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B O A R D CDF G O V E R N O R S FEDERAL !<r • F THE RESERVE SYSTEM WASHINGTON ; x A D D R E S S OFFICIAL TO THE C O R R E S P O N D E N C E BOARD March 2 1 , 1 2 5 B CONFIDENTIAL Dear M a r r ' n e r : I t e l e g r a p h e d y o u this afternoon r e g a r d i n g the r e q u e s t of the B a n k i n g and C u r r e n c y Com~ittee of the House t h a t they would like to have y o u t e s t i f y on the P a t m a n B i l l . r At the hearing t o d a y ' r. Patman offered some a m e n d m e n t s . He w a s asked b y some m e m b e r of the C o m m i t t e e w h y h e had not had the Chairman of the B o a r d o f G o v e r n o r s as a w i t n e s s on the b i l l , and also the T r e a s u r y and F . D . I . C . I understand his r e p l y was in e f f e c t that he did n o t care w h a t the Board's opinion might b e . A r e s o l u t i o n was then o f f e r e d , wh'ch will come to us p o s s i b l y t o m o r r o w , in which y o u w i l l be asked to a p p e a r before the C o m m i t t e e on a n y d a y after W e d n e s d a y of this w e e k . M r . Patman stated that he would be t h r o u g h h i s testimony b y W e d n e s d a y . A f t e r obtaining the aVove information from Kit 7i'illiams, I r e c e i v e d a telephone call from Congressman W . K . R e i l l y , of W i s c o n s i n , the third r a n k i n g Democratic member of the C o m m i t t e e . He asked me w h y the Board had n o t p u t in a n y t e s t i m o n y r e g a r d i n g the Patman B i l l . I tol^ him t h a t we had not been asked b y the C o m m i t t e e , and asked him if he t h o u r h t , under those circumstances,we should h a v e a p p e a r e d . He then told me w h a t Kit Williams had a l r e a d y told me and which I have outlined a t o v e , and said that he considered it m o s t important for you to appear before the C o m m i t t e e , ^e seems interested in developing b o t h sides of the q u e s t i o n s raised b y f*"r. P a t m a n , and referred p a r t i c u l a r l y to M r . Patman's "attacks" on you and the S y s t e m . I explained to h i m that you were out cf t o w n , I unders t o o d , u n t i l n e x t w e e k . He said that h e did n o t d o u b t that the C o m m i t t e e would a r r a n g e for a h e a r i n g to suit your conveni e n c e . He further said that his m a i l w a s containing an increasing n u m b e r of letters urging the p a s s a g e of the Patman B i l l , and he thought the matter should n o t be allowed to go b y " d e f a u l t " . I do n o t know y o u r c l a n s , but in some w a y had had the impression that y o u intended to be back in W a s h i n g t o n n e x t w e e k . Y o u r e c e n t l y a s k e d o v e r the t e l e p h o n e about h e a r i n g s on the tax b i l l . I u n d e r s t a n d they w i l l o r o b a b l y close b y the middle of n e x t w e e k . it * It is generally anticipated that the Reorganization Bill will pass the Senate next w e e k . It is also reported today on reliable authority that Senator Glass intends to start hearings on his Holding Company Bill next week. The bond market was strong t o d a y , as it was cn Saturday. We had a long conference in Washington on Saturday with George H a r r i s o n . This was satisfactory. We decided today that if strength continued e could dispose of sor^e of the bonds bought last w e e k . We are having sumrrer here t o d a y , but I don't know how long that will l a s t . I hope you are enjoying your stay in F l o r i d a . Telephone me if there is anything that I can add to the a b o v e . With kindest regards, as a l w a y s , Honorable Marriner S . Eccles Rooney Plaza Hotel Miami B e a c h , Florida ••'arch 1933 ~ The following is an excerpt fron the Dow-Jones News-ticker of today: "THE PRESIDENT SAID THAT HE PLANS TO SEND A •'ESSAGE TO CONGRESS ERG:' .'.'ARM SPRINGS SAYING AT ^IRST T T- AT IT WOULD BE ON BASK HOLDING COVPARIT-'S AND THEN AMENDINGTJ HIS STATEMENT TO SAY THAT IT AAS SO?