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December 12, 1940. Memorandum to Mr. Eccles arid Mr. McKee: Mr. I r a Clerk, of San Francisco, called on the long d i s tance telephone and talked to Mr. Dreibelbis and me j o i n t l y with the request that I take down the following statement and pass i t on to you. Mr. Clerk said: " I would very much appreciate i t i f you would inform Chairman Eccles and Governor McKee that on Wednesday, December 11, the Committee on Bank of America Premises met at the Bank of America with Mario Giannini and 0. K. Gushing to discuss the findings of the committee. As was to be assumed, i t immediately became apparent that there were differences of opinion as to how paragraph 5 of the Agreement should be interpreted. After Mr. Gushing had given his understanding of the Agreement, both our representative, Mr. West, and Chief Examiner Wright stated that Mr. Cushing1 s views were identical with those expressed by me from time to time but that Mr. Yfest and Mr. Wright were unable to come to the same conclusion. I should add that I was not present at that meeting. As a result of this conference, Mr. Gushing telegraphed Preston Delano, stating that one member of the Committee understands the amount to be fixed under the terms of the Agreement at cost and that two members understand that the amount should be their e s t i mate of the value. Telegraphic advice as to Mr. Delano's understanding was requested by Mr. Gushing. Now you probably know that on November 22, 1940, the SEC issued two orders for hearings, File No. 1 - 2964, which are i n substitution for and supersede a l l other orders. As the question of valuation of properties remains i n the complaint, the Committee would be rendering a useful service to the bank by concluding i t s findings without delay. lou can readily understand that the bank must be anxious to be able to say i n a l l these matters that they can say under the plan that they are settled—that there i s no more controversy regarding them. I just for the l i f e of me can't understand how this misunderstanding continues. I wrote a letter the other day to Governor McKee i n which I said that I believed that the trouble i s with the subordinate members of the Comptroller's staff forgetting the understandings Mr. Dreibelbis and the rest of us reached regarding that paragraph i n Washington. I also emphasized i n that letter that I had had discussions here with Preston Delano, from which i t appeared that i n particular cases there was no misunderstanding between Mr. Delano and myself regarding that Agreement. When Mr. Eccles was here, I - 2 - thought i t was an opportune time for Mr. West to interrogate Mr. Eccles regarding i t and Mr. Eccles confirmed my understanding about the Agreement. The only two that I have not discussed the question with are Mr. Bell and Mr. Crowley, as I didn't think that anything could be accomplished by ray attempting to discuss i t with them." After some further conversation between Mr. Clerk, Mr. Dreibelbis and myself, I advised Mr. Clerk that I would report the foregoing as promptly as possible to Chairman Eccles and Governor McKee, f i r s t having called attention to the fact that Governor McKee i s not here today, which Mr. Clerk had already learned. Secretary.