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BSr« Haalin
Mr, Thurstoo
Mr. Clayton
Burr
The a t t a c h e d ftBTWUlllta r<
i r l t t « 0 BJ ft Bli
sf? and a r e $ff«r*6 to ;:ro-:i MI Ll^ht reading over
J u l j 20i I
T*-] ; ILfcAi M TO FIP1EAL RESF-Bfl IS
THS LIGHT 0:
Senator SLsjtf «.
I I •
KM failed to .Icmrr. three f t a 4 e a e a t a l
facts? rxbaut th« F«jdersl B«$&nre Syst^a «hieli *er*- s o t c l e a r s t the t i a e
M t MM •asaee' I .--- it M
ag W P M l l s t l e *
. i V.etr ijey>—ib to Federal Reserve prob-
H M f i r s t i; ; ttiat • : o i l a r bi0r<BM4 fJTCB i f e d e r a l 1»»
b a s i s of bans t r e d l t of w m r f t l t l a e e ti- i t
bank a&^ becosie th
Mioatf i s fet U M Unit H M pfgyusen fov H d A • piaot of PH
bMB i n n bttM no ytli%lwnh1|i to IIM
o f the rmiiscotint ar© put.
IO itiidi OM
The third I s th«t ^5ie elMttlSitj] i f t o f i e u e y dU
not teptad o^ thv BAIWNI ef MM {M^MT M^AK of fidtarid is#MTfi s o t t S t
MM between a Fe4eral Reiserve bajtis; dol
:
;
s from HM fSM^i that tr.l: M B t V J 1 ! |M0| i I
k rattier than Uniigti ttie payaeat ei i i
ifi of dollars*
•
i in c^«b there sooXd bi
i f tfct public ^.©edeo aore
ii
vi fiNHi ttit faet
. e .are required to iceep ®e r«eterves
a l l piajmcants w«r
sbar
largely
! i s««
fraction of t'fcfdfc d s y e i t s «
a differease e*tWMfl tht too
inrwn of payaemtt i t m t i l hse*»
fr<>29 th«? b^i;<e aund its* bain •* »oyl«i have to give i t Federal Be serve riote»«
IQ order to obtfein th« Federal ResenW' notes th«
BrdiAeriljT b«M to
borrow frosa the ateaber feitakg, possibly aoittf tht e r i f i a a l boxrevers 1 pi*psr as
li; tf borrowing*
Ih^a the origimal borrower pa|4 back hit Loaaf trie
er bank; would b« la | w 4 i
I Kj? bail MM Federal Reserve ho&k$ u
acy s&ight conceivably b^ retired .
quiv&lent 'mmmt*
ea work®.
That Is the »ft?; Senator Gl^ns thinkn f"'
But t h a t I i s o t HM wgr I t •orks in r e a l i t y *
•• borrzt
ti at
:
I-. rj 1 *.! F^aojPM
lihat happena i s
thftt If a bunk i s loaned tip, |MUI Mini In effect Ikftt l l bM no
the F#e#rml Kegerre b&nsv HMHi the l&® requires^ and If I I created
^l deposit^ the biK>kp or sore aamupatily thf entire tanking ey©t»s
NlfMM from HH Reserve baftkj r.-at tafl W l
i f t; • •
• W%%$ b i t
ugh to furnish the •ftlill*—1 l i m n r*^ulr«d to pa
posit*
irt liMi adit**
t i otl-^cr »ordii, the banking ©ysta-s s-usji barrow ffWttMNd*
anks os ti;
It
no
tep«ttlt9«
This VfMirti UM t
k nwiit*
a«rehant borr^we &
if i
Contrary to
redinc^ ml
fros s. ase^tjer bank aad the ••m-i&kmr
t!
with MM Ftd©ral iMMVfl bMUCf t^e r«?fte.rve si
.1
tltl bv thi# operatic?^, as^ou^ting to & tha I ;.;lac#5 Iftte BM not. • t :
-ll&rs
I
vifb t h t Federal Ej&s#rve bask ftfWr piiiiin
I
:. : , : : . •
»0
• • reasrv* ereat«<3
;
ftfi
Mi la tlui «id « i i i
QMfl i«t IbfJkl'i | I r»*l dl«tiaeti*J
- "k dollar «Afl P -.-eaber ban dolX«n
ft
idt BV»il«bX«
olltrtf la ^r •
bat abaai fiftMa tliwi that liaoustj because th«
de;>cj5itj,
!^«rcH*«t** m
1
U e * i s fr;j%*rf"il :iii th<> -aosibfir bank dollar*
b© fc*f& l a aiad sasiitiwir I b i (tttetrtlec
tar ii
T^i« d i s t i n c t Ion
1
.•>.-.
