View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.




PATtNovember 16, 1934•
To Mr. Eccles

Mr. Edmiston
Re: Comments and suggestions about relations of
the Federal Reserve Council to the Board.
I do not think that it is worth while for the Board to enter into

a controversy with the Council about what subjects the Council may
legitimately discuss or make recommendations upon. Howeverf I do think
that the subjects which the Council contemplates making statements about
should be discussed at their meetings so that there will be full interchange of views between members of the Council and the Board.
The question of publicity however should be discussed at the next
meeting* Three lines of approach might be considered by the Board in
this connection.

1. The Board might continue to permit the Council to make statements and circularize these statements to all member banks with
no comments at all by the Board. This would give the Council
complete freedom of expression of its views without embroiling
the Board in any controversy wit!* the Council.
2. The Board, it seems to me, hasrthe power under the law to

request that the Council address its recommendations only to the
Board with no circularijsation or publicity. The Board could then
simply publish the recommendations in its annual report and in
this way such recommendations would be effectively shelved, while
at the same time there could be no effective charge that the recom-

- 2 mendations of the Council were not considered by the Board and
were not given appropriate recognition in the annual reports*
3. The Board and the Council might issue a joint statement.
The recommendations of the Council would be presented,followed
by the Board's statement on them*

This course has a danger in

that it might lead to adverse publicity and might engross the
Board in needless controversy*

On the other hand, however, the

Council might under these circumstances be much less free to
make sweeping generalizations without support,because it knows
that the Board is going to carefully comment on and criticize
such statements* More harmonious relations might result from
this course of action*
This whole question goes back to whether or not the Board should
change the policy it has been following in the recent past of cloaking its activities with great secrecy* The Board might well consider
whether or not greater publicity should be given to its actions with
current surveys of the general business situation and an explanation
of the action taken by the Board to meet the conditions as it seea