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http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis i http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 How B.ies to h-nr from TO^ -and to know ta&t and Doctor tator ars euntiaraifu; y-wr trvml* * Martin *nd I w«r« cteiishtftd to Mrs. Mors« ana rsias^bar «ith a gr»mt d«*l of pleasure tii« good time we had on the last *ua»«r» I do hope w« «.-.«a trip «n» of th*s« ail good I&-. A. S\i?s»it http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2p» Thank ytm for yotcr ?*ie© letter of April 16, and it briars back happy tssaorias $f our association adth the liagill Coaaittee to ofl^et the 4asaaadi for a brokers' bank, I don't k*XH* «faat «e «o&td have done without you at that tiae and I v«»lcoa» an opportvmi^r to tell jrott agada how I look fbrmrci t& visiting idtfe ?^« from to tiaa a®d beasf itii^ fro®, your ^rsamsry 9xp®ri®G Ton end I beloiig to the s«se ^r&t«r»i1|r» that is, «*Assistant B^cretarlss of the treasury > aitbough I nsrver quite roachod tha !%klar 3«cr*taxyabip» all good Sr. Boswell Gravmtfe, fork ^ Bew Torfe* WMcCMtb http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis *v CRAVATH, SWAINE & MOORE HOYT A. MOORE DOUGLAS M. M O F F A T TRANSPORTATION BUILDING 15 BROAD STREET C A R L W. P A I N T E R E O N A R D D. A D K I N S WASHINGTON 6, D.C. R I C E T. M O O R E HESTER RUCE NEW YORK 5 A. M=LAIN BROMLEY OSWELL MAGILL . I. H E N D E R S O N 1* DWIGHT LFRED WHITNEY McCORMACK NEW YORK A R L Y L E E. MAW DWARD S. P I N N E Y OSWELL L. G I L P A T R I C HOMAS A. HALLERAN April 16, 1951 . R. B R E S L I N , JR. LBERT R.CONNELLY EORGE RANK B.TURNER H. D E T W E I L E R EORGE G. T Y L E R OH N H. M O R S E AROLD R . M E D I N A , JR. REDERICK S. S E E B E Dear Bill: I have been out of the country on a case and hence have been delayed in writing to congratulate you and the Federal Reserve System upon your appointment as Chairman. I should think the work would be much to your taste and I am sure you will do a swell job. I hope I shall have the pleasure at some time during the spring of calling upon you in your palatial new quarters. I still recall with much pleasure our association on the Stock Exchange Board. I think we did a good job while it lasted. With warm regards, Sincerely yours, Wm. McC. Martin, Jr., Esq., Chairman, Board of Governors, Federal Reserve System, Washington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CLASS OF SERVICE This is a full-rate Telegram or Cablegram unless its deferred character is indicated by a suitable symbol above or preceding the address. WESTERN '" 8) UNION " " SYMBOLS DL=Day Letter NL=Night Letter LT=Int'l Letter Telegram VLT=lnt'l Victory Ltr. W. P. M A R S H A L L , PRESIDENT Tit filing time shown in the date line on telegrams and day letters is STANDARD TIME at point of origin. Time of receipt is STANDARD TIME at point of destination WP055 PD=PH SAN FRANCISCO C A L I F 2 835P» W I L L I A M MCCHESNEY M A R T I N JR= ! FEDERAL RESERVE BLDG = 1951 APR 2 PM 12 21 :REGRET EXCEEDINGLY THAT I CANNOT ATTEND YOUR INDUCTION AND EXTEND TO YOU PERSONALLY MY HEARTIEST CONGRATULATIONS, I AM SURE YOU W I L L DO AN EXCELLENT JOB> MY VERY BEST W ISHES ARE YOURS* ABE MULTER= THK COMPANY WILL APPRECIATE SUGGESTIONS FROM ITS PATRONS CONCERNING ITS SERVICE http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis V http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Uarch 28, 1951 Dear Carroll: I also appreciate the good wishes ©f Roy who I am sure would defeat me at tennis without any trouble now. MeC. Martin, Jr. Mr* Carroll Morgan Robert C. Jones and Company 1625 Eye Street, N«W. Washington, D. C. ^. ».. • R O B E R T C . J O N E S & Co. MEMBERS THE CAFRITZ N E W Y O R K STOCK E X C H A N G E V YORK C U R B E X C H A N G E (ASSOCIATEI W A S H I N G T O N STOCK E X C H A N G E http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1625 W A EYE S H BUILDING STREET, I N G T O NORTHWEST N 6, D. C. METROPOLITAN 2922 March 16, 1951 Mr. William McChesney Martin, Jr. Assistant Secretary of the Treasury Treasury Department Washington 25, D. C. Dear Bill: The good news this opportunity to write you to appointment to the Board of Reserve and to serve as its morning gives me another congratulate you on your Governors of the Federal new Chairman. Looking back, it seems to me you have every few years given me an opportunity of writing you by being appointed to some new and more responsible position in our Government. It is a real pleasure to me to have an individual of your ability and integrity appointed in these times to such an important post. In passing, I might say, I hope you will not change your mode of living, especially as to the health part of your program, which I hope will continue to include tennis. With best regards, I am, Sincerely, Carroll Morga P. S. My son, Roy, Yale 1949, also sends his congratulations to Yale, Class of '28. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 28, 1951 Dear Beth I'juyy thanks for your good wishes* It was certainly nice of you to take the trouble to write *%&, and I *ill hope to see you on th© tennis court in the not too distant future* Sincerely yeurst fe* McC. ^rtin. Jr. Edge's Chafers fhe ftoc Court of the United States f D. 0* THE TAX COURT OF THE UNITED STATES ( WASHINGTON JUDGE'S C H A M B E R S March 22, 1951. Hon . William McChesney Martin, 2861 Woodland Drive, K.W. , Washington 3, D.C. Dear Bill: I am delighted with your appointment and confirmation,/ to an important position which, you will fill a"bly and with great credit to yourself and to the President who appointed you. My good wishes for your success are not necessary "but you have them anyway. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sincerely yours , http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 28, 1951 Dear Toms Xftcgr thanks for your wire, and I will hope to see you from ticje to time. I had a nice visit with Al Bocaoo recently, Hth all good wisJ*?sf Siueerely yours, -• HatUoal Association of Investors Brokers 24 Broad Street York, A S U R 1951 MAR 15 PM 4 02 T E L ( E G R < A p VWU027 PD H XJ NEWYORK NY MAR 15 30 3P T HON WM MCCHESNEY MARTIN TDTAQMDV TREASURY T»CDT DEPT I CONGRATULATIONS BEST WISHES OUR INVITATION FOR THAT DINNER MEETING STILL STANDS TOM MEEK NATIONAL ASSN INVESTORS BROKERS http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A S U Y T( E G R A p March 28, 1951 Dear Egbert* Thank 7011 very lauch for your nice letter of March 19 about ay new poet irith the Federal. Bad Is still alive and I an sure he la pleased, although he is not well enough to take too such pleasure out of it. Cynthia and I send regards to you and Dora, and we will hope to see you in Sea Island if not in I do hope things are working out for you on the tax aatter. feu IfeC, Martin, Jr. Brunswick Marine Construction Corporation Brunswick, Georgia http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis *-,- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BRUNSWICK MARINE CONSTRUCTION CORPORATION SHIP BUILDERS,FITTERS AND ENGINEERS MARINE AND INDUSTRIAL REPAIRS MARINE RAILWAY BRUNSWICK, GEORGIA . March 19, 1951 William Mar-tin, Jr., Esq., 21 \l\l\ Massachusetts Avenue, N. W. Washington, D. C. Dear Bill: The announcement in the paper a day or so ago was certainly tremendously interesting to me, and I hope very sincerely that the move over to the Federal Reserve is going to be one that you are extremely happy about. I cannot think of a nicer thing for you and for your father in view of his very important part in the inauguration of the Federal Reserve System than to have you come in as Chairman. It is the kind of thing that happens so rarely in life that it must be a source of great gratification to you and to him if he is still alive, as I sincerely trust he is. It is a wonderful accomplishment and all of your friends are very proud and happy with you in it. With very kind regards, believe me, Very sincerely vxwrs http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • March 28, 1951 Dear Walter: Thank you y*ry Jsueh for taking the trouble to urite sac* I tias quite interested in hearing about jour vorfc for Senator Glass, and it is possible you ran into s$r Father at that time a* he was consulted quite a hit and «aa here in Washington frequently* certainly look forward to continuing our pleasant conversations* .. . Mr* Walter Aaaifltant Pwiiawster General Bureau of Facilities laahington* D« C* :• . ;.:,.• tin, J.