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'^shmeton Bacforounds
Osy u-v-wiLcoxO

THE FEDERAL RESERVE BOARD is on the spot. Very much so. Its present position
on the ever-higher-interest rate pattern may "be theoretically correct, "but practically and politically it is a lost cause.
The Board's position has nothing sacred about it. It is no part of the
Decalog. No moral principle is involved. To choose another course — to "bend to
the forces of Big Government — is a matter of strategy and expediency. It can "be
one of self-preservation.
Big Government, created by "big debt, is certain to win, as it has always von
in all history. The national debt is like an atomic bomb which cannot "be pushed
around and treated like something ordinary. The normalities just donlt apply.
What would "be tragic— yet possible— is that this Federal Reserve Board
should he so insistent upon its view that it will sign away its own future. Instead
of bending to the power of the political forces that cannot under present conditions
be successfully resisted, it will make a suicidal stand.
Already, it has lined up against it the majority party, the leaders of which
selected every one of its Members. The President grows irritated over its assumption
of omniscience. The Majority Leader of the House makes an unusual address, rejecting
the Board's position. Shrewd Senator Robertson seeks to work out a face-saving
compromise for the Board. A smart political antagonist such as Rep. Wright Patman is
able to advance a position, long held, that the Reserve Banks should be taken over
by the Government.
The minority party has not taken up, and made an issue, of the Board's
position. The issue, moreover, is not one that can be easily popularized. To the
extent that it can be, it involves support for many political liabilities, such
as assured profits for the "big bankers".
Many shrewd bankers, remembering other days, would like to avoid the kind of
political fights that will stir up radical labor agitators and make the broader
issues of economy in Government and elimination of socialistic experiments harder
to hold in check.
The bankers of the nation would like to preserve their Federal Reserve
System— a profitable thing to control. They would like to avoid a brawl in the
sawdust of politics. They would like to work with Government and not against
Government. They have tried the latter and neither the experience nor the memory
is pleasant.
Will the Federal Reserve Board choose to go to the stake in a bright blaze
that will delight all the enemies of the capitalistic system and leave only
blackness afterwards?
A cynic, it can be remembered, once commented about the usefulness of a
dead lion!



Albee Building

Washington 5, D. C.