,
^
• l e w%&®r ccnsidermtlMU
BH Mttari ataoflnoipMwi i i ol—tly
n • t r « t a m t t s c o t e for • thoai .
it«d le Ui
1 ix
F o i t r a l Kaaarr^ bank beco>sc^ the ^eii : :
itftftlf I i PtffflUfflalt f o r only thv f i r # i fcl •
aar $14.f0Q0 oovldl be t n t t t a d Ibaraai
lfat«
i t ii
ilw
rf
Mat
il H NMI se<
1 Ul if I
t r ICUM
•
fchat
• ••> 1
U M ooti
UIA1 the
Una c>r lttfattastit»
m
m. J **
But wzM if UM • • l t i j
t «xj
w i l d a t i l l hi antoaalAa*
• to*
i
aot prvfBllj HM CUUM B—otptioa
t b « n l i M fi
htvi & tlim—nfl doll trs? to l«ad oo I
Mgf Ig firtiiro
I Ittsl • ic<-.
|1
tuurk«t Male a#*d to
. broker1'& lo&a, rhich It Mold
•:
,
;o
r » a w i i*gf It could ii«ft borroi trv rsoa^y ©ttJier o?i i collfttand ••%•
e-
• n$ f T i l l O i l t l i j
Bl«li or Uwhuti
i
'
^ ^ r la Ita port/olio ini QMB UM th« t.
It cAteiM for m j
«
UMNrt or Q
| T r^dise&imtlwg oa^Ki©reialt
i
;
.
i
.
.
.
. • .
. ,;,.
Ihftt Is f i f t e e n
•
MMTVI te&kfl i t * p La MWi 011,7. ! •
I PMSTVM t f twd
IM
w
** ' :"
Tte ftmds obtain*
of wtottttlc w|>initi
At
•• I r t •
t t. « i Ml ! • • ^t U
. - t onlj
.
". I
*e1
i
wifir
1
1
abtaSj
BUdori os credit*
The
QMitfmetioQ Ucioer th^- F<w4wal Resenre of
la %aich B«Mtav Olaj •
I
I 1 ^pWtod UMKUHt Of iddltiQAal
tel Hi 1 ilifl create * iMdi ftMi -• -lit'.- Hi I
1
.'" •
:
U
. ..ndf? art^ pot*
i, ti"«c ss&^b^r b&nk i^sgariilssa ©I th« a i y r a
ri1'-.. ^ - '.,* I'
i
I I — • M Iftffgi M ttn o r i g i n a l htMnrovli |«
*>r tor', , * * L^ t',t.»i
ntotloal 0 m i i i o a *
;
.-. Im'fijwm
I ! • Ira
:• l t i
lilifOt r 0
infi::?It^iy MT« tflM f o r U M MUMH
ol
,
,:;D u.at VMB >ltbc L1 Ito sol'tlplc e
m i i i i i m%#«
• • R«««rTe b
.
li&i 011
La qtaftfttlon t i n •:
bfl »« sllreet >P>latlOi bete:
sir-
• , .
I t ^ould be irsr^- dlffioult for tfat Fwdsrial Re©er7«
tr?:. a^cttotJj w^wif UMI I
l#aq
I
- bcaki
o ^v t i t
• AThe t h i r d l l i W H i
:
U
•
of tefe Federal Ee?3#rw Syutes i s tbj
t - , v'»l-«ttf"C'
re^ey*
i
I
Tfciij M l l w i
\ • .
'
is a
--TV
7<-U«r 3 !-?'£;€• v*
Vbrni thj
id hfcn i
e»and f o r
borrowin< in cape e5
h h&« r»c«v \'.
••
r#3
S;
-
euJT©^cy l a b e i n g hc-ai^ed feec&us^ •••£ •• - •
t a a t i o B « l a CNonrwMiy d * m
•-
I the e a r -
-.:
t n 1.- •. T o l u ^ f
:• r e t a i l tVttAl *
M
o f cnrr«
9&
Ibi w > n « t i
-.-.•. J
:
•;
^
'"IJ 1 "
' tx°®m
N
mn'
;
Start
• -i--
MM
:
;
fl-^c-
L i t t l e la*-
I
•
te
h*
. .
