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H ie Fkhkt Xm< » al 1
F. P. S W A N . 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

$80 ,000.00


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
, 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 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

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

$ 80, 000.00


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.