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BOARD OF GOVERNORS

FEDERAL RESERVE SYSTEM

Office C o r r e s p o n d e n c e
Chairman Eocles
From

Date February n , isue
Subject:

Woodlief Thomas




Friday evening I had a telephone call from
Sherwin Badger, Economist of the New England Mutual Life
Insurance Company, who wanted to be sure that you received
a message from Mr. George W. Smith, President of that
Company and also President of the Association of Life
Insurance Presidents. Mr. Smith wanted to let you know
that the insurance companies agree wholeheartedly with
your statement issued at the time of the increase in
margin requirements and feel that the matter c£ further
expansion in bank credit presents a serious problem.
Mr. Smith is sorry that he did not have an opportunity
to see you Friday to deliver this message in person.
Mr. Smith conferred Friday with the Secretary
of the Treasury. As I understand from Mr. Badger, the
position they are taking is that the level of interest
rates is not as important as the continued expansion of
bank credit*