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February 16, 1940 The F i l e s Mr. C l a y t o n Yesterday afternoon about 4:00 p . a . I received a t e l e phone c a l l f r o a Mr. L. M. G i a n n i n i . He advised t h a t he ana Mr. Cashing had completed a program which they desired to submit on behalf of the bank and had c a l l e d the Treasury f o r an appointment and had been t o l d t h a t Mr. Delano was out of t o r n and would not r e t u r n u n t i l l a t e tommorrow afternoon (meaning today) and t h a t i t would not be possible to see them before Monday. Mr. G i a n n i n i stated f u r t h e r t h a t from a remark Mr. B e l l made over the phone he assumed t h a t the hearing before Dean Bates was being held even though the Bank of America had not made any appearance and he wondered whether the r e a l reason f o r the delay u n t i l Monday or l a t e r was due to the d e s i r e on the p a r t of the Treasury to have the hearings coapleted and the recommendations of Dean Bates i n the Comptroller's hands before seeing Messrs. G i a n n i n i and Cushing a g a i n . At any r a t e Mr. G i a n n i n i stated t h a t he and Mr. Cushing were g r e a t l y upset a t the delay and would l i k e to a s c e r t a i n whether they could not submit the program t o Messrs. Eccles and McKee or whether Mr. Eccles might not telephone Mr. B e l l to see i f a conference could not be arranged before Monday. He f u r t h e r added t h a t i f t h e i r program could be submitted to the Board's r e p r e s e n t a t i v e s and they d i d not wish to have both himself and Mr. Cushing appear, he would be content i f Mr. Cashing should appear alone t o present the program. To a l l of t h i s I r e p l i e d t h a t I would a d v i s e the Chairman of his c a l l and the various n a t t e r s contained i n our conversation and t h a t he would be advised. I r e p o r t e d the foregoing immediately t o the Chairman and he c a l l e d Mr. McKee who had returned f r o a Hew Tork a t 3 i 5 0 p.m. Mr. McKee came t o the Chairman's o f f i c e . The Chairman and M r . McKee i n t h e i r discussion of the matter both agreed t h a t they had expected t h a t a conference would be held e i t h e r today or tommorrow i n the event the bank people were ready w i t h a program and both were displeased a t the reported r e f u s a l of the Treasury and the C o a p t r o l l e r ' s o f f i c e to consider the bank's proposals before Monday, A f t e r considerable discussion Mr. Eccles c a l l e d Mr. B e l l and began the conversation by s t a t i n g t h a t Mr. McKee had j u s t gotten back from Mew York an hour or two before w i t h the e x p e c t a t i o n t h a t a conference on the Bank of America matter e i g h t have been arranged f o r e i t h e r today or tomorrow. In f a c t , ha s a i d , Mr. McKee had The F i l e s - 2 c a l l e d h i a before leaving lew York to see whether he should proceed from the s t a t i o n to the Treasury or come d i r e c t to his o f f i c e . The Chairman stated t h a t he too had expected &n e a r l y conference and asked Mr. B e l l what was planned. Mr. B e l l e v i d e n t l y r e p l i e d t h a t he had already had a c a l l from Mr. Giannini and had advised him t h a t a conference could not be held b e f o r e Monday. The Chairman then, advised him of the Giannini c a l l and request. Mr. B e l l then t o l d the Chairman t h a t counsel had advised t h a t the Treasury and the Comptroller's o f f i c e should not receive or d i s cuss the proposals of the Bank of America u n t i l a f t e r the h e a r ing before Dean Bates had been concluded. The Chairman then t o l d Mr. B e l l a t some l e n g t h the way he and Mr. McKee f e l t about the t u r n of events and t h a t i t was contrary to t h e i r mderstanning t h a t f u r t h e r conferences should be postponed and valuable time l o s t e i t h e r because the Comptroller was out of t o * n