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C. R. B E t L .
PRESIDENT
E.G. POTTER.
CASHIER
LUCY F ROBERTS. ASS'T. CASHIER

LA. STANLEY.
VICE PRESIDENT
S.J. YEOMAN. ASST.VICE PRESIDENT
E. H.HASLAM.
ASST. CASH I E R

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THE COMMERCIAL NATIONAL BANK
of

CZTJnniiton

A N N I S T O N .

A L A B A M A

December 3, 1947

Mr. M. S. Eccles, Chairman
Board of Governors Federal Reserve System
Washington, D. C.
,.y
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Mr. Secies:

This acknowledges receipt of your letter of
November 28th addressed to the Banks with a copy of the
Economic Report made by you to the Joint Committee of
the Congress,
I have been very much pleased at your attitude
in regard to putting in some controls on this inflationary
bank credit expansion.
Enclosed you will please find copy of letter to
Mr. Cravens, Chairman of the Credit Policy Committee of the
American Bankers Association. I have been very much surprised
at the attitude of this Committee, as I do not believe that
l r Cravens and his Committee are reflecting the opinion of
f«
the majority of the banks of this country. I am sure this is
true as far as the smaller banks are concerned.

Sincere!

Fresiden4-..
CRB:1EW

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Commercial National Bank
AimiKtuii. Alabama

Decesfcer 1, 1947
Hon. Kenneth li. Cravens* Vice President
Mercantile-Commerce Bank & Trust Company
St. Louis, Missouri
my dear Mr* Cravenst
I note in the American Banker of November 25th
ov. have been quoted as saying that Consumer Credit Control by the
Government would be detrimental to people in the lower income bracket,
to business, to banks and to the Government Itself*
As you are a member of the Credit Policy Committee
of the American Bankers Association* I assume you are speaking for
your Committee, as well as for the bankers* as a whole.
Tour statement came very much as a surprise to me,
as all of the bankers in Alabama that we have contacted appear to be
very much in favor of Regulation W. In fact, regretted that it had ever
been removed. We believe this would be the opinion of the vast majority of the country banks*
If we only had to meet the competition of bankers,
it would probably not be necessary to have controls, but, unfortunately,
we are up against other competitors, whose credit policy is much more
liberal than bankers* With the wild, reckless purchasing, which is being
done by so many of the laboring people at present, it would be a bless*
ing for them to be protected by some controls*
We are very much surprised at your statement that
the liberal credit policy now in effect is not contributing to inflation.
I do not know just how Intimate your connection is with individuals
actually making these installment purchases* but we see evidence every
day of its operation and know that this tremendous purchasing power is
contributing in a very large way to inflation.
Personally, the writer is rmry much opposed to regimentation, but if something is not done to control this installment buying, such as Reflation i, thereby cutting down the demand for merchandise
of all kinds, we are certainly headed for trouble* You state it would
encourage people to cash .their Government Savings Bonds. Don*t you think
it would be a very fine a £ & Q n Q . f \ i t could stop this reckless purchas
ing, as many of them woulanprireT t o % o without rather than seeling their
http://fraser.stlouisfed.org/
bonds ?
Federal Reserve Bank of St. Louis

Commercial National Bank
Anniston, Alabama

#2
Hon. Kenneth R. Cravens

You state It may be possible to cite isolation, in
which some marginal lenders hare extended terms that a bank would
not grant, but in most cases they represent the outer fringe of installment lenders. We have already begun to see some evidence of this and
if competition increases, you will see ouch more, until finally there
will be a scramble for this business upon a very unfavorable business
basis. You might say, that banks could stop and not accept business of
this kind, but, unfortunately, it is not quite so easy as this, as
naturally banks want this very profitable business, but if other agencies
begin to extend unsound credit, it is very difficult to get this business
upon any other basis than the terms which will be offered by other credit
agencies.
We hope your Committee will give further study to this
matter and approve the program of President Truman and Mr. Eccles •

Sincerely yours,

C. R. Bell
President.
CRBtW




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