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December 27, 1958.



Mr. Corcoran



Chairman Eccles

The attached is the copy of the suggestion for the budget message which I just
read to you over the telephone.


December 2£, 1958.
My dear Sir. President:
In accordance with the •ftwrnrorxiili I discussed with
you at Hara Springs with regard to procedure for dealing
with the banking situation, X am enclosing & paragraph that
you aight use as the basis for a reference to this important
subject in your message to Congress,
As I said when I was at Warn Springs, I feel that
it would be a great mistake to present to Congress a bill
to deal with th© better coordination and further strengthening of the banking system which is urgently needed, I feel
that the Board would be remiss if it did not report to
Congress the facts as to the present improved but still
highly unsatisfactory situation. It seems to aie, therefore,
that it is highly desirable to have you suggest to Congress
the desirability of dealing further, as Congress aay see fit,
with the existing problems. X should not like to have any
impression created by your failure to mention the subject
that X had been delinquent in advising you or that there was
a difference of opinion as to whether further steps needed
to be taken at this time, especially in connection with the
termination of the banking holiday.
I would very such like to see you put squarely up
to Congress the responsibility for acting or failing to act
not oaly in improving the present unsatisfactory setup with
respect to Federal banking supervision, but in providing
authority to deal with such emergencies as aay arise in the
future which we are in no position now to cope with adequately.
Respectfully yours,

M. S. Socles,
The Honorable
The President of the United States,
The White House.

Rehabilitation of the American banking systemf
which has been brought about since the declaration of the
bank holiday by Presidential proclamation on March 6, 1955,
has been a notable achievement in which both the Congress
and. the Executive can justly take pride. The proclamation
has remained in effect but, la view of national recovery
and of the great improvement In the condition of our banksf
I feel that it ^ould be appropriate to remove the restrictions of the bank holiday.
In considering the termination of the bank holiday,
I would like to suggest that the Congress, through approoriate committees or through a joint committee specially naraed
for that puroose, undertake a review of Federal banking
statutes and a careful study of our banking system and of
the agencies established by the Federal Government to supervlse and regulate banking.

Such a study will disclose what

additional legislation

• -esirable in order to strengthen

still further the banking system, so that it will bt fortified
as completely as possible to meet changing economic conditions
and to meet adequately the credit needs of commerce, agriculture and industry, while protecting the rights of bank depositors and the oublic interest.