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FEDERAL RESERVE BANK OF SAIST FRANCISCO SAN FRANCISCO 20, CALI FORN IA April 1, 1947 C.E.EARHART, PRESIDENT PERSONAL AND CONFIDENTIAL Dear Mr. Eccles: In response to your letter of March 20, I am enclosing a copy of a memorandum outlining briefly the composite recollections of several officers of this bank who attended meetings in the Twelfth District at which Mr * Vardaman spoke• There was such a similarity between each of the talks that nothing would be gained by attempting to present a separate memorandum on each meeting• Furthermore, since the talks were given "off the record", we are dependent entirely on recollection, which is faulty as to detail. Governor Vardaman visited the cities in which we have offices on the following dates: Seattle Portland San Francisco Los Angeles Salt Lake City November 6 to 3, November 9 * 1946 November 10 to 13> November 15 to 20, November 21 to 22, 194-6 194-6 1946 1946. I -understand he also visited Spokane and Phoenix. No representative of this bank was present, we having had no advance information of such visits. In general, the remarks made by Mr. Vardaman in the Twelfth District appear to be similar to those reported in the attachment to your letter of March 20. Very truly yours Mr. Marriner S. Eccles, c/o Board of Governors, Federal Reserve System, Washington 25, D. C. Enclosure April 1, 1947 MEMORANDUM SUBJECT: Governor Vardaman's Visit to the Twelfth Federal Reserve District Governor Vardaman talked off the record at the following meetings: Nov, 7, 194.6 - Luncheon given by BSr. L. M. Arnold at Rainier Club, Seattle, 75 bankers and industrialists. Nov. 7, 1946 - Meeting, Board of Directors, Seattle Branch. Nov. 7, 1946 - Dinner given by Mr. George Greenwood at Olympic Hotel, Seattle, 175 bankers. Nov. 8, 1946 - Luncheon given by Mr. Reno Odlin at University Club, Tacoma, 75 businessmen and bankers. Nov. 9, 1946 - Luncheon, Arlington Club, Portland. Nov. 12, 194-6 - Meeting, Board of Directors, Federal Reserve Bank of San Francisco. Nov. 12, 194.6 - Luncheon, Bohemian Club, San Francisco. Nov. 15, 194.6 - Meeting, Board of Directors, Los Angeles Branch. Nov* 15, 194-6 - Luncheon, California Club, Los Angeles. Nov. 21, 194-6 - Luncheon, Hotel Utah, Salt Lake City. Nov. 22, 194.6 - Meeting, Board of Directors, Salt Lake City Branch. Nov. 22, 194.6 - Luncheon with Board of Directors, Salt Lake City Branch. Copies of the lists of guests at the luncheons or dinners given by the Federal Reserve Bank of San Francisco are attached. Following is a composite recapitulation of the principle views expressed by Mr. Vardaman at the various meetings: Mr. Vardaman stated that the purpose of his trip was to gain information for his use in the performance of his duties, and to meet business men and bankers to whom he might be helpful in Washington. Mr. Vardaman paid tribute to the efficiency of Marriner Eccles and his handling of a difficult task. On the other hand, he indicated that he did not see eye to eye with Mr. Eccles on various subjects. He stated that he was opposed to government by bureaus, that a government by decrees and regulations should be dispensed with, and that the elected representatives of the people should regain control of government. He inferred that the Board of Governors had gone too far in its attempts to regulate, referring particularly to Regulations T, U, and W« He deplored the situation where so small a group could exercise so much control over such an American institution as the stock exchange. His remarks left the impression that he had construed his job on the Board of Governors to be to introduce a more responsive relationship between the Board and the banks and public of the country. One also received the impression that he had not sought his appointment on the Board and that he hoped he might accomplish a mission and not serve out his full term. Mr. Vardaman stated that he believed in the greatest degree of individual operation and autonomy of the regional Federal Reserve Banks, that the Board of Governors should be only a broad, policy-making body, carrying out only the clearly defined intentions of Congress. He gave the opinion that the directors of the banks had not been given sufficient freedom to function because the Board of Governors was concerning itself with details of operation. He encouraged the directors to assert themselves more and make their wishes known. He spoke in favor of branch directors having more say in branch operations. He indicated that the Inland Empire, including western Montana, should be served by a branch