*. _ ' •*• ASSISTANT POSTMASTER GENERAL BUREAU OF FACILITIES W A S H I N G T O N 25, D. C. March 16, 1951. Honorable William McChesney Martin Assistant Secretary of the Treasury Treasury Department Washington, D. C. Dear Bill: Upon getting back to the city this morning I was advised of your appointment as Chairman of the Federal Reserve Bank. I cannot tell you how pleased I am to see this done. I have a special interest in the Federal Reserve Bank. Way back around 1910 I was engaged by a committee called the National Citizens League for the Promotion of a Sound Banking System and I was called upon by Professor J. Lawrence Laughlin of the University of Chicago to help draft the bill that was later presented to Carter Glass as Chairman of the Committee on Banking and Currency in the House for introduction, I aarae to Washington with Professor Laughlin and worked with him before various committees and we finally succeeded in getting the bill enacted into law. Ever since that time I have been tremendously pleased to watch the way in which it carried out the hopes and views of those who sponsored it. I am sure that you will find a lot of pleasure in doing the work under that act. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis With very kindest regards, Sincerely, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Alleni Thanks a lot for yvar good wishes* My new Job is a very serious resporssibilitj, as you. know, so I do appreciate your taking the trouble to write* Sincerely yours, ^Sr» ' ] "irsrt -an - « ALLEN MORGAN March 16, 19pl EXECUTIVE VICE-PRESIDENT http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. William McChesney Martin Assistant Secretary Treasury Department Yx'ashington, D. C. Dear Bill: I don't know of any appointment ever made by President Truman which I am more happy to see than yours of yesterday. I know you mil do a -wonderful job heading up the Federal Reserve and I am sure your appointment -will have the acclaim of all the banking fraternities. My good wishes for your continued success and herefs hoping we have another tennis game before too many months. With best regards, I am Sincerely, >. AM:vh http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 21, 1951 Dear Hr* Meissnert Thanks a lot for your good Sjr job is & very serious responsi— bilityt as JQU kn<wt so I do appreciate your taking the tesuble to write. Sincerely yoisrs, Ute, MeC. Martin, ^Tr Mr* S(^in B. Moissner St. I0itis Gar Company Tf\A &irtkpl*c± *f MA P.£.£.£*r" St. LQVI is £ar £nm pany Cables. CITY PASSENGER CARS - BUSES -TRACKLESS TROLLEYS -TRUCKS DIESEL-ELECTRIC RAILCARS AND LOCOMOTIVES STREAMLINED TRAINS - STEAM RAILROAD COACHES AND FREIGHT CARS St.Loviis 1 SEATS, CURTAINS, TRIMMINGS AND GENERAL RAILWAY SUPPLIES BRONZE, BRASS, GRAY IRON AND MALLEABLE CASTINGS - STEEL FORCINGS March 16, 1951* Dear Mr. Martin :St. Louis is delighted to note that you have again been so deservedly recognized by President Truman in being appointed Chairman of the Federal Reserve Board. Congratulations to you and your family, and every good wish for your continued success. Warm personal regards. Sincerely, Vj Mr. William McC. Martin, Jr. c/o Treasury Department, Washington, D. C. QUOTATIONS SUBJECT TO CHANGE WITHOUT NOTICE. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ALL CONTRACTS AND AGREEMENTS ARE CONTINGENT UPON STRIKES, ACCIDENTS AND OTHER OCCURRENCES BEYOND OUR CONTROL. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bear DKVTO: Thanks a lot Tor your good wishes* Hy job is a '/ery serious responsi- bility, as you know, so I do appreciate your taking the trouble to wito-. Sincerely- 70- -irr, » Martin, Jr, Mr. Da^re H, Morri3t Jr, B«& of M©w York mud Flf tl; Arerme Bank 48 Wall Street Torkt N.Y. «,— ^ c r BANK OF NEW YORK AND FIFTH AVENUE BANK 48 WALL S T R E E T , NEW YORK 1 5 , N .Y . March 16, 1951 Dear Bill: Congratulations on the new position to which you have been appointed and to which I am sure you will be confirmed . You have always done an outstanding job, and this honor is well deserved. With best wishes for your ever continuing success and with kind regards I am, as ever Very sincerely yours, Dave K. Morris, Jr. The Honorable William McChesney Martin, Jr0 Assistant Secretary of the U. S. Treasury Washington 25, D.C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 30. 1951 Dear Juan: Rear nice of you to take the trouble to write toe, and I trust things are froin£ well with you In Ntexico* Sincerely yours, cC Mr. J. M. 0. Mon&sterio Londres 159 Mexico, D.F. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MEXICO, T>. F- March 19th., 1951.- Mr. William Me.C. Martin, Chairman, The Federal Reserve Board, Washington, B.C. USA. Tear Bill:News has just reached me of your appointment as Chairman of the Board of G-overners of the FederalReserve System, and I hasten to convey to you and tothe Country my congratulations. What a happy choice this appointment is and, believe me, as an old friend I am proud of you. You have Federal Reserve blood in your veins and the exam_ pie of your distinguished father will be an inspiration which will help you to shoulder your very heavy-* responsibility. Again, Bill, my warm and affectionate congratulations. Juan M.O. Mprfasterio. \ JOMieb. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE SECRETARY OF DEFENSE WASHINGTON 16 March 1951 Dear Martin: I was delighted to see you nominated as the head of the Federal Reserve Board because I not only think you are admirably fitted for the job, but I feel even more strongly that you should have been in a top position in the government somewhere long before this. As a matter of fact, if they hadn't done something pretty soon we would have had you in the Defense Department. Please accept my congratulations for the government with my great pleasure on seeing your high qualities recognized. With warmest regards to Mrs. Martin and you. Faithfully yours, Honorable W. M. Martin, Jr. Assistant Secretary of the Treasury Washington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis X r~ Dear Sidney: How nice of you to ';ske the trouble to write me about my new Job. I was thinking; about you just the other day when I lunched in Prospect iiouse which, as you know, the Governffient now uses to entertain visiting firemen, and I think leases from the Porrestals Estate* With all good wishes, Sincerely yours, KcC* ?/artin, Jr. «r. Sidney A. I'itch«ll 184 East 64th Street York, N.Y. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SIDNEY A. MITCHELL 184 EAST 64TH STREET NEW YORK Zt. N. Y. March 16, Mr. I'SJ-liam McChesney Martin, Under Secretary of the Treasury, Washington, B.C. Dear Bill: I was delighted to read of your appointment as Chairman of the Board of Governors in the Federal Reserve System. I think both you and the Board are to be congratulated, "With best regards. Sincerely yours, ^^ March 31, 1951 Dear ~eorge: Ifiany thanks for the good wishes from my namesake, I am delighted to hoar of your f r n e progress and continue to feel us Martins must stick together. With all g>od wishes, Sincerely yours, '.::.. :.cC. !"artIn, dr. Mr. Ceorge Martin 328 N Oxford Street r , Va. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 328 N Oxford Street Arlington, Virginia 20 March 1951 Dear Bills Congratillations again - headlines in the "Star" no less I Have managed to get to "be Civilian Deputy of the Air Force Management Program at the Chief of Staff level (not Secretary's), "but you're setting an awfully hard pace for your "namesake11 to follow. Sure glad to henr of your achievements Bill. Before long wouldn't "be surprised if I'm not voting for you for the top job* Be delighted} With best wishes. Sincerely, March 31, 1951 Dear How nice of you to write ae. I had already noticed that you were 6 public servant, and I am encouraged to know you are helping in this aattor of Voluntary Credit Restraint. I had a nice note from Finley, who seems to be doin;- very well with the Tow Theory these days* ™lth all food wishes, Sincerely yours, cC. Yartin, Jr. Mr» George S. Moore Vice President The .National Cit-r Bank of Mew York New York, 8.Y. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis E S T A B L I S H E D 1812 March 15, 1951 CABLE A D D R E S S "CITIBANK" http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IN R E P L Y I N G PLEASE Q U O T E Mr. William McChesney Martin, Jr. Assistant Secretary of the Treasury Washington, D. C« Dear Bill: Warmest congratulations on your appointment as Chairman of the Federal Reserve Board. It gives me lots of comfort to know that -the great responsibilities of that job are going to be in your capable hands. I am a bit of a public servant myself these days. As a matter of fact I have been in the Fed the past two days serving on this Voluntary Credit Restraint Committee which is just getting under way. We are having another meeting on the 29th and hope I may have a chance to see you for a minute while I am in Washington for that day. With congratulations and warmest best wishes, I am Yours sincerely, fX George S. Moore Vice President » March 21, 1951 Dear Luis: Thank you for your nice note about my new appointment• I know you are doing a grand job in your present assignment and will look forward to seeing you from tiiae to time* With all good wishes, Sincerely youra, i. IfcC. Martin, Jr. His Excellency The Ambassador of Cuba Washington, D. C» http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' -a- E M B A J A D A DE CUBA ( ( W A S H I N G T O N , D.C. March 16, 1951. Dear Bill: I have just had the pleasure of reading of your appointment as Chairman of the Board of Governors of the Federal Reserve System, an office for which you are so eminently qualified. Please accept my sincerest congratulations and the very best of wishes. Luis Mac hado Mr. William McChesney Martin Jr., Chairman, Board of Governors, Federal Reserve System, Washington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 26, 1951 Dear Herb: It was nice of you to write me about my new appointment, and I am glad you are sorry to see me leave the Treasury — I, too, regret it and have enjoyed very much working with you. ?4y best to your wife and Mrs. Martin and I were recalling the other evening how nice you were in helping; out with the Mexicans a year ago this tinie. We are having another Latin American Conference starting Monday, and we will all miss you. Sincerely yours, . McC. Martin, Jr. Mr. H. K. May Treasury Attache Embassy of the U. S. Manila, Philippines http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TREASURY DEPARTMENT EMBASSY OF THE UNITED STATES MANILA, March 19, 1951 Dear Mr* Martin, Governor Cuaderno told me Saturday morning that you had resigned from Treasury to become Chairman of the Board of Governors of the Federal Reserve System. This was something of a shock to me and is certainly a source of considerable regret. It has been a great pleasure to work for you and I am very sorry to see you leaving us. On the other hand, I congratulate you and the Federal Reserve System on your new appointment. As you of course realize, I will always be at your service. Sincerely, Herbert K 0 Treasury Attache Mr. William McC. Martin, Jr. Chairman, Board of Governors Federal Reserve System nashington 25, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 27, 1951 Dear Charlie; Thaukc a lot i\>r yaur good wishes, I *rill need a lot of advice tad will to see you Tram ti .-e to t With all good wishes, L. M«C. Martin, ,v«r* Charles Ifttltby c ?resi-i«nt 'Jncoln ilationel Bank and Trust Co. S7racu?$«, H. Y. (tmttjmror C. H. M ALT BY VICE http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PRESIDE March 19, 1951 Mr. William McChesney Martin, Jr. Board of the Federal Reserve System Washington 25, D. C. Dear Bill: Though considerable time has elapsed since we last met, I have followed your career since the war years especially through mutual friends and the press. Naturally I was extremely pleased as were so many of your friends to learn that a young man of your ability and experience had relieved Tom McCabe. This extremely difficult post is one which I feel confident you can handle and in my book you are a natural for it. You are entitled to and I believe you will receive full support. Best wishes for a successful administration, One of these days when in Washington I will hope to renew our acquaintance. Sincerely yours, CHM:CGM March 26, 1951 Dear Cn«j Thar.V* A lot for your good wishes* My new job It a very serious responsibility, as you know, so I do appreciate your taking the trouble to write. Sincerely yoars, » Sltrtin, Jr* Mr. August Jlaffry Viee President Irrlnf Trust Co. few York, K.T. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TRUST N EW A U G U S T MAFFRY March 19, 1951 VICE PRESIDENT Dear Bill: Please accept my heartiest congratulations on your appointment as Chairman of the Board of Governors of the Federal Reserve System. I have an idea that this is the post to which you were destined all along and the one in which you can make your maximum contribution to the general welfare. Everyone is sorry to see you leave the Treasury but delighted about this further step in your career of public service. Sincerely, Mr. William McChesney Martin, Jr. Assistant Secretary Treasury Department ¥ashington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Hfcrch 27, 1951 Dear Wllburi It **s certainly nice of you to take the trouble to write rae. I have enjoyed very much our occasional visit* and will look forward to seeiur you fro;«i tiae to tU.e, Sincerely yours. MoC« Martin, Mr. Department of National Production Authority "lishincton, E-. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Jr. DEPARTMENT OF COMMERCE NATIONAL PRODUCTION AUTHORITY WASHINGTON 25 OFFICE OF ADMINISTRATOR http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 20, 1951 Honorable Wm. McChesney Martin, Jr. Assistant Secretary of the Treasury Department of the Treasury 15th Street & Pennsylvania Avenue, N.W. Washington 25, D. C. Dear Bill: You have gone and done it again. Greetings to the new Chairman of the Federal Reserve Board.1 Of all the Presidential appointments to position of high responsibility, of which over the years I have had any knowledge, few have been greeted with greater acclaim and approval from those whose judgement you would value. Here's wishing you good luck, good health, long service and the best of all things that are good. Sincerely, Wilbur Mace March 27, 1951 It was certtialy sice of you to take the trouble to write «« about ray n*w pest. Tt is a tough assif.afflenx, but I will do »y beat* i hope th vars are foinjp well with you your problems will act prove too difficult. With all good Si ace rely yours, . Jr. Mr. Henry Vice President American Financial and Developaaent Corp, for Israel York, H.T. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis American Financial and Development Corporation for Israel STATE OF ISRAEL BONDS 2 PARK A VEXVE, NEW YORK 16 Telephone: ORegon 9-0404 Cablt Address: B O N D I S R A O F F I C E OF MOJYTOR Vice-President http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 16, 1951 Mr. William McChesney Martin Assistant Secretary of the Treasury Treasury Building Washington, D.C. Dear Mr. Martin: May I offer my good wishes on your nomination to the post of Chairman of the Federal Reserve, It is a remarkable token of the esteem in which you are held by the entire country that your designation should be regarded universally as the most admirable solution of a very difficult problem for the country. I wish you the strength and peace of mind to carry on in this great new post. Sin HM:BG Henry Mont or ^ice-President 17 Iferoh 27, 1951 Dear It wa.fi certainly nice of you to write a about my new assignment. I appreciate your good wishes and will certainly do my best* Sincerely yours, • « c . > v r t i n , Jr. Wr. Harold State President Affiliated Young Democrats, Inc. Sew York, H*Y. