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October 20, 1942

Dear Sir:
I am enclosing to you a copy of the minutes of the
first meeting of the Board of Economic Stabilization.

Sincerely yours,

Honorable Marriner S.\£cyles
Chairman, Board of Governors of
the Federal Reserve System
Washington, D. C.



Economic Stabilization Board held its fir t meeting
in. "the Conference Room of the East Wing of the White House at 2x30 p.m.
on Friday, October 16, 1942, with the Director presiding*
Present were the following!
Mr, Bell (Acting Secretary of the Treasury), Mr* Wickard,
Mr, Jones, Misa Perkins, Mr. Henderson, Mr. Davis, Mr. Eccies, Mr. Murray,
Mr, Robert J. Watt (representing Mr. William Green), Mr. 0!Keal, Mr* Patton,
Mr. Flanders, Mr, Johnston, and Mr* Lubin (Economic Advisor to the President)
the Director made a brief ctaxement to the Board, outlining his
conception of ltf functions* He & . . o reported on the measures which he
had taken and ishich he contemplated for the neto* future* A copy of the
Director1^ statement is attached.
The Director requested the head of each department or agency
represented on the Board to prepare, before the next meeting a memorandum
with respect to the part played ty his particular departaent or agency in
the total stabilization program, including a statement of measures under
consideration which are designed to assist in effectuating the policies
of Executive Order 9250. The Director and several of the other members
of the Bo&rd expre.-i-jed the opinion that the relationship between economic
stabilization and the national manpower policy was so close that it would
be desirable to invite Chairman McMutt of the War Manpower C O M 1 M 1 # & to
attend the next meeting of the Board for a discussion of this problem,
Hie Director also invited the public members of the Board to
present memoranda as soon as convenient outlining their suggestions as
to the most effective metiioda for achieving economic stabilisation and
a fair distribution of the economic burdens of the war.
The Director announced that future meetings would b© held on
.alternate Thursday;., at 2*30 p* m.y unless an emergency meeting of the
President*3 Cabinet required postponement until Friday. Hi© Director
further requested, and all the members present agreed, that only the
members of the Board UiWM<1 lii should attend the mee tings j and in the
ease of necesaary absences, that alternates should not be sent. It was
agreed, however, that in ca e of the absence from Washington of any one
of the heads of any of the regular governnent departments, the acting
head of such department would be permitted to attend.
The Director announced hlfl intention, with the agreement of
the National War Labor Board, to place the control of farm wages under
the Department of Agriculture. All the members present agreed that this
step was desirable.

- 2 -

Mr. Murray commented upon the Director's reference to the
desirability of close liaison between the Office of Price Administration
and the War Labor Board, stating his hope that this would not lead to waga matters by the Office of Price Administration,
Mr. Henderson, in reply, it&ted that he did not think it was
the function of the Office of Price Administration to act as advocate
before the War Labor Board, either in favor of or in opposition to wage
increases. His sole function, Mr. Henderson stated further, was to advise
the Director whether any particular wage increase would necessitate a
change in price ceiling3. This duty is imposed upon the Price Administrator by Executive Order 92f>0. This, Mr. Henderson stated, is a p. rely
factual determination, and does not involve any expression of judgment on
his part as to the desirability of either granting or denying any particular wage increase*
Mr. Davis expressed general agreement with Mr. Henderson's remarks but stressed the quantitative factor in all factual determinations.
For example, Mr. Davis said, a small wage increase might not necessitate
any change in price ceilings, whereas a larger increase would force such
a change$ and it would be desirable for the Rational War Labor Board to
have possession of all the fact:: before making its determinations.
Naturally, Mr. Davis further stated, the Board would welcome such facts
from any source, but would retain full independence in the exercise of
Mr. Murray stated that in the past subordinate officials of the
Office of Price Administration had disrupted collective bargaining re*
iationships between employers and organized workers, and expressed apprehension lest the independence of the War Labor Board 3hould be impaired.
Mr. Watt suggested that the War Labor Board and the Office of Price Administration prepare a statement as to the details of the proposed liaison
arrangements and submit it at the next meeting of the Board.
Uae Director then requested the various members of the Board to
bring up any suggestions U to procedure or as to problems which they felt
the Board should consider. Many of the members expressed the opinion that
the relationship between economic .-stabilization and the national manpower
program as the most pressing problem now in evidence, and that it 3hom3.d
be given immediate consideration. Miss Perkins, while not in disagreement
with these views, warned against flooding the War Manpower Commission with
a surfeit of advice,
Mr. Bell, Mr. Jones, and Mr. Henderson suggested the desirability
of submitting agenda to the members of the Board ad far in advance of the
meetings a3 possible, 30 that the heads of the various departments and
agencies could consult with their technical staffs in preparation for the

discussions. Mr. Patten strayed the desirability of anticipating those
problems which would be crucial six months or a year from the present, so
that the Director and the Board would not be overtaken by too many
At 4-130 the Board adjourned to meet again on Thursday, October 30.