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Ï Ê ù J r \ -~ _____________________________________________________ _________________________________ U.C l9 t w k M í \t í a f t ^ Lu- ^ k^L oC>-^>U ife ^ 6 — _________________ l h á M * - - - ifo £ * t v U ^ __________ / f ^ g — & A t é - A .__________ . £ * = : H ß p . ._ ..j:& A > & jL U>rt--¿£Zup-___ c ^ jÚ S L r $ O J$ £ ~ ...... . J c¿ í< J ¿ ; _ ifajAK. ‘i u K H M a -jfa ¿ l p t ft â y Ujfykct* ^ u M u i C f ' ^ c - o A v f e w .. L e s & u u g , a £ L Ü Ä _____________________ ^ ^ ^ ^ ^ ^ yy i, jj^ / C A . ¿ 'j $ ß a ^ a -iL Í tu * <^)U ^Ù €,__ Á & t- f ó t t e c f- (iH fc c t ~í@ í} V / u ^ ¿ f W T Û & cw u jd k c a . e J & v ^ u ÿ i ÙjÛ uÆ c ^ ^ m s ï» . ^ - o . _____ i 2 /u £ 3 ) j ¿ú ____ i t e , , j f e ____ é& éí c f Ám *l ûe.aùyui &¿&5f — ^ a ^ ~ £ - us&éM*. c*~fií$jf [ jer ika ¿4 ^ c^L iH w aMo N &%<>*. 3 Ái£*uOia£ ëf-itu fHa¿t qu’cQ Hcfóy at Jte^cd&j^ u^fig.¿. SfetSm o j- Í u 4 ~ M í ^ U ^ j. ; (■ '■ & *£, ck . M M v -d & f fó c t> -p *’K > ! ‘¿ ^ b 23 December 2, 194-6 R .C .L E F F IN G W E L L Sear Mr* Chairman: I have just had an opportunity to read your Boston speech of October 23rd in the Federal Reserve Bulletin for November* I had of course seen newspaper accounts of it, which however were not very adequate. N ow that I have read the speech as a whole I want«* to congratulate you upon it. I find m y s e l f in very general agreement w i t h your views and policies as outlined in this speech, at least so far as concerns conditions at the present time. I am unable to discover whether the complexity of conflicting forces operating on our economy will be inflationary or deflationary on the whole. I don't see h ow anybody can tell indeed, while so m u c h r e mains unsettled and unsettling in the foreign and in the domestic field. So, though six months ago I favored taking the peg out from under Treasury bills and certificates, I should not favor any change at the present time, or any change in margin requirements, or any farther change in installment selling restrictions. This is no time to take steps calculated to st or for taking any of the more Annual Report. Taken all together, I am saying in a long-winded w a y what I began to say briefly. statement of policy. Hon. M. S. Eccles Chairman, Board of Governors federal Reserve System Washington, D. 0. I congratulate you on an admirable December 4, 1946. Dear Mr. Leffingwell: as you know from our past correspondence, I have great respect for your opinions because of the wealth of experience you have had both in public and private life and because your approach to public questions is both en lightened and constructive. I am willing to concede that even when we may not see eye to eye. I am, of course, sure of it when our viewpoints coincide as closely as is indicated by your let ter of December 2. It is most gratifying and heartening. Needless to say, I greatly appreciate it. Sincerely yours, Mr. K. C. Leffingwell, 23 wall Street, New York City. EF:b December 16, 1946 R.C. LEFFINGWELL Dear Mr. Chairman: It was most gracious of y o u to send m e that charming letter of December 4th. It is a poor return for your kindness to bother you with another letter from me, but I feel sure y ou won't mind. I should like to elaborate just a l on what I said in m y last letter to yo u about not taking the peg out from under Treasury bills and certificates at the present time. Last M a y I thought the peg should be taken out. I still think it would have been a good idea to do it then. But when I wrote y o u on December 2nd, the situation was obscure. It was not clear whether inflationary or deflationary forces were dominant. I thought it would not be at all prudent to take the peg out then. But sooner or later the time should come to do it. Already, international relations and labor relations, which were discouraging, have improved. Furthermore, the application of reserve-free deposits to debt retirement has been about completed, and this deflationary factor is over and done with. It would not surprise me therefore if pretty soon the inflationary factors should again appear to be on top. Whenever that happens then again I should be inclined to suggest taking the peg out, and freeing the Federal Reserve authorities to buy and sell securities for their portfolio in accordance w i t h their good judgment of the m o ney m a r k e t ’s needs protecting t he market for government securities but not pegging it It is largely a question of timing I think. Faithfully yours Hon. M. S. Bccles Chairman, Board of Governors Federal Reserve System Washington, D. C.
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