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January Seventh 1952 Bear Hr. Flchtner: 1&»re lias never been a ©oa©Bt in which I a±dn*t feel atrrogly that the Federal Re serve Syateei should taaintain its independ ence from domination by the Federal Governx m n t. I think that when the testimny is all in that you will £ lx *& that this has been position. We oust not lose sight of the fact, however, that the Treasury Department has the responsibility of mnagiag a huge debt and taust rely heavily upon cooperation free the Federal Ee&erve System in cars^riag out those respomiMlities * I oust confess that I believe the last paragraph of your statement requires con siderable analysis before being accepted ms written, for we must fece the fact that our entire fiaeal plcturo is entirely differ ent than it waa at the ttae the Federal Reserve was created ai^d the Federal Beeerve Act revised la the 1930fs* Wars good wishes, Sincerely, [Signed] JCHI4 Hr* Charles C* Flehtaer Executive Vice President Buffalo Chamber of C&merce Buffalo, llew ifork Si»li/iia lO h x ffn la (S lfy m x k tt xti (S h tm xu ttxx O f f ic e o f E x e c u t i v e V i c e -P r e s i d e n t December 27, 1951 The Honorable John W. Snyder Secretary of the Treasury Washington, D. C. Dear Secretary Snyder: The enclosed statement relating to the independence of the Federal Reserve System was adopted by the Board of Directors of the Buffalo Chamber of Commence at its December meeting. / We should appreciate having your comments on the statement. Sincerely Charles C. Fichtner Executive Vice President STATEMENT OF THE BUFFALO CHAMBER OF COMMERCE ON THE INDEPENDENCE OF THE FEDERAL RESERVE SYSTEM The investigation by the Congressional subcommittee of the Joint Committee on the Economic Report which will study credit control and debt management will have far reaching implications. Because the Chairman of the subcommittee has repeatedly declared that he feels that the Federal Reserve System is too independent and must be brought more closely under the control of the administration, citizens who understand the relationship between the banking and credit structure and the national welfare are fearful that an attempt will be made to put the Federal Reserve Board under political control. The Buffalo Chamber of Commerce favors the continuance of the American central banking system guided by principles and policies delegated to the system by Congress. To meet those responsibilities, the Federal Reserve System must be independent of the executive branch of the Federal government. The Buffalo Chamber particularly feels that there should be no continuation of recent fiscal and monetary policies which have required the sub ordination of the Federal Reserve to the United States Treasury. Under such sub ordination, the Treasury, instead of being forced to bid in the open market for loan funds to finance deficits and refinance maturing obligations, can largely predetermine the interest rate it will pay. The Treasury's insistence on fixing that interest rate at a level lower than would be established by factors of supply and demand in a free money market has promoted inflation and presents grave implications on the future stability of the dollar and the progress of the economy. We believe that the Federal Reserve should be free to pursue the purposes for which it was created and that the further the System is removed from political control, the better it is for the country. mlj 12/28/51
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