprises* 1* B i l l S* ij08 in the f o r « in which i t was reported unanimously by the Senate Committee on Banking and Currency to the Senate on April 28, 192*7* 2* The report ef the Senate Committee cm Banking and Currency aooompenying this b i l l * 5* The statement which I presented at the hearings of the Senate Banking and Currency Coralttee cm this b i l l on April 1?, 191*7I t was my understanding from my conversations with Chairman Wolcott of the House Banking and Currency Cosmdttee who introduced the companion b i l l in the House (H. R. 3268) that i t was his plan to await favorable action by the Senate on S. Ij08 before reporting the legislation favorably to the House but that the press of other business prevented action by the Senate on S. IfiB before i t s adjournment so that the b i l l continues on the calendar of the Senate for action at the next session* The proposed legislation has been endorsed by the Under Secretary of Commerce, the Subcommittee of the Small Business Advisory Coamittee to the Secretary of Commerce, and several State bankers llr. Louis k . Stevens -2- Assooiations• Hie p r i n c i p l e embodied in the l e g i s l a t i o n was supported by the Research and Polioy Committee of the Committee for Eoonoraio Development. As pointed out in the Senate Committee Report, the proposed l e g i s l a t i o n would replaoe the existing authority of the Federal Reserve Banks contained in seotion 13b of the Federal Reserve Aet by a new provision in seotion 13 under whioh no Government appropriations or drain on the Federal budget would be involved in operations under the b i l l . The Reserve Banks would use their own funds i n carrying out their authority to make guarantees and the b i l l would not plaoe the Reserve Banks in competition with the private banking system. Aside from the i n d u s t r i a l loan powers, the Federal Reserve Banks, as I pointed out to you, have broad powers to discount e l i g i b l e paper f o r member banks and to make loans or advanoes to member banks on any sound a s s e t s . These powers are covered by Regulation A of the Board of Governors, a copy of whioh I enclose and in whioh you w i l l f i n d in an Appendix the statutory provisions oovering this authority of the Federal Reserve Banks« I f there i s any further material that you would l i k e to have, please do not hesitate to c a l l upon me. Yery t r u l y yours. M. 3 . Kooles, Chairman. Enclosures CL. seju Ffl CHARLES W . TOBEY, N. H., CHAIRMAN C. DOUGLASS BUCK, DEL. ROBERT F. WAGNER, N. Y. HOMER E. CAPEHART, IND. BURNET R. MAYBANK, S . C. RALPH & FLANDERS, VT. GLEN H. TAYLOR, IDAHO HARR • CAIN, WASH. J. W . FULBRIGHT, ARK. JOHN w f BRICKER, OHIO A. W I L L I S ROBERTSON, VA. JOSEPH R. MCCARTHY, W I S . JOHN SPARKMAN, ALA. f. lüCrwieb ^ i a i e s ^ e n a i e ROBERT C. HILL, CLERK COMMITTEE ON BANKING AND CURRENCY Senate D. C. Rooms U. S. Capitol October 22, 1947 Mr. M. S. Eccles, Chairman Federal Reserve System Washington, D. C. Dear Mr. Eccles: Thank you for your letter of October 20, and for its enclosures. They are just what I wanted. A little later on when I have fully familiarized myself with this matter, I shall ask you again to let me come to see you. Yours sincerely, Lewis M. Stevens Chief Counsel R.F.C* Inquiry LMS/vmo CHARLES W . TOBEY, N. H. f CHAIRMAN C. DOUGLASS BUCK, DEL. ROBERT F. WAGNER, N. Y. HOMER E. CAPEHART, IND. BURNET R. MAYBANK, S. C. RALPH E. FLANDERS. VT. GLEN H. TAYLOR, IDAHO HARRY P. CAIN, WASH. J. W . FULBRIGHT, ARK. JOHN W . BRICKER, OHIO A. W I L L I S ROBERTSON, VA. JOSEPH R. MCCARTHY, WIS. JOHN SPARKMAN, ALA. ROBERT C. HILL, CLERK 'jHCtiHeb ^ ( a i e s d e n o t e COMMITTEE ON BANKING AND CURRENCY Senate D. C# Rooms U. S. Capitol December 15, 1947 Mr. Marriner S. Eccles, Chairman Board of Governors Federal Reserve System Wasnington, D. C• Dear Mr. Eccles: Please accept my personal tiaanks for your kindness in giving me the opportunity to set our RFC problems before you, and for s< nelpfully cooperating with us in arranging for your appearance before the Senate Subcommittee. Yours sine erely Lewis M. Stevens Chief Counsel RFC Inquiry LMS/vmo
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