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- AS

In t erms of the preceding statements of Patman, and the k n o w n views of
Murphy, this report might be taken as a m o d e l of reasonableness.

In fact

i is pretty reasonable, and I would say the m a k e u p of the Committee, and
the fact which b e c a m e quickly apparent that the P a t m a n line w a s a minority
one and an unpopular one, wa s effective particularly in an election year.
M a y be suspicious, but despite this appearance of reason there is also a
subtle attempt to play d o w n the effectiveness of m o n e t a r y policy, and to
attribute to restrictive m o n e t a r y policy incompatibility with the E m p l o y m e n t
Act of 1946, even while seeming to concede - in generalities - that m o n e t a r y
policy should be one of the principal m e a n s of achieving economic stability.
That I think is what bothers Senator Douglas0
There is also a defense of Presidential intervention in credit policy matters,
in t e r m s of consultation and persuasion*

In the hands of the White House

group that too easily b e c o m e s an attempt to direct and dictate.
In its treatment of the Treasury w h e n i discusses the pre- and post-Korea
situation, the report s e e m s to m e to be soft to the point of bias.


It talks about maintaining confidence in G o v e r n m e n t securities
as if that were the s a m e thing as maintaining fixed prices and


I says during m o s t of the period the differences between the
Treasury and the System w e r e very small as seen from the
outside and were concerned primarily with short term rates
of interest*

That reduces the differences to absurdity - w h e n

the real point at issue wa s whether w e would have a monetary
policy or not - whether the Federal Reserve System wa s to do
its real job or peg prices for G o v e r n m e n t securities.



It glosses over the actions of the Secretary of the Treasury,
and the misleading statements he m a d e concerning t h e m
in his answer to question 17 of his questionnaire.


c o m m e n t e d on this in m y testimony but it got lost in the
shuffle and has never had m u c h attention0
M o n e t a r y council without a mandate from Congress such as Douglas C o m m i t t e e
advocated, dangerous for Federal Reserve System;

wholly undesirable to have

i set up by Executive Order and under chairmanship of C h a i r m a n of Council
of E c o n o m i c Advisers, a discredited body in t erms of objectivity.
Budget and Audit sound reasonable but look like getting c a m e l ’ head under
the tent.

In absence of any evidence of failure of present budgeting and

audit procedures, look at these proposals askance.
Labor m e m b e r s - what w e d o n ’ want is m e m b e r s of B oard of Governors or
Board of Directors of banks representing and acting as a pressure point for one
segment of the c o m m u n i t y „ Have no objection,

in principle, to labor on boards,

but their record as militant class interest advocates is bad*
Perhaps in t e r m s of our adversaries thing they accomplished is to get this
report on the record as the latest word, superseding Douglas Commi t t e e

Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102