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LEADERSHIP CIVIC RSSPONSIBILJTY BETTER GOVERNMENT "DEMOCRACY THROUGH YOUTH" nung lemnrralfi. Jnr. OF NEW YORK STATE HAROLD R. MOSKOVIT STATE PRESIDENT HOTEL PICCADILLY 227 WEST 45th STREET • COlumbua 5-4450 Circle 6-6600 NEW YORK 19, N. Y. •so* March 16, 1951 Joy McNamara 1st Vice-President William D. Ribyat, Jr. 2nd Vice-President Mary Fiorella 3rd Vice-President Joseph R. Masters 4th Vice-President Dr. John J. Sheehy 5th Vice-President Max J. Feld 6th Vice-President Michael Gurda 7th Vice-President Lillian Rodin 8th Vice-President Francis Martocci 9th Vice-President Lawson Barnes 10th Vice-President Francis J. Tierney llth Vice President James G. Mutari Financial Secretary William T. Garvin Asst. Fin. Sec'y Ruth Hausman Recording Secretary Hon. William McChesney Martin, Jr., Assistant Secretary, Department of Treasury Washington 25, D. C. Dear Bill: Hearties4- congratulations upon your appointment as Chairman and Member of the Federal Reserve Board and I want ^o wish you loads of luck and success in said office, with best wishes in all your future endeavors. Your splendid work in the pas4- warranted •'•his appoin^men 4 - and •'•here is no doubt tha4- the people of our country and the world will benefit by your future excellent work. Sophia Lee Hoffmann Asst. Rec. Sec'y Kindest regards, Cordelia Whitton Corr. Secretary Sincerely, Carmela Tracey Asst. Corr. Sec'y Charles E. McGee Treasurer E. Goodman Asst. Treasurer hrm/b Anthony Smith Sergeant-at-Arms Edmund A. Riordan Asst. Sergeant-at-Arms Richard H, Wels Legislative Rep. Frank Pitterman Asst. Legislative Rep. Publicity Harry Appel Gloria Tilzer Paul G. Jackson HONORARY MEMBERS MRS. FRANKLIN D. ROOSEVELT HENRY MORGENTHAU. Jr. FRANCES PERKINS BASIL O'CONNOR SPRUILLE BRADEN THOMAS K. FINLETTER http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CHARLES POLETT1 JAMES M. MEAD EDWARD H. FOLEY, Jr. GROVEH WHALEN LLOYD PAUL STRYKEB LEON G. KEYSERLING BERNARD M. BARUCH LAZARUS JOSEPH VINCENT R. IMPELLITTERI FRIEDA S. MILLER HERBERT H. LEHMAN W. AVERELL HABBIMAN RICHARD C. PATTERSON. Jr. PAUL M. HERZOG WILLIAM H. DAVIS EDMOND M. HANRAHAN CHARLES H. SILVER ROBERT F. WAGNER WILLIAM O'DWYER THOMAS J. WATSON JAMES A. FARLEY OWEN D. YOUNG LAWRENCE MORRIS OSCAR R. EWING •— http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis i will I •. FEDERAL RESERVE BANK OF SAN FRANCISCO SAN F R A N C I S C O 2O, C A L I FOR N I A March 23, 1951 Dear Mr. Martin: It is gratifying, indeed, to be able to welcome you back into the System, and to extend hearty and sincere congratulations on your appoint ment to the Board and your designation as its Chairman. To you, also, go the best of good wishes for a successful administration and assurances of the fullest cooperation to maintain the highest possible standard of effectiveness and efficiency for the System. Sincerely yours, J^Mangels, *st Vice-President Mr. William McC. Martin, c/o Treasury Department, Washington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Swr 3*>re«t X appreciate! v^r^r «&«& the aicaNjaote you 'ami* wi fra& the Ce»s&s Club a»d WM terrify eorrv to h-s«r 7013. .aar© been 111, mid I d<? ko^« 7<m ham» reaped the Hoad tt -.iellviiie ®f»inf and I «11I fcop* to have another visit with you MNHb Siac^TsIf yours, w; http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ~ http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COSMOS C L U B W A S H I N G T O N 5. D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April 6, 19&L Bear 3r, ftanni I certainly «.$ree wltjh y<su th*t It Is a , and I a** ftfrnidi ay mc«d«8io 9«r«nlt7 Is aov very «Rd was glad for th« much better than I j I will look for*f?.r^J t j visiting wit^ you one oi these dajw «a4 appreciate yoar M«b, Martin, Jr. Dr. F» I Chairman http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of i4 ¥*¥*-•«'*> £r4r>s4 » , 3, C. ^ THE AMERICAN UNIVERSITY WASHINGTON 6, D. C. SCHOOL OF SOCIAL SCIENCES AND PUBLIC AFFAIRS 1901 F STREET, NORTHWEST STERLING 4940 March 16, 1951 Mr. William McChesney Martin 2865 Woodland Drive w.W. Washington 8, D.C. Dear Mr. Martin: When, last December, in the Industrial College of the Armed Forces, you discussed with academic serenity the problems between the Federal Reserve System and the Treasury, we did not anticipate that working on a solution would soon become one of your mf jor responsibilities* May I hope that, in your new position you will earn the fruits of the accord reached with your help. I don't think that the President could have made any better choice. Sincerely yours, Fritz Karl Mann Chairman Department of Economics and Business Administration FKM:ar http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ->- How atc# of yom to tako the trouble to write j3o* Qua of the happiest p«ri0<la of ny ti&a ia '&ttM.ag ton we* spent while I served toader 7<ra in tho Arss^f. X «d fttape jpo'i knew this but it is iiic« to hav® na oppor» tunity to tall 7012 again. Martin jclns sta ic. kind ra^nl^ to you and tfnu Balony, nod I will hopo that on® of th^M the norld will qsii^t 4&*B ^ttfn^Uotly for you to gat into the banking business as plaaaed* Office of Secretary of 2$, D« C. mfcCVtb http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OFFICE OF THE SECRETARY OF DEFENSE WASHINGTON 25, D. C. 9 April 1951 Dear Bill: Please accept my congratulations upon your new appointment to head the Federal Reserve Board. While they are a "bit belated, they are nevertheless very sincere. I am happy to realize that we have men of your ability and integrity available for such assignments. With my very best wishes, Very sincerely, Mr. William McC. Martin Chairman, Federal Reserve Board Washington, D. C. April 11, Mr* Thank Jttu for ys*ir nice latter of £prtl and I am da&ightad to h«ar that 3ov«rnor la t It vas a pleasure to aeet hia and, you, and I wlH look forward to ateing y»y on aona otli«r tta. INC. Hartln, Jr. Mr. Sblgao Nat9aa»to Bank of Haw fork, 1*1* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r . THE BANK OP JAPAN TWENTY PINE NEW YORK 5, N.Y. S H I G EO M AT S U M O T O REPRESENTATIVE http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. William McC. Martin, Jr. Chairman, Board of Governors Federal Reserve System Washington, 2% , D. C. Dear Mr. Martin: We want to take this opportunity to congratulate you on your appointment as Chairman of the Board of Governors of the Federal Reserve System, and to wish you continued success in your work, As you may know, Governor Ichimada, of The Bank of Japan, arrived safely in Tokyo after having had a most interesting and worthwhile trip in the United States. It is one that he will long remember. Mr. Ichimada was very glad to have the opportunity of meeting you and he appreciates all the courtesies extended to him and his associates by members of the Treasury Department and the Federal Reserve System. Matsumo jpresentative sm:la Bsar Hr« Muln auah yotar alee letter of llareh 21 with r«speet to agr new a«5f?oljit»eat, and «m forward to ysap Ti«it cm ipril 1^» ^f father Ms often spoken of yois anJ. It will be & f&eairsre to work with you oa our isutual .Sari S* Kttlr, President, of &MMKTI» Citgr Bankers, McCM:b http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PRESIDENT , EARL R. Wm^^f^ . —****^ VICE PRESIDENT VICTOR F. ROTERING Minneapolis Vice President First National Bank TREASURER WILLIAM H. MILLER Vice President City National Bank & Trust Company SECRETARY JOSEPH J. SCHROEDER 105 West Adams Street BOARD OF DIRECTORS Louisville President Louisville Trust Company Chicago ALEX H. ARDREY A. E. BRADSHAW MILTON BROWN HARRY C. CARR FRED F. FLORENCE GEORGE GUND New York Tulsa Dallas GALE F. JOHNSTON St. Louis WILLIAM H. MILLER Chicago FRANK W. MORRIS Jacksonville Philadelphia JOSEPH F. RlNGLAND Minneapolis Dallas EDWARD C. SAMMONS Portland Cleveland R. C. WILLIAMS WILLIAM A. MCDONNELL, ex-officio Chicago 105 WEST ADAMS STREET, CHICAGO 3, Tel. STate 2-7542 Louisville, Kentucky March 21, Mr .William McChesney Martin,Jr. Chairman Board of Governors of the Federal Reserve System Washington, D.C. Dear Mr .Martin: Please accept my congratulations upon your appointment and confirmation as chairman of the Board of Governors of the Federal Reserve System, and my very best wishes for a successful tenure of office. Because of having been associated with your father in the Federal Reserve Bank of St. Louis for a period of fourteen years, I have followed your career with some interest, and I feel that you bring to the Federal Reserve Board a knowledge of the economic affairs of our nation and of the world, which will be of considerable help in meeting our economic problems as they arise from day to day. The Association of Reserve City Bankers, as you may know, is composed of four hundred and fifty policy-making executives of the banks located in the central reserve and reserve cities of the nation, and they are always available to aid in solving the country *s economic problems in a manner to preserve and expand the American enterprise system. If our Association can be helpful to you at any time, please feel free to call upon us. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Atlanta St. Louis Cordially, President t i UUu Bear Milt attending yo^r good wishes on agr na* appointiaeat* I have 80633 both Dlek Wechsler and Frank Truslow recently and both sees to be doing well* I as delighted to hear that you oosr hava your ova «H1 hope to visit with you again one of thasa Sr* Williaa 3lil Wadisoa Sssr York 1?, leir York. WMcCMtb http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 541 i'laaison Avenue New York 17 March 16, 1951 Honorable William McChesney Martin, Jr. United States Treasury Department Washington, D. C. Dear Bill: Please let me congratulate you upon your appointment to be Chairman of the Board of Governors of the Federal Reserve System. I sincerely believe and hope that you are on your way to the Presidency of the United States. In the years since I have seen you I have also seen little of Dick Wechsler, although he is but around the corner from me on 44th Street, acting as counsel to the Tulip Paper Cup Company. For some years I was in partnership with your classmate, Frank Truslow, until he became President of the Curb Exchange four years ago. I know Frank was ambitious to get the Presidency of the big board or of a large financial institution, and had to settle for an assignment to work in South America with Nelson Rockefeller. Just a year ago I set forth on an enterprise in individual practice with associates from the Yale and Harvard Law Schools who had been assisting me at the old firm. Being next door to the Yale Club I can hope that you will hop in and say hello some day when you are going past the door. With constant applause for your fine public service, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Yours sincerely, 2T. 1951 Dear Wilfreds I have been r©*<iin^ your column re^alerly in the Ces&ercial and financial Chronicle so feel that I havo kept it. touch with- you a little bit. It -was certainly nice of you t« write, howsver, and you will so inter^flte-d to krsow tJmt I isentioaed my connection in Parker Willis' tesainar in the course of answering, a goou asaay q^ueattoas *hec I appeared before the Senate Banking and Currency Coin it tee. I will seed a let of adriee in this new peat and hope you will feel free te write i«e at any tine. Sincerely yours. Wm. »•€• lartin. Jr. Mr. A. Wilfred my jsditor C«am©reial A Financial Chronicle !few Terk, K.T. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Founded In 1839 The Commercial & Financial Chronicle WILLIAM B. DANA CO., Publishers 25 PARK PLACE, NEW YORK 7, N. Y. March 16tfa, 1951 Mr. William McChesney Martin, Jr. Assistant Secretary Treasurer U. 3, Treasury Department Washington, D. C. Dear Bill: J^r hearty and enthusiastic congratulations on your nomination to be Chairman of the Board of Governors of the Federal Re serve System! Parker Willis surely would have been gratified. i Incidentally, I assume that the enclosed Treasury product has not come to your attention. It strikes me that since this was written the attractiveness of Savings Bonds has been further enhanced because of the insecurity injected in the holding of the open-market issues through the partial removal of pegging. Sincerely yours, AVM/to Enc. " A. Wilfred May Executive Editor * TBEASURI Washing ton Jtereb 7, 1951 TO s FB3Mt Hancy C. Bobinson you b*ea aewrlag all *orts of *ild gietMMnU «tt; -eking the good faith oi th* OoT*rtia*nt in reining D@fens« Bonds and tailing ta*ir purchasers thcxt they had been cLoy Bi*l*a4iag ..roeisec? If «o, you are not the only on<*, for -hie «feilclou^ nod untru* rowing Mid un fortunately oeoubt «nw distrust .re «aey to Ve h&va fell fought t&is insidious s*n&c» to our nrtion A L-t; bilitgr as *arne§tly fss *• br-v* fought tint ot&sr »©nc*ee, the inflation the t h«lp to control. Jfcil vs h^ve not slwuys known Just how to use tfct Tacts v« f«lt sure v.ore tru.s. Kow oomej .s ole^r, .".et^li^d, e:xpsrt «malyeis of outstanding vaiua of Bon4 Inve8ts&f>nt by a writer on fioeocitu setters pibli^ted tn <'•-. fintinci.-.l publication, the writer h&a no bi^s, no ts0°, only tlie desire to present r-cts to hi& 2 •>=• r- . -?n:Ung you reprints o tvo ^rti<sl*i ly . , ^ - i * ' r e d M; /, of Cc«eisrei&l ano Finjrmci»l Chronicle. ?X»^.se rgi-a the^s c: r- fully. criticists of Defan^e Bonda at &n inv^rtiaent is -^Jcon up, ai^ly zad and dispo • : ?nd ^ny o .bility of counter—;.rgua^nt. Aimed vith tfe«s« i>.ct£f figures and cone~u> i^ns, you c^ a mset «ttr ch^lien.^*? along thea* lines. Also, enclosed is • directive sesit b Berriifcc*- r. Sc:tneid--.r, Serings Bon-l Chcirafea of the Ladies JUtxiiifcxy of ti : -rtnf of Foreign VVrji, to My persons In th^t or,.anisf;ttcsR. Copig* of this ct^ma juat too to "•neiose vita t t ^ouna "obin. V® Knew you voulct s t ii ilks to it. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • "AH This and Heaven Too"? The Commercial and Financial Chroniclf -ursday, February 8, 1951 Observations. - By A. WILFRED MAY IN DEFENSE OF DEFENSE BONDS Prevalent Misconceptions About the U. S. Savings Program (In two parts) part ]—is THE BUYER BEING CHEATED? One of the important manifestations of this inflation "New Era" is the confused public discussion over the government's Savings Bond program. University economist, columnist, cartoonist, taxi driver, and show girl alike are charging the Treasury with p e r p e t r a t i n g some fancy cheating ( w i t h connotations of deceit, fraud, hoax, swindle, subterfuge, lure, dishonesty, intentional perversions Of the truth, etc.). The two main grounds for such indictment and for the demands for future additional guarantees, are (1) the reduction in the purchasing power of the dollars put into the Bonds and the assumption of its continuation, and (2) the inferior investment performance of the Bonds versus equities over the past 10 years. Let us consider realistically:— : (1) whether the investor in Savings Bonds has actually been "cheated" at all; (2) if so, whether the malfeasance is chargeable to the Treasury; (3) the prospective buyers' status; (4) justification of the demand for additional guarantees A. W i l f r e d May as the escalator technique, and (5) what relevant constructive economic policies should be adopted. With the acknowledgmen* these great advantages over the holders of savings bank 6. s, insurance, and other fixed interest obligations, there remain ihe question whether the Savings Bondholder \vas or is entitled additionally to a guaranty against loss of purchasing power. First let us—with faresi^ht rather than hindsight—examine the "plight" of the holders of the presently-maturing D-Bonds bought in 1941. Of course their dollars have depreciated drastically, manifested in a 70Tv rise in the cost of living. 1 But there is nothing unprecedented about this, particularly during wartime. 2 In the decade 1910-1920, the cost of living more than doubled—rising from 68 to 143. The buyer of the Third Liberty Loan in May, 1918, received dollars worth 13% less at its maturity time of 1928. Likewise over the longer-term have there habitually been wide swings in the value of the dollar, which were not surreptitiously kept hidden from the bond buyer of the early 1940s. During the first q u a r t e r of the century, 1900-1925, the purchasing power of the dollar fell by more than half, the cost-of-livhv.» rising from 56 to 125; during the second quarter-century the dollar's buying power has fallen less, namely by a quarter, 'in the earlier period bondholders lost 60% of the purchasing-power value of their dollars, but during the second period only 27%. A Two-Way Street It must also be borne in mind that during many intervals the holder of fixed dollar obligations has benefited from upward changes in its purchasing power. After World War I the 10-year buyer of 1920 would have gained 17% at his 1930 maturity date, the 1921 buyer 27%, and so on through the 1931 uuyers. Change in purchasing power being neither unprecedented nor a one-way street, it is difficult to discern the justification of using it as an argument to challenge the validity or equity of an otherwise fair contract. Nor, going behind the quantitative measurements, are the recent and current expansionary credit policies of this Administration being sprung as something unprecedented. The present publicly-aired feud between the Reserve Board and the Treasury has advertised the Reserve's functioning as "an engine of inflation' 1 in its supporting of the government bond market. But The Hard-Boiled Advantages The great affirmative investment advantages—wholly outside the realm of patriotism—have always been insufficiently recognized. There is complete absence of risk afforded by the full faith and credit of the U. S. The safety of principal and interest is unparalleled. The yield on the A-E bonds—3.3% annually or 2.9% on the basis of compounding semi-annually over the 10year period—materially exceeds the return from even inferior obligations. This has represented as it still does, double the yield obtainable from savings banks, and exceeds by almost 50% the investment yield from life insurance policies. A considerable tax-saving benefit is another privilege conferred on the holders of these bonds—additionally entailing a kind