•
;
.
cmtir^l^r iJUTf«rtRi
•
*
• I
I
i v
I t La r#cM
ituT 0 M H ?>'
1 w%*' "tbit Ibi gv
MtyMKti l i
that c >rr:
5 b; e ^ c
:
It IXM r^sts oo Vv tm&i *
:
i s n c v : •• >• to
i,
;v
i f u l e - ' c * l a tttf b n - - - r ,
I X Ln 0 w
of our WW'«tic,; • e-».
aw
M bor-
HH f««t U tkal • ':«.-; t ftnr 1 I—g-tiaw ;';
£»
0 1
:
relatd
CIOB*
Lolty rvffti
eusrre-nej a r i s e ft KM co-.:e
il
''*•'•'-.
CK;.-'-
1
&n 1
Ihae i t
l a o<
plover: •
I
un bo gun
! -r th« daj->to<»d«]r I n
S^HM
5
• , - :.
oostlj
.
ratail
fcbat
kra^ii ww f a r a » |
,
•:..
I
It
•.•.-. r^r
M •
L l da*-
poait#d a t tbt IM ifegj wwapt *fe«weth©r« i s & lack c
,
«
; :
- I
,~ •••
-.
liTl
r.
hi r i i
of 1
.
-
,
.
ill
•
• . »•
•
• : • * • ' /
•.-ity of gar aunvaejy t erefor^i •> • nay i r y s&noi . Um l a oar s&d •.
. .
la aa advaatag^i Is k%%pts\ out aon ihaa Li
facility far issalng s-.ll tii?it 1
itcU
I
i
a#ai p
Ij arily 1 i n
.' v t V crs I - &:§$
J
In th« rinal
t i c i t / of oor aarrwMgr r e s t s oa UM » «
'
i faat thai
on the fae1 t it the Federal Jtesft-rv^ h^f^n are ••ilsav^ l a a >0@iiiot) to :
'-:- . • • • . ! a ^ r r -v.y «h«>a
•^i1
.
• laa si* ' dlffieultiai our syst
loollftt^rAl **qlmkt»
lut0tf*rrm
1931 • - £i,rl; r 1932 a**« Rl fci
Act*
Thro : r ; : ••ut o a r p # r l c
"L
i
f«rloull
usd mtirnwnt of stt
iith
K i | »; i » riat policj La
lUtfillaii b / I
rr^
Q1 i f i Jttttfii 1
IOJT
HM vMffiHMgr •/•%— M4 Ribjaetad to • t e r r i f i c tt?mlftf partlwalarlj
in !}JJ Mbti |2 f 000 f 000 9 000 »f er;..:-.? Mill t l
the c o m e r i ,.
v<
:
i in fOld9 MM vlt] -
,':...
• wor« r
In the s a t t c r ••.<r c u r r i o y ttw Fadaral iatftvfi h
ia tin potltloB th*t Daaator Qlasi r l r o a l l n
turo »11 .
molt 6
Sa t h i i f l i
i
—
flas HM
i MM j-n faat about
'
i MT
• a fji r*quir»d and UM p • i raaliiart i l l asaaai aaal .
.•••.'•
a a n wi*iv«, i
Saaatoi
i l a » t w o d d havt
v
;&*: I t i l l map«ota<
UM
I i a i l iaj»Mrfrt«
t h a t t h l « U a a l j I i SA< I
ba»
» « Its
I
•/
fell
itai
:. KtoOf :'
; c4, t , . + ! * r ac
: .* • of r v a H a a «
II
• :•' m ; ! •
Mtal !^eMPT*
eonspleaotia
aong U M teffttti la oar flat • I I srg&alf&tloq
if tr. Pftdttr&l Keaerve iiyit i«
TfcMM &tffi€ttl1
. problim • ! greater coaplaxltj to
ol UM fwoerul J f i i T f 8ji l i
• :-
METJ
i
I
ft N t
rt hacM (HrlMtt*
It graj if wit
so i t MHH rv!.•• pri»ei -.aly, tiol i • I
futtfltiiflP| bat
-. at
i v^t^bliiu:^
mm
It li
: , MM)
11M I^HMH
• rofeicaSj aacl la
get* ta«aiB4 RSI auti«M(f*
~ce til flttiitr
M
@FedFRASER