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BOARD OF GOVERNORS
or

THE

FEDERAL RESERVE SYSTEM

Jffice Correspondence
Tn

Chairman Eccleg

Date January 2% 1947
Subject! Silver Purchase Program

lr» Knapp

At 3:30 this afternoon I received a telephone call from Mr.
George Eddy of the Bureau of Monetary Research in the Treasury who informed me that Secretary Snyder, in appearing today before the House
Appropriations Committee, had been asked to state his views on the
silver purchase program, Mr. Snyder replied that he would submit a
statement on this subject within a day or so, and the Treasury staff
is meeting this afternoon to work on this statement. Mr. Eddy called
me to ask for suggestions as to the statement and to ascertain how
you and the Board stood on this matter.
In the brief time at my disposal, I looked into a number of
records, including your testimony at the hearings on the Silver Purchase
Act which were held by the Senate Banking and Currency Committee in
1939*
I then called Mr. Eddy back and reported the following:
(1) that you had consistently opposed the program for
the purchase and monetization of foreign silver;
(2) that the Board of Governors, the Presidents of the
Federal Reserve Banks, and the federal Advisory Council had
unanimously recommended in their report to Congress on December 31, 1940 discontinuance of (a) further monetization of
foreign silver, and (b) the power to issue silver certificates
against the ssigoiaDage on previous purchases of silver; and
(3) that I had every reason to believe that the authors
of this report held the same views as of today.
I told Mr. Eddy, however, that if Secretary Snyder desired to
refer to your views or the views of the Federal Reserve System in his
statement, or otherwise to enlist your support in opposition to the
silver purchase program, he had better get in touch with you directly.
I took the opportunity to give Mr. Eddy a strong statement of
my own reasons for believing that the silver purchase program was a serious
mistake from the outset and that as of today it was a completely unjustifiable
imposition upon this country.
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Mr. Test