of windfall from succeeding taxation rises. All of the Bonds purchased before March 1, 1941 have been completely tax-free up to $5.000 of holdings (with principal holdings above that amount subject only to surtax). The Holder's Unique Option But perhaps the greatest advantage to the Savings Bondholder exists in the continuing money-back option given under the full faith and crodit of the United States Government—making of the bonds interest-bearing currency. Whereas the law permits even savings banks to deiay deposit withdrawals for 6 days the E-holder can get his money back any time (after 60 days following his purchase). The readers of this column particularly will appreciate the value of this privilege, unique in American finance. Instead of the usual heads-I-lose-tails-you-win arrangement of the corporate borrower having the option to terminate the contract through the call feature, here the lender holds the termination option, exercisable when his own or external conditions make it advisable. He is making a loan to the United States Government, with the option as to whether it is to be changed from long-term to short-term. Incidentally, this blanket money-back option is unparalleled in world finance (certain counterparts in Britain and France being much more restricted). None of our open-market government issues confer the call option to the holder. In the case of our Liberty Loans of World War One, the First Loan sold in 1917 was callable by the government (not the holder) any time from 1932 to 1947 and was actually called to take advantage of the cheapened money market in 1935; the Second Liberty Loan, issued Nov. 15, 1917, was callable by the government anytime between 1927 and 1942, and was actually called to the government's advantage in 1927; and the Fourth Loan, issued Oct. 24, 1918, was retired by successive government calls between 1933 and 1938. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Bonds Versus the Stock Market Lure A kindred complaint being leveled against the Savings Bond program is that it has diverted the individual from more advantageous investment in common stocks. The intensity of this charge is seemingly bound up with the public's current excitement over the luring bull market. In its newly-arrived-at-equitymindedness; the aversion to cash or fixed interest securities is entailing the baiting of trustees or advisers who utilize them. But here again, in comparing past performance, selection of the period is vital. Oi course, during the past decade's net price inflation, the stockholder has fared much better than the bondholder (cf. for ex., Howard Vultee's article on the cover of this issue of the "Chronicle"). On the other hand, there have been many 10-year periods of Labor Stati: 2 Statistical Abstr where the opposite has occurred. Even during wartime is this so. During the earlier years of World War II bonds registered a better performance than did stocks in both England and France. In England between September, 1939, and November, 1941—despite the general price inflation—while equities remained unchanged, Consols advanced 30% and industrial bonds by 8%. Mr. Donald Kemmerer, Professor of Economics, University of Illinois, has compiled an interesting table (published in the "Chronicle" of Feb. 1, 1951, p. 24) tabulating the comparative 10-year performances of stocks versus bonds in terms of purchasing power changes. This shows that in 10 of the .years from 1900 to 1940, a purchase in bonds would have been more advantageous even according to this criterion. Besides, the indictment of bond investment on the basis of hindsight performance of the averages, overlooks the many pitfalls in the way of successful results from common stock management attaintable by the average individual. That all is not so rosy in the equity world, is manifested by the long-term performance of the most popular stocks. The 20 most popular dividend-paying common stocks (selected on the basis of trading volume) between 1901 and 1936 suffered an average decline of 39%, one-half of the issues shrinking by 50% or more.3 From 1929 to the present, despite our current bull market, the Bow, Jones Average still shows a net decline of 35%, and in the Standard and Poor's Composite Price Index (comprising one-third of all listed stocks in number, and 90% in market value) there has been an intervening fall of about 15%. Noting the actual equity-investing results obtained in the past by the experts, such as the investment trusts, here and abroad: can it be assumed that the lay saver could have surpassed these overall results? In any event, the currently circulated demonstrations (often by self-Interested sources) of the greater anti-inflation hedging functions pf stocks, scaring the very wits out of our dollarholdingxCT'tizenry, are in effect misleading and dangerous. They are irrelevant to the question of the worth—past and future—of the Savings Bonj. to either ,the small saver or expert investor. The Bonds have been useful to the former as a valuable instrument of his saving program; to the latter as an integral part of a diversified long-term portfolio. Definitely—the buyer of U. S. Savings Bonds has NOT been cheated. This is wholly apart from the patriotic motive; any such personal satisfaciion he derives constitutes "gravy." A second instalment of this analysis of the Savings Bond program will appear in our column of next week, and will discuss whether blame for any shortcomings in the Bonds' past performance is chargeable to the Treasury: the status of prospective buyers: the current demands for additional guarantees: and relevant constructive economic policies. 3 Cf "Condensed Summary Tab 1901, 1 9 1 0 , 1919, and 1926 compar Harriman & Co., New York, 1937. The Commercial and Financial Chronicle . .hursday, February 15. 1951 Observations . s Bv A. WILFRED MAY == IN DEFENSE OF DEFENSE BONDS! Prevalent Misconceptions About the U. S. Savings Program In Two Parts—Part II In our last week's column on the U. S. Savings Bond situation we inquired into the justification for the currently popular charge that the past buyers of the series A-D Bonds, which are now maturing, have been ''cheated" by the Treasury in the following ways: (1) The intervening reduction which has occurred in the purchasing power of the dollars used in the purchase of the Bonds; and (2) the inferior investment performance of the Bonds versus equities. We pointed out that both these charges are based on hind-sight; that they have been two-way processes, depending on the time period cited; that the government's TreasuryCentral Bank inflation and monetary expansion are by no means unprecedented; and that the disadvantages of the Bonds are being exaggerated midst the inflationary psychology attending the current bull stock market. Furthermore we noted that the affirmative advantages of the Bonds—such as their unique vesting of the call feature in the holder rather A. Wilfred May than in the borrower — over other savings mrdia including fixed-interest investments, tend to be under-realized. Let us now consider:—the position of those presently buying new E Bonds or accepting the "extension" privilege about to be offered to the holders of matured certificates; merits of the demands for additional guarantees via "escalator" provisions; whether whatever defrauding has occurred is ascribable to the Treasury Department; and what relevant external remedial policies should be adopted. In the first place, the enlarged investment advantages contemplated in the Treasury's proposed "extension'' privilege should be noted. This would give the holder of matured bonds the option of holding them for another 10 years at an interest yield of 2.9% compounded semi-annually (3.3% un-compounded), at a 2'^% yield if held for seven and one-half years, or cashing them sooner as a short-term loan at reduced interest rates; and the right to postpone any income tax payment on them until 1961. Also, they may be exchanged into series F or G. De-flation Hedge Feature The prospective buyer of U. S. Savings Bonds must realize that they of course entail the disadvantages bound up with all fixed-interest savings media. But, insofar as he is an investor, he should consider them as part of a balanced over-all portfolio by all categories of holders. They can be looked on as a good hedge against a possible future deflationary cycle. It seems to this writer that despite the public's prevalent concentration of attention on the present inflationary movement, there is little warrant for assuming the permanent