of a Federal Reserve Bank in Spokane. In Seattle he expressed the view that in time the Districts should be redrawn and that it would seem to him that a Head Office should be established in Seattle. He favored continuance of the dual banking system of national and state banks. He was not in favor of direct government lending to business, or in favor of the guarantee of loans to industry made by others, but believed that banks eould and should make the loans at their own risk according to sound credit standards. Mr. Vardaman expressed the feeling that the bankers should go to Congress to get the Bank Holding Company legislation introduced and enacted. They should not expect initiation of a bill by the Board or other bureau. Mr. Vardaman suggested that his listeners contact their Congressmen so that the Congressmen might know how people outside Washington feel. Guests at luncheon for Governor Vardaman, at Arlington Club, Portland% on November 9» 1946 Director of Federal Reserve Bank of San Francisco Chas. H. Stewart, President, Portland Trust & Savings Bank' Member of Industrial Advisory Committee of Federal Reserve Bank of San Francisco Edmund Hayes, President, Row River Lumber Company, Portland Branch Directors • E. B. MacNaughton, President, First National Bank of Portland Wm. H. Steen, Farping and livestock, Milton, Oregon. Aaron M. Frank, President, Meier & Frank Co., Portland Bankers E. C. Sammons, President, United States National Bank of Portland A. L. Mills, Jr., First Vice President, United States National Bank of Portland Frederick Greenwood, Manager, The Bank of California, N. A., Portland Ralph Thorn, Assistant Manager, The Bank of California, N. A., Portland B. S. Deacon, Manager, Canadian Bank of Commerce, Portland C. F. Adams, Executive Vice President, Portland Trust & Savings Bank, Portland C. B. Stephenson, Vice President, First National Bank of Portland Portland Branch, Assistant Manager,/Federal Reserve Bank of San Frai J. P. Blanchard, D. E. Bent, Assistant Manager, Portland Branch, Federal Reserv* Bank of San Francisco S. A. MacEachron, Assistant Manager, Portland Branch, Federal Reservi Bank of San Francisco D. L. Davis, Managing Director, Portland Branch, Federal Reserv< of San Francisco List of those attending luncheon given in honor of Mr * James K « Vardaman, Jr., Member, Board of Governors of the Federal Reserve System, at the Bohemian Club, San Francisco» November 12, 19A6 General Counsel, Federal Reserve Bank of San Francisco Agnew, A. C « Baer, Francis S. Senior Vice Chairman, Bank of America N. T. & S. A., San Franci Byrd, Carroll F. Class A Director, Federal Reserve Bank of San Francisco Calkins, Allard A. President, Anglo California National Bank, San Francisco Earhart, C. E. President, Federal Reserve Bank of San Francisco Gaither, H. R. President, Pacific National Bank, San Francisco Eastman, Carl J. First Vice President, San Francisco Chamber of Commerce Vice President & Pacific Coast Manager, N. W. Ayer & Son, Inc. Giannini, A * P. Founder-Chairman, Bank of America N.T.& S.A., San Francisco Hellman, I. W. President, Wells Fargo Bank & Union Trust Co., San Francisco Holden, St. George Class B Director, Federal Reserve Bank of San Francisco Hunter, J. J. President, The Bank of California N. A., San Francisco Johnson, Walter S. Class B Director, Federal Reserve Bank of San Francisco Lipman, F. L. Chairman, Wells Fargo Bank & Union Trust Co., San Francisco Lochead, James K. President, American Trust Company, San Francisco Mcintosh, C. K. Class A Director, Federal Reserve Bank of San Francisco McKee, John D. Chairman, American Trust Company, San Francisco Mangels, H. N. Vice President, Federal Reserve Bank of San Francisco Moffitt, James K. Nichols, Henry D. Starr, Walter A. Chairman, Crocker-First National Bank, San Francisco Member, Industrial Advisory Committee President, Tubbs Cordage Co. Member, Industrial Advisory Committee Chairman, Sound view Pulp Company Wellman, Harry R. Class C Director & Deputy Chairman, Federal Reserve Bank of S. Wente, Senior Vice President, Bank of America N. T. & S. A., San Franc C. F. Yftieeler, Oliver P. Director of Research, Federal Reserve Bank of San Francisco Wilbur, Class C Director, Federal Reserve Bank of San Francisco Brayton Attendance at Luncheon to Governor Vardaman, Board of Governors of the Federal Reserve System California Club, Los Angeles, November 15% 1946 Bank of America National Trust & Savings Association Los Angeles Main Office, Los Angeles, California J» E. Fishburn, Jr. Keath L. Carver, Vice President Vice President California Bank, Los Angeles, California Frank