*E OTHER TESSAGF E HAD IN YIND." / / BDARD DF FEDERAL GOVERNORS • F THE RESERVE SYSTEM WASHINGTON A D D R E S S DrriCIAL TO March 22, THE C O R R E S P O N D E N C E BDARD 1959 Thine*s are changing so fast these days that it is rather hard to keep you currently i n f o r m e d . This m o r n i n g , we received the r e q u e s t from the Banking and C u r r e n c y Committee of the House for aooearance on the Patman B i l l . I d i s c u s s e d it at the Board meeting and we concluded that there were three courses open to us: F i r s t , the submission b y the Bo^rd to the Committee of the statement on the bill that we had b e e n working on with D r . Goldenweiser and other members of the staff; second, individual appearances of members o f the Board; t h i r d , your a p p e a r a n c e as Chairman of the B o a r d . It seems to us that the third is nreferable for the reason that o b v i o u s l y this is what the Committee is asking and e x o e c t i n g . It wou?.d also a p p e a r that It would avoid some of the difficulties in either the first or second p lra n , which ycu and I ^ave d i s c u s s e d . If it would be h e l p f u l , I e e l that the Board can aoprove this statement previous to your vaooearance and you can submit is as a Board v i e w , and can then e entirely free to express your own individual opinions as to some oarts of the b i l l which y o u m a y want to discuss and w h i c h probably should be discussed. M After this m e e t i n g , I telephoned r . Goldsborouirh, who is A c t i n g Chairman of the Committee ( " r . Steacall bein? in Alabama and n o t expected b a c k until the latter oart of next week) and told him that you were o u t of town on a brief v a c a t i o n . He said that he knew of no one *ho deserved some rest more than you did and expressed his u s u a l friendly interest in you and what y o u were d o i n g . He said t h a t ^e would take r e s p o n s i b i l i t y for saying that there was no reason for y o u to cut your vacation short or change y o u r plans in a n y r e s o e c t so far a s the Patman Bill is c o n c e r n e d , and t h a t the Comm'ttee would be l^okin? forward to hearing y o u on your r e t u r n , which I told hi- I hoped for 3^our sake would n o t be b e f o r e V o n d a v , A p r i l 4 . There i s some d e f i n i t e advantage in letting the matter be deferred besides y o u r ^wn s c h e d u l e . T think there are going to be appetrances in oopositi^n to t h e b i l l , some of which ray raise questions that should b e answered by y o u . In other words, I think Patman's extreme views are going to be met by some equally extreme views on the other side, and that we will then have a chance to balance these and rationalize the situation more completely week after next th«n would be t^e case next w e e k . I telegraphed y o u , givinp you "r. Goldsborourh's statement, as soon as I had finished talking with him. v I h'jve also just learned this afternoon t^at t e hearings on the bank holding comoany bill will in all orobability not come u p next w e e k . Senator Glass is still in town and there does n o t appear to be any reasonable expectation that he is l e a v i n g . Other things have intervened indicating (as of today) that these hearings will not corre up very soon. Another factor in this situation is the published reoort today that the President is not going to send his monopoly message to Congress before his return from 7/arm Sorinrs, Georgia. There is nothing connected with t h e reorganization b i l l , about which I have been advised, that requires your presence h e r e . So far as the tax bill is concerned ir. the Senate it would appear from newspaper accounts to be set and I ?,ould n o t anticipate that anyone's testimony could change the course I think that committee will take in regard to somen aspects of the b i l l , in which y o u are interested. I think t- eir report ""ay be mr-de anytime next w e e k . So you will see that in two matters,-namely, the Patran ^ill and the Bank Holding Company E i l l , the situation is definitelv changed from last evening w^en I wrote y o u . I hope this wil"* relieve 2TOur mind and that you will stay on in Florida. I would like to see the annual report completed, and this is the opinion o ^ the Board this mornin? and all of the members of the s t a f f . I am informed that all oartsv of it, which are in g a l l e