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- JUN 1 0 194/ The President, The White House. Dear Mr. Presidents This is in response to jour MMtmsMUai of J B M 3, 1947* requesting information with respect to (1) legislation affecting the Board of Governors of the Federal Reserve System upon which action should be completed by June 30» 1947, because of the ©xpir&tion of existing authority ou that date, or for other similar reasons, and (2) legislation affecting the Board of Governors on vhich it is urgently necessary that action be completed at this session of the Congress, There is no pending or proposed legislation directly affecting tre Borrd of Governors upon which it is necessary that action be completed by Jvaie 30, 1947, because of the expiration of existing authority on that date* Vith respect to the second category of leg!elation referred to in your memorandum, I should like to call attention to the following pending legislative proposals! 1* An amendment to section 10 of the Federal Reserve Act to permit expenditures for branch bank buildings of the Federal Reserve Banks in excess of the present statutory limit of |25O,OOO. The space situation at certain of the Federal Reserve Bank branches h&s reached an urgent stage. A bill, S. 1225, to repeal the statutory limitation, was introduced in the Senate on May 5, 1947, in accordance T*ith the Board's recoE®ends.tion. As an alternative, if Congress should be unwilling to repeal the limitation, the Board has suggested that It be authorized to approve expenditures for branch buildings of the Federal Reserve Banks, in those cases where the needs are isost pressing, up to an aggregate amount not exceeding $10,000,000, for the cost of the building proper. There is an urgent need for legislation on this subject at this session of Congress. 2. Revision of existing statutory provisions for the purpose of making more effective the authority of the Board of Governors to supervise and regulate bank holding companies* THIS COPY FOR MR. SCCLES - 2 - Legislation for this purpo»<» h&g been strongly HMMMMtt4tt by the Board and is favored by ths Federal Advisory Council, the Association of Reserve City Bankers, and the Independent Bankers Associations, as w$ll &B by the great ssajorlty of the major bank holding companies* A bill, S* S29, on this subject was introduced in the Senate oa March 10, 1947# and & companion bill, H« R* 3351 # *'«s introduced in the Hou«s@ of Representatives on May 6, 194-7. Bearings on S» S29 were held before the Senate Banking &n& Currency Committee on May 26 and June 2, 1947j but no action has jet been t^xan with respect to B, R. 3351* 3» A propoeftl to authorise the Federal Ksseinr** Banks to guarantee loans mde by charter mi banking institution. 8 to business enterprises on a more ©ffectiw basis than the axiatIng industrial loan authority of the Federal Reserve Banks nov contained in section 13b of the Federal Reserve Act* this proposal would G&rxy out a recoram^ndation vsde in your Budget Message for 194Bf by elli&lneti&g the appropriation previously Bade for the industrial io*m operations of the Eeserv® Banks under axieting law, thus releasing to the trmsurj for other ages funds totaling approximately $139*000,000, A bill on this subject, S» 408, was reported favorably by the Senate Benfcinfc &«d Currency Committee on April 28, 1947* k similar bill, I* R» 3268, introduced la th« House of Repraseatatives on April 30f 1947, has been the subject of hearings before the House Banking and Currency GosE<tse# It is important thst this lagislaition be enacted both for the purpose of fiTtag the ReiSNirTetosiksmora effective^ authority to guaraat@# buainesv loans and la ord«r to carry out th© recosassadation made ia your Budget Message* 4. A proposal to authorize the continuance of the authority of lh® Board of Gov@racrS| M * fesed Ml Exeeutive 0rderf to prescribe maxl&nflft ssaturlties end ^inimuis down payments ia connection with the extension of consumer inst&lment ersdit* The Board feels that tills proposal should have the careful consideration of Congress at this session. A bill to carry the proposal into effect h&s been substitted by the Board of Governors to the Banking Find Currency Committees of Congress. In this connection, in your letter to me of June 5$ 1947, vith respect to this SjStt«V| you stated that if the Congress does not see fit to provide the necessary legislative authority, it is your Intention to vacate the Executive Order because you do not believe that such regulations should rest indefinitely in peacetime on emergency or war powers after the Congress has had ample opportunity to consider the subject. The Board of Governors believes that it is important that these proposals be considered and acted upon at the present session of Congress. Respectfully, (Signed) M S. Eccles :. S. Eccles, Chairman. THIS COPY FOR CHAIRMAN ECCLES
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