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Please deliver to:

Elliott Thurston

Arthur R. Upgren

Remarks i I might add that my rather
strong feelings which prompted my earlier
letter are such that I certainly have no
hesitancy saying what I said in the attached
at any time or any place.


March SI, 1947

Memorandum on Governor Vardaman's Visit
to Minneapolis Federal Reserve Bank
At the very delightful luncheon tendered by President Peyton to
a group of twenty or so, including l o c a l members of the "board of the'
Minneapolis Federal Reserve Bank, President Peyton "briefly introduced
Mr. Vardaman. He pointed out t h a t he was out on a t r i p learning about the
country and the system of which he was a p a r t . The introduction was
straight-forward and s h o r t .
Governor Vardaman opened with some general remarks, including the
fact t h a t he had recently made some speech a t e i t h e r Norfolk, Newport-News
or some other convention point in Virginia, and that he would apologize
because h i s brief remarks today would be along the same l i n e . There was
some l i t t l e implication that h i s remarks had been quoted i n extenso and
that we should know about them. I t was clear that some adverse statement
had been made about them which he was trying to defend.
He then pointed out t h a t he was in a p e c u l i a r p o s i t i o n , that he
spoke only for himself, though he was a member of the Board. He mentioned
that Governor Eccles knew of h i s v i s i t around and h i s independence in
speaking. In these ways he was trying to convey, and there wasn't a great
deal of subtlety in h i s procedure, that a defender of the free enterprise
system was out "on expedition."
There was quite a l i t t l e discussion by him of the free e n t e r p r i s e system and the many fine things i t had done for him. This discussion
was c l e a r l y in opposition to planning and a l l planners.
Then there was some discussion of recommendation in government,
p a r t i c u l a r l y of the bureaucrats. These bureaucrats got a l l the cliches in
Mississippi drawl and the speaker obviously thoiaght he was rapidly ringing
the b e l l or h i t t i n g the t a r g e t . Later, in the questioning, t h i s p a r t of
h i s speech e l i c i t e d queries about different bureaucratic agencies. I
remember most d i s t i n c t l y how a t l e a s t four or five were named — RFC, FDIC,
CCC and one or two others — and each was given fullsome p r a i s e by the
speaker. He never even realized that these are bureaucratic agencies. In
f a c t , obviously h i s definition of a bureaucrat was someone in Washington
who wasn't doing what he l i k e d .
There was no mention that I can now r e c a l l of Chairman Secies
beyond pointing out t h a t he was speaking as a person, and some others t h a t
indicated he abided by the decisions of the Board, though h i s remarks
were impliedly at variance with the Board's p o s i t i o n .
There was only a vague reference to the independence of h i s "expedition" from any o f f i c i a l nature whatsoever. Thus, the l i s t e n i n g group
was disarmed, of course, but the curious thing was nothing in the speech
was worth a l l t h i s trouble of disarming the audience. I am under the im-

- 2

pression that other than his speech at some convention — the one I
have referred to above — that this was about his second foray outside of Washington. Thus, there was subtlety in his remarks•
But his main objective was abundantly clear, though it was
not advanced very much. It was an appeal to "those who believe in free
initiative, free enterprise, a free banking system and a nation free of
bureaucrats, and free of axiy kind of planning." That appeal seemed
like one in which he was feeling out where support for different
policies might be found and hoping he could cultivate it.
I end with the judgment, all which may be too severe — that
the performance was the poorest, the least objective and bordered on
utter incompetence. Thus, subversive innuendos were mostly ineffective
because of the utter incompetence of the man himself.

—Arthur R. Upgren

Note: The foregoing was dictated and corrected before reading of an
additional report, and I make the following notes of reconciliation of
my views with the report of another meeting, I continue with comments in
light of the Atlanta memorandum.
The main differences here are that I did not hear of anything
about whipping up the country, but there was comment how every view
should have a hearing in Washington. That the Board could strangle
business he agreed, and he appealed for support anywhere by such things
as applying opposition to the one hundred per cent margin requirements and
opposition to regulation "W".
I heard no personal attack on the Chairman, but the meeting was
one that with university presidents and professors present that would have
been bad taste, indeed, and even the gentleman himself could understand
that. Thus the use of the word "subtlety" in my memo,

—iBU <