L. King, President Clifford Tweter, Vice President The Canadian Bank of Commerce (California), Los Angeles, California E. H. Mitchell, Vice President Citizens National Trust & Savings Bank, Los Angeles, California Herbert D. Ivey, President L. 0. Ivey, Executive Vice President Farmers and Merchants National Bank, Los Angeles, California V. H. Rossetti, President President, Los Angeles Clearing House Association H. M. Craft, Vice President Security-First National Bank of Los Angeles, Los Angeles, California George M. Wallace, President (Now Chairman of the Board) Chester A. Rude Vice President (Now Chairman of the Executive Committ and Vice President) Union Bank & Trust Co., Los Angeles, California Ben R. Meyer, J. C. Lipman, M. G. McMahon, President Vice President President, California Bankers Association President, First National Bank at Glendale, Californi R. S« Beasley, President, Independent Bankers Association of the Twelfth Federal Reserve District Vice President, Beverly Hills National Bank & Trust Company, Beverly Hills, California H. G. Markworth, President, Independent Bankers Association of Souther California Vice President, Santa Monica gommercial & Savings Ban Santa Monica, California — 2— H. N. Thompson, Secretary-Manager, Los Angeles Clearing House Association James E. Shelton, Chairman of the Executive Committee and Vice President, Security-First National Bank of Los Angeles (Now President) President, Los Angeles Chamber of Commerce Hector C. Haight, Manager, Los Alleles Loan Agency, Reconstruction Finance Corporation, Los Angeles, California Shannon Crandall, Vice Chairman, Industrial Advisory Committee of the Twelfth Federal Reserve District Chairman of the Board, California Hardware Company, Los Ang R. K. Moulton, R. H. Moulton & Co., Los Angeles, California Bonds Chairman, Advisory Committee, Savings Bonds Division for Southern California, Treasury Department, Los An, J. Derry Kerr, Partner, Kerr & Bell, Los Angeles, California Investments I. Frank Freeman, Vice President, Paramount Pictures, Inc., Hollywood, Califo. Chairman of the Board, Los Angeles Branch, Federal Reserve of San Francisco Fred G. Sherrill, Vice President, J. G. Bonwell Co., Los Angeles, California(< Director, Los Angeles Branch, Federal Reserve Bank of San Francisco W. N. Ambrose, Managing Director, Los Angeles Branch, Federal Reserve Bank of San Francisco (Now Vice President & Manager) Fred C. Bold, Assistant Manager, Los Angeles Branch, Federal Reserve Bank of San Francisco M. McRitchie, Assistant Manager, Los Angeles Branch, Federal Reserve Bank of San Francisco Bank and Business Executives Present at Luncheon Held in the President's Room, Hotel Utah, Salt Lake City, November 21, 1946 Governor James K. Vardaman, Jr., Member, Board of Governors, Washington, D. Orval W. Adams Salt Lake Citj Executive Vice President, Utah State National Bank, Director, Salt Lake City Branch, Federal Reserve Bank of San Francisco Clarence M# Bamberger, Investments Salt Lake Citj Harold H. Bennett, Vice President and General Manager, Zion's Cooperative Mercantile Institution Salt Lake Citj R. K. Bradford, Executive Assistant, Denver & Rio Grande Western Railroad Salt Lake Citj Marriner A. Browning,J. M. & M. S. Browning Company, Ogden, Utah James W # Collins, President, Tracy-Collins Trust Co. Salt Lake Citj George S * Eccles, President, First Security Bank of Utah, N. A. Ogden, Utah George M. Gadsby, President, Utah Power & Light Co, Salt Lake Citj Walter Mathesius, President, Geneva Steel Salt Lake Citj D. D. Moffat, President and General Manager, Utah Copper Company Salt Lake Citj F. S. Mulock, Vice President, United States Smelting, Refining & Mining Co* Salt Lake Citj George S. Murphy, Vice President and Cashier, Continental National Bank & Trust Co. Salt Lake Citj R. C. Rich, R. C. Rich Sheep Company, Director, Salt Lake City Branch, Federal Reserve Bank of San Francisco Burley, Idaho D. F. Richards, President, American National Bank, Director, Salt Lake City Branch, Federal Reserve Bank of San Francisco Idaho Falls, ] Charles L. Smith, President, First National Bank, Salt Lake Citj Willard R. Smith, Vice President and Cashier, Zion's Savings Bank & Trust Co* Salt Lake Citj L. P. Van Voorhis, Vice President, First Security Trust Company, Salt Lake Citj John M. Wallace, President, Walker Bank & Trust Co., Salt Lake Citj Company F. A. Wardlaw, Jr., General Manager, International Smelting & Refining Co. ,Salt Lake Cii Ralph B. Wright, W. L. Partner, Vice President, Union Trust Company, Salt Lake Cit; Managing Director, Salt Lake City Branch, Federal Reserve Bank of San