or because of the continuance of the hearing before Dean Bates. Be f u r t h e r advised t h a t i f no a t t e n t i o n was given to the bank's proposals tomorrow or Saturday t h a t i t might be the end of next week before any consideration could be given t o the matter as on Monday &nd Tuesday the F e d e r a l Advisory Council was meeting i n Washington and t h a t the members of the Board, and p a r t i c u l a r l y the Chairman, were under the necessity of nee t i n g w i t h then once or twice w h i l e they were i n session; also t h a t Mr. McKee had planned to be i n P i t t s b u r g h on Wednesday and t h a t Thursday was Washington's b i r t h day. The end p o i n t of the Chairman's conversation was t h a t ha thought the bank's proposals should a t l e a s t be received by Mr. B e l l , Mr. McKee and himself and Mr. Crowley, so t h a t they could be studied between now and the f i r s t of next week. To t h i s Mr. B e l l r e p l i e d t h a t he would consider the suggestion and phone the Chairman back. While awaiting Mr. B e l l ' s c a l l Mr. McKee telephoned Mr. Crowley and advised h i a of the s i t u a t i o n , i n c l u d i n g the Chairman's conversation w i t h Mr. B e l l , and suggested t h a t regardless of the Treasury's r e p l y he, Mr. Crowley, j o i n w i t h Mr. Eccles and himself i n a t l e a s t r e c e i v i n g the proposals from the bank. Mr. Crowley r e p l i e d t h a t he was agreeable t o the suggestion and would be subj e c t to c a l l . Following the conversation w i t h Mr. Crowley, Messrs. Eccles ana McKee discussed the question whether the bank's p r o posals should come by messenger or by m a l l , or whether they should permit a r e p r e s e n t a t i v e of the bank t o present the proposals so as t o e x p l a i n the meaning of the v a r i o u s items. They case to the The F i l e s - 5 conclusion t h a t i f the bank people desired, Mr. Cushing be i n v i t e d to present the proposals and make such explanation as seemed necessary without t h e i r discussing the merits of the proposals w i t h him. At t h i s point Mr. McKee returned to his office. About 6:15 Mi^. B e l l c a l l e d Mr. Eccles, advising t h a t the Treasury's counsel s t i l l took the p o s i t i o n t h a t no proposals should be r e c e i v e d b^ the Treasury or the Comptroller u n t i l the completion o f the hearing and Mr. Eccles advised h i a t h a t he and Mr. McKee f e l t t h a t they should consider the proposals w i t h a view of f a c i l i t a t i n g the eventual agreement of a l l concerned upon a pro§Tam as w e l l as to f o r e s t a l l the p o s s i b i l i t y t h a t the Bank of America representatives should f e e l u n j u s t l y t r e a t e d and consequently j u s t i f i e d i n r e t u r n i n g t o the west coast v i t h o u t any f u r t h e r attempt t o come to an agreement. To t h i s Mr. B e l l r e p l i e d t h a t he d i d n ' t wish to advise them (Messrs. Eccles and McKee) what t o do as i t was t h e i r own r e s p o n s i b i l i t y . Mr. Eccles made the r e mark t h a t nothing would be done or said w i t h w h i c h he and Mr. McKee would not be w i l l i n g t o acquaint the Treasury i n advance and he added t h a t a t such time as the proposals were received by h i a and Mr. McKee and Mr. Crowley, no negotiations or agreements would be had without f i r s t advising Mr. B e l l . Following t h i s telephone conversation w i t h Mr. B e l l , Mr. Eccles c a l l e d Mr. G i a n n i n i , advising him t h a t he and Mr. McKee and Mr. Crowley would be a v a i l a b l e a t the Chairman's o f f i c e t o r e ceive the proposals of the bank a t 11*50 tomorrow morning (meaning today) and t h a t i f Mr. Giannini d e s i r e d , i t would be agreeable f o r Mr. Cushing t o present the proposals and make such explanation as seemed d e s i r a b l e a t the t i m e . LC/fgr
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