disappearance of major downward movements at least interrupting a long-term upward trend. We must remember that, despite the many and varied inflationary influences in peace and war throughout the 1930s and '40s, it took a full 25 years for the dollar's purchasing power to sink back to its 1920 level. Surely still existing are chronically deflationary forces, such as the nation's enormous productive (oVerproductive in some fields) capacity, which would of course be accentuated during a possible reduction of the armament activities. In addition to the potentially enormous supply of goods and services available for civilian consumption (probably exceeding any period excepting 1948-1950), deflationary factors include increasingly heavy taxation, decreased purchasing power by the many "non-pressure-group-protected" groups in the community, restrictions on bank credit and other controls. Actually—is that bet on a higher price level in 1961 so sureDeficit Financing and the Price Level Great misconception exists about the alleged act of deficit financing on the price level. Actually there has been little correlation evidenced between money-printing and the price level. The Treasury has had no cash deficit in the fiscal year 9oO nor midst the inflation-hulla-baloo during the first half of 1901, and since 1949 there has been little expansion of bank credit Dm-ing the monetary expansion from 1937 through 1941 the cost of Hvin° index remained practically stationary (and common stocks declined almost one-half). Although the quantitatwe m5 uences toward inflation may well remain, the diction of the controllin" psychological factors may well be reversed. As we pointed out in last week's column, there is nothing new about our freasury'interference with the Federal Reserves functionin-—this having been repeatedly warned against heie durhne"he°19'0s and our deflationary '30s, following the disastrous ex^rfencts in Germany and France, and the Brussels Conference Resolution of 1920 and the Genoa Conference m 1922. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "Escalator Service ' for Bondholders? Let us now conside proposal made that the government should offer, along wit. savings bonds, compensation at redemption to allow for any intervening loss of purchasing power. This proposition, advanced for some years now by Professor Sumner Slichter, is winning increasing approval midst the public's current "inflation new era" and the emphasis on the amount of E Bonds being cashed-in.* (This device was in vogue at Ihe end of the great German inflation, \vhen bonds were floated, repayable in terms of the value of coal, wheat, or rye.) In the first place, it must be realized that such an escalator clause would have to be a two way provision—adjusting for de.dines as well as rises in the price level. A "gold clause" is not a one-way proposition; in this case such a protective device is particularly indefensible because of other affirmative investment advantages embodied in the Bonds. Even in dealing with powerful union labor, the escalator provision is two-way—at least nominally so. Extending this gold clause-like device to Savings Bondholders would exceptionally favor a single investment medium. It would directly discriminate against the holders of the many other savings media; as deposits in mutual savings banks, shares in savings and loan associations ($16 billion presently residing in our savings institutions), insurance policies, and other government obligations. All presently outstanding government along with other bonds would be severely harmed; and their further distribution rendered vastly more difficult. Private debtors would be unable to meet such competition of a guarantee provision, because of their inability to tax to recoup the cost thereof, or to protect themselves with equity assets to meet a rising price situation. (To the extent that they were able to shift out of fixedinterest assets, they would be adding to the present "inflation era scramble" into equities, and abetting the inflation panic over the dollar.) "Escalator service" for bondholders would subsidize another special group at the expense of the rest of the community—of which special privilege theie is top much already—thus furthering rather than attacking, the basic causes of the inflation. And the more groups that the government exempts from the effects of inflation, the heavier will be the buiden, through increased taxation and impaired purchasing power, on the unprotected and unsubsidized remaining groups. Freezing the Inflation This inclusion of ever larger segments of the community into protection from inflation underlines a vital objection to the escalator principle, namely the permanent cementing of the inflation trend into the economy; and if not actually giving the public a positive "stake" in inflation, at least removing the selfinterested motivation for opposing it. Going to the Roots Ex-Politics Instead of putting more of the population on the escalator keeping pace with inflation, let us rather go to the root of the trouble. In prescribing what is to be done, we should realize that the remedial action must be taken on a broad front, and not merely promised on a concept of "Treasury-cheating." The weapon of taxation should be used non-politically forthwith to curtail the great flooding of the spending stream with armament earnings leavened with the current buyers' scare psvcolo°y To reduce spendable income wherever it is, tax policy must be removed from the political sphere, raising the imposts on lower and middle-income groups in lieu of relying on progressive "soaking-of-the-rich"; and obviously higher and much broader excise taxes should be imposed. Taxation must be used effectively to keep the demand for goods and services within the bounds of the available supply. In this anti-inflation area the Treasury has more responsibility for constructive action than in other-: but it must be remembered that in tax as well as in spending and other policies, the controlling exigencies of politics dominate the Congress, the Executive, and practically every other government policy-maker. The present shadow-boxing with non-defense spending should be stopped, and such outlays drastically curtailed. Here again the responsibility for excess cannot, be laid at any single door On the one hand. Senate Finance Committee Chairman Geor«e Democrat of Georgia, this week accepts Mr. Truman's challenge by insisting that his budget for the coming emergency year can be cut $5-6 billion without harm. Unfortunately, however, the Georges, the Byrcis. and the iJougiases are far outnumbered by other Senators on both sides of the aisle, who only believe in economy for the other fellow, and block every effort at prudence wherever they have a self-interested voters' stake. Increase of production undeniably is one of the basic effective weapons tc keep down the price level and preserve the dollar's value. But the multitude of: orders now emanating from Washington curbing the use of materials, the slaughtering ol animals, and imports, surely are not aiding a production upsurge. Controversial as the subject ma,v be. still the conclusion seems incontroveitible that "scare-bu\ing" gi\es an artificial lift to the price level via "borrowing from the future." And surely Washington's long string of pronunciamentos have given a 100% push in this direction—viz. the successive statements about imminent shortages, the dire need for price ceilings, and statements such as Administrator Di Salle's current statistically pm-pomted prediction of a further 5-6% price rise by mid-year. Neither the Treasury, nor the Congress, nor anyone else, should be complacent over policies which further dollar depreciation—undermining the holders of all savings media, as well as the Treasury's obligations. Perhaps nothing short of full and continuing gold convertibility—\yith "gold discipline counteracting human frailty—can do the trick. Pending accomplishment of the needed economic reform, the Savings Bond constitutes the citizen's best savings medium, and one of several useful instruments for the investor. • The significance of the current E-dond redemption figures is generally ™a,'ticularlv in relating them to concurrent sales. They should b™reuJ2d 1«?"q '2 emphasis to thf aggregate of Bonds outstanding RedeemnVwm^mally "end to rise with the increasing s i« of the "pool" ava.lable for that purpose. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 50, 1951 Dear Mr. Marks: Thank you for your nice note of Farch 16. I appreciate y^ur ";aod wishes and have reatS the circulars with a great deal of interest. Sincerely yours, "rr.. '-?cC» Martin, Mr. Carl Marks Carl i^urks £ Co., Inc. 50 Broad Street New York, ^.^. Jr. MARKS &. QXJNC.. •*•:• TELETYPE: N.Y. 1-971 TEL. HANOVER 2-OO5O CABLES—"CARLM ARKS' AFFILIATE-CHICAGO, ILL. 5O B R O A D STREET N E W Y O R K 4, N.Y. March 16, 1951 Mr. William McChesney Martin, Jr. Assistant Secretary of the Treasury United States Treasury Department Washington, D. C. Dear Mr. Sincere congratulations on your appointment to Chairman of the Federal Reserve Bank Board. It is a great pleasure to watch you "grow". I am enclosing two circulars, of the many I received, in the hope that they will prove interesting. I should also like to inform you that the general opinion in the street is that a STRONG man has taken firm hold of the chairmanship of the Federal Reserve Board and a great deal of confidence in the dollar has been-automatically restorede CARL liARKS CM:JC http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis for yoar good wislasa* Jr. Crmig Miller, ..'-V* 601 CARLTDN T E R R A C E APARTMENTS 92D SOUTH JEFFERSON STREET R D A N D K E 1 3, V I R G I N I A TELEPHONE 9 4 9 B April 5, 1951 Mr. William McChesney Martin Federal Reserve Bank Washington, D. C. Dear Bill: Congratulations on your appointment to very high office, Sincerely yours, ~yO y */-• r~ L^*^- M~•*•- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 30t 1951 Dear Governors It was certainly nice of you to take the trouble to cable me your good wishes and welcome me into the central banking fraternity, I will look forward to continuing oar pleasant relationship* With all good wishes, Sincerely yours, MeC. Martin, Jr. Honorable Donate Menichella Governor of the Bank of Italy Italy http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis E P 0V WU 018 92 1/$0 PD INTL FR t- &\W 19 * * CD ROMA VIA WUCABLES MAR 19 19^1 lf 1238 HON WILLIAM MCCHESNEY MARTIN JR US TREASURY I LEARN THAT YOU HAVE BEEN DESIGNATED AS CHAIRMAN OF THE FEDERAL RESERVE BOARD STOP THE KNOWLEDGE OF YOUR ACCOMPLISHMENTS AND MY FEELINGS OF GRATITUDE FOR UNDERSTANDING YOU SHOWED FOR THE PROBLEMS OF MY COUNTRY IN YOUR PREVIOUS POSITIONS ARE TO ME SPECIAL REASONS FOR SINCERELY CONGRATULATING YOU ON THE OCCASION OF YOUR ASSUMPTION TO THE HIGHEST POSITION OF RESPONSIBILITY IN THE WORLD OF CENTRAL BANKS STOP PLEASE ACCEPT MY BEST WISHES FOR YOUR FUTURE ACTIVITY AND MY KINDEST REGARDS DONATO MENICHELLA 812A http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis GOVERNOR BANK I TALI A. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 30, 1951 Dear Harrys Bow nice of you to write aei I have a •warm spot for you in s$ heart because ytu were so kind when I went in the Ans(ff and I enjoyed so xauch the evening I spent with you at your house, new ay house, and we oooldnH be h^spier in itl certainly look forward to seeing EcC« Martin, Jr* Mr* H, S* Morgan 2 lall Street Ibrk, H.T. ) I 9 ^// ^// ^ QA^(2^^ http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -'7 March 16, 1951 Dear Bill: Just a line to take you my best wishes on becoming Chairman of the Board of Governors of the Federal Reserve System. I look forward to being in Washington before too long and shall take the opportunity of coming to pay my respects. With warm regards, I am Yours faithfully, H. S. Morgan. William McChesney Martin, Jr., Esq., Assistant Secretary of the Treasury, Washington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . ' • „..:-. Dear Mr* ITUlert It ms very nice of you to take tb© trouble to write toe, ard I think it «H1 be fine for you «nd »e to h«n» another together! yours, HcC» Kartin, Jr, Association 12 EMt 36th Street York, K,I* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE AMERICAN BANKERS ASSOCIATION TWELVE EAST THIRTY-SIXTH STREET NEW Y O R K 16, N.Y. 16 March 1951 Dear Mr. Martin: It was a pleasure to read of your being appointed Chairman of the Board of Governors of the Federal Reserve System. Please let me send you my heartiest congratulations and best wishes on this recognition of your fine ability. Perhaps we should drink to your success with a couple of cokes as we did in Pittsburgh one night. With best wishes, Deputy Manager Mr. William McChesney Martin, Jr., Chairman Board of Governors of the Federal Reserve System Washington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 30, 1951 Dear Chester: Dal has always had a hlg-h regard for you, and I #111 try to Justify your confidence. I will hops to see you occasionally. Sincerely y ? u r e , « McC. Martin, Mr. Chester Morrlll 3908 Ingomar Street, Bashing-ton, B.C. Jr. CHESTER MORRILL WASHINGTON. D.C. March 20, M: 1951. ;h I carrot v elp but regret very greatly the departure o^ Tc ;C^be, I wish to be counted imon^ t^ose v;ho sincerely feel t"^0^ t v e Syste- " " > ^te ' ur selection is his successor. It is unique ?rd I -^rr. pure th^' • father will be very proud. I hone th^t you will be ible to remain with t^e Board lonr enough to rovive inn strengthen the purpose of its founders, who sought by long terns ^ncl spaced appointments to build up i cor ' 'ty of experience ind policy that would survive the vicissitudes of changing conditions, ind to justify hope that it -• become the ''supreme court of finance f? . ishes for your success, I an Sincerely yours, Hon. Lllia http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 'cChesney I/art in 9 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 30, 1931 Dear Mr. Martin: I salute another "artIn1 It Is certainly nice of you to take the trouble to /rite me. I do hops you will realize your desirs to work In the Latin American Boole field. It Is one of the mont important from the standpoint of this country these days. With all £ool wishes, Sincerely yours, Was. McC. Martin, Jr. Mr. ?rcd A. Martin 1619 Marrachusetts Avenue, K.S. oo, D.C. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dear Ray: How nice to hear from you again, ani I 3o hope you are happy with the National Association of Securities Dealers* <allace Fulton is a good friend of mine, ani I aro sure he must be a nice fellow to work with. Will certainly look forwarl to seeln£ you from time to time. Sincerely yours, , MeC. Martin, Jr. Mr. Ray Moullen National Association of Securities Dealers, Inc. 1625 & Street, K.tf. Washington, D.C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis National Association of Securities Dealers, Inc. 1 6 2 5 K S T R E E T , N. W. Washington 6, D. C. HOWARD E. BUHSE Chairman SAMPSON ROGERS, JR. WARREN H. CROWELL Vice Chairman Vice Chairman WALLACE H. FULTON, Executive Director CHARLES H. PINKERTON Treasurer INVESTMENT COMPANIES COMMITTEE HARRY 63 WALL I. STREET HERBERT R. ANDERSON S. WALDO COLEMAN F. EATON. NEW CHAIRMAN YORK S, N. RAY Y. 1625 N.W., SECRETARY WASHINGTON 6, GEORGE S. McEWAN SAN FRANCISCO NEW YORK JR. MOULDEN. K STREET, NEW YORK ROBERT E. CLARK CHARLES PRANKARD. BOSTON WOOLNER NEW CHICAGO W I L L I A M F. SHELLEY BOSTON ALBERT W. BOSTON TWEEDY JOSEPH E. WELCH ADOLPH D. C. PHILADELPHIA YORK March 26, 1951 Mr. William McChesney Martin, Jr. Assistant Secretary of the Treasury Department of Treasury Washington, D. C. Dear Bill: I have just returned from a short vacation to learn of your nomination as Chairman of the Board of Governors of the Federal Reserve System. Your selection is such a natural one that the only surprise is that it was not made sooner. I cannot imagine a happier choice, nor one more able to handle the complextities that face the Reserve Board and the Treasury. It is a real pleasure to congratulate you and more particularly the country on this most excellent choice. It could not happen to a nicer guy. ¥ith every good wish for a successful administration, I am, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis yours, Ray Moulden http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dear John: How nice of you to take the trouble to ^rlte roe, and I do hope that you and I and the leavers can ret In some tennis! My beat as always, Sincerely yours, . McC. Martin, Jr, Kr. John M* Meyer, Jr, 23 Wall Street New York, K.Y. *• ( 23 WALL STREET http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 30, 1951 Dear Finley: My bast to all the olrt sans, an3 I certainly appreciate your taking the trouble to write me* Sincerely yours, Win. MoC. Martin, Jr. Ilr, Finley ItcElroy A» G. Edwards sud Sons St. Lo^lis, I'issoiri http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -tr* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4O9 NORTH EIGHTH STREET SAINT LOUIS CENTRAL