Francisco, Salt Lake Citj MEMORANDUM At the meeting of the Board of Directors of the Los Angeles Branch of the San Francisco Federal Reserve Bank, in November, shortly after the 1946 elections, Governor Vardaman of the Federal Reserve Board in Washington was in attendance. Governor Vardaman was introduced to members of the Board, and after the regular affairs had been attended to, he was asked to talk informally to the group, and the members of the Board were invited to engage in a discussion with the Governor. Mr. Vardaman did most of the talking. Personally, Iwas not too favorably impressed with him. I did not discuss him or what he said with any of the other Board members• Following the meeting of the Board, a luncheon was given in his honor at the California Club in Los Angeles, at which there was in attendance the Board of the Branch, and I think all of the Los Angeles area bank presidents. The Governor talked at some length at this luncheon also. He seemed a little surly, to me, except that I thought he enjoyed the mantle of martyrdom - in a way, self-imposed - which he wore. Certainly he left the impression with me that he was a lone wolf crying in the wilderness, championing the enterprise system of America in a wholly unsympathetic atmosphere in Washington, D.C. "Almost no one wants to save America", said I to myself, "except Governor Vardaman. He is being opposed at every turn. He is constantly giving sound advice to the President, the Secretary of the Treasury, the Chairman of the Federal Reserve Board, but mostly it is falling on deaf ears - but he will not give up. America will be saved in spite of its enemies in high places". Now, it is possible that I am over-doing this, but I have, to a degree, a memory, and in some instances it is fortunate; some,unfortunate. In a general summary of what the Governor said as being needed to save America,I recall that we had all of the things he said we must have, when Calvin Coolidge and Herbert Hoover were in the White House, and those things then did not save us from the worst economic disaster in our history. The only observations I made were at the Board meeting, and they were of a political nature^ something along this line, as I recall:- that the people, in my opinion, were fed up with the inadequacies of labor legislation, and particularly with the arrogancies of the self-styled labor leadersj in my judgment,the peoples1 state of mind was somewhat similar to what it was at the tail end of the Prohibition Era, but the authorities in Washington at that time listened to the Wayne Wheelers and the Dr. Cannons, and thought the big noise they made was truly a reflection of the sentiment of the people} now, it appeared to me they had been listening to the Bill Greens, the Phil Murrays, and the John Lewises, with the same conclusion, but that they no more spoke for the people, or, in fact, for their membership ,than did the Cannons and Wheelers of an earlier day, and that, in my opinion,the election returns had demonstrated quite clearly that there was not another victory on the Green - Murray side of the labor question, that that issue, from their point of view, had been squeezed dry of votes. I was a little surprised to find that the Governor agreed with me in this observation — 2— Memorandum and said he had told the President and others in Washington exactly the same thing, but that none of them paid any attention to it. After that I merely listened, I donft know the identifying Federal Reserve Board regulations on credit but they were identified by number and, of course, the bankers were familiar with them. They were doing this country an incalculable injury. What we needed was margin buying on the Stock Exchange. That would save us from $ decline. I find I am repeating myself specifically in what he said generally, above. In any event, the Governor was going to continue his campaign and save America. He seemed to want to turn everything over to enterprise in order that the country could really go to work. I don't recall that any attacks were made on personalities, but the ideas that come from people were assailed with some vigor, and it was not difficult to identify the people who had originated the ideas in the first instance, so that I presume one would say by indirection those personalities were attacked. The Governor complained that there is quite a reach for power in Washington and one just has to keep wrapping knuckles all the time or the "Bnpire Builders" will take everything and gather it into that city. Some of this I did not disagree with.
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