y , have been submitted to y o u , and t a t I r . Goldenweiser will h? ve comoleted his oorti'^n of it s-—eti-e this afternoon. I will send you this under separate cover 1 and w i ! aDoreciate it if you will read it and return to me air -ail with a n y suggested c h a n g e s , or clear it b y wire if y o u have no changes. I am doinf the same thin? with John McKee. ( 1 Szyncza -:, Davis,and I will read it at once and clear it so far as we are concerned, so that the whole report can to the printer and be ready for filin? at the earliest oossible d a t e . Honorable "arriner Eccles Rooney Plaza Hotel Yiarai B e a c h , Florida AIR "AIL V i RSwfD lis *TLES S E C T ! BOARD OF FEDERAL GOVERNORS • F THE RESERVE SYSTEM » WASHINGTON / . A D D R E S S OFFICIAL. TO THE C O R R E S P O N D E N C E B Q i R O March £ 3 , 1933 Confidential Dear V a r r i n e r : Tie h a d the meeting today on the subject of loans to i n d u s t r y . M r . D o u g l a s ' o r o p o s a l was discussed at sore l e n g t h . It did n o t m e e t with a v e r y cordial r e s n o n s e . There seems to be the g e n e r a l feeling that existing agencies should be u s e d , and that S . F . C . , R . F . C . , and the Federal Reserve could work cut to^et^er sore statement that could be submitted to the President for public use and as indicating t h a t the existing arencies of Government were prepared to do a g r e a t deal alcng this l i n e , and that n o s s i b l y some chanres or amendments in existing* laT*'E co^ild make them more e f f i c i e n t . M r . Jones is to prepare such a s t a t e m e n t , but I do not anticipate that ^e will have it r e a d y before the early oart of n e x t w e e k . The existing a p p l i c a t i o n s for credit known to any of the three agencies in question are to be exrlcred with a view of a s c e r t a i n i n g if some h e l p can be extended to these particular a p p l i c a n t s and for the purpose o f determining the class of a p p l i c a n t and the type of financing he may desire. I think your rremorandum contained sur~esticns as to 1 amendments to existing laws applicable t o a l three a g e n c i e s , or chanFes in existing p r a c t i c e s b y these a g e n c i e s , which would be h e l p f u l in the s i t u a t i o n , a n d , if you are not back b y the time of the n e x t T e e t i n ^ , I will again brine ther u p for c o n s i d e r a t i o n , as I did at today's meetiner. I do n o t know h e t h e r your memorandum w e n t to4 V r . James R o o s e v e l t . He ras p r e s e n t at the ^eetir.r to' ay. Neither am I sure that it w e n t to the P r e s i d e n t , although I understand there was a memorandum in h i s file from you on this subject. r ,; T understood froT you or L a r r y before you left t h t ayne Taylor had a c ovp y of i t . D o u g l a s stated that he had not seen it. I did not n o w -vhat, if a n y t h i n g , y o u wanted to do abcut giving it circulation beyond those to whom y o u sent it before you l e f t . » - 2 - Regardinr t h e Patman E I 1 1 , S e a tor Owens continued his testimony t o d a y . I am advised that Congressmen Reilly, "eeks, and Luce defended the Federal Reserve Syste~ from sorre of his a t t a c k s . The Economists' Committee on •"onetarT'' Policy have requested that six witnesses be permitted to testify on behalf of that committee against the b i l l . They are: B e c k h a r t , of Columbia K e m m e r e r , of ^rinceton Sprague, of Harvard P h i l l i p s , of Iov.a G i d e o n s e , of Chicago B e l l , of North Western University. v The Committee voted to permit t e m to testify, and they will be heard next w e e k . Mr, Spahr is also scheduled to testify against the b i l l . I think the condition of the market today was in ?art attributable to the announcement by the British Cabinet v v cn the subject of the Countries East of t e R i n e . It is believed that this caused the London market to sell off considerably tefcre the opening of the New York Exchan e, which is supposed to have reflected the London's ~arket res^once to this announcement. Honorable Warriner Eccles Rooney Plaza Hotel Miami B e a c h , Florida
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