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Form V. K. 131 BOARD OF GOVERNORS FEDERAL RESERVE f ^ f i c e To From SYSTEM C o r r e s p o n d e n c e Chairman Eccles Date ^ 21, 191a Subject: Mr. Dreibelhi s r Assistant General. Counsel When you appeared i n 1937 i n connection with the extension of t h i s authority and on other occasions, Congressman Patman has p e r s i s t e n t l y asked you "why the Board has not established a r a t e of i n t e r e s t t o be charged Federal Reserve Banks on the uncovered portion of Federal Reserve notes outstanding as provided i n section 16 of the Federal Reserve A c t . I t i s l e s s clear that t h i s question would not be germane than i s the le cas< case with respect t o some of the other questions which hi might press• One answer t o such a question i s that the l e g i s l a t i v e h i s t o r y c l e a r l y indicates that the p r o v i s i o n was designed t o implement the Board i n encouraging the retirement of Federal Reserve notes whenever they became redundant arid that i t has always been so i n t e r p r e t e d . A memorandum prepared i n 193^ on t h i s subject also s e t t i n g out c o l l o q u i e s between you and Congressman Patman i s attached. Attachment
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