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H ie Fkhkt Xm< » al 1 F. P. S W A N . Pres. B E R T H A R R IS , V. PRES. E. D O U T H IT , V. PRES. H . W. C O U R T N E Y , C a s h ie r W. T U C K E R , J r ., A s s t . C a s h ie r CAPITAL & SURPLUS $80 ,000.00 KONAWA, OKLAHOMA December 19, 1947* Mr. Marziner S. Eccles, Chairman Board of Governors, of the Federal Reserve System Washington, D.C* Dear ISr. Eccles: 5 have read with very much interest, your statement, "Before the Banking and Currency Connittee of the House of Representatives” , in tfashingfcbn, in regard to inflationary conditions in oir United States. I think: your report is •very timely, but while you are trying to restrict banks a little closer, and increase their reserve with the Federal Reserve Bank, 1 don't see where this is quite feir to banks, and at the same time the Congress of the United States, appro priate each year, considerable more money for lending agencies of the Government to go in Competition with the banks, and lend a great deal more on the same security as banks would lend, and expect to hold down inflationary prices. For instance, we 1b.ve customers whom we offer to loan 40$ and 50# of the present value of their livestock, vriio don't accept tte loan, and g> right over to a Government Agency, and borrow 100# on the value of their livestock, at a much cheaper rate. Now, it just don't make sense to me, to require ua to place more idle funds with the Federal Reserve Bank, and limit our loans to eligible Fede.-al Reserve Bank Discount require ments, and then use that same idle money through the Government Lending Agencies to loan without any restrictions whatever, with the same people we are trying to loan to, on un eligible note basis. I believe if you will read your bank examiner's reports, you will find the banks are pretty well in line on lending their money an a safe basis. No. 7633 ItaE FlUKT XiTHRVALlliKK F. P. S W A N . PRES. B E R T HA RRI S, V. P re s. E. D O U T H IT , V. PRES. H . W. C O U R T N E Y , C a s h ie r W. T U C K E R , J r ., A s s t . C a s h ie r CAPITAL. & SURPLUS $ 80, 000.00 KONAWA,OKLAHOMA I don’ t see how we can expect to hold d a m inflation* ao long as this condition exists, and if the banks ara not allowed to loan on a safe basis, and at the same time, .pile their reserves up in the Federal Reserve Bank, It seems to rae there should be some restrictions cn the competitive Government Lending Agencies. '.fould like to hear from you along this line, jJr. Regies, as I have never seen any of the higher authorities, suggest to the Congress, that this condition be remedied. Yours very truly, Bert Harris, e-Pr esi dent.. V zo December 30 , 1947* Mr. Bert Harris, Vice President, The First National Bank, Konawa, Oklahoma. Dear Mr. Harris: On behalf of Mr. Eccles, who is spending the holidays in Utah, let me thank you for your letter of December 19 and your comments. You may not have seen the stattfimt which Mr. Eccles presented with regard to the inflationary housing loans stimulated by the Government and I am, therefore, enclosing a copy. As you may be aware, the Board has on a number of occasions emphatically stated its opposition to com petitive Government agencies. It is for this reason that the Board recommended to Congress that its direct lending powers under section 13b of the Federal Reserve Act should be replaced by authority to guarantee in part loans by banks, particularly the smaller banks serving the smaller business and agricultural enterprises. Sincerely yours, Elliott Thurston, Assistant to the Chairman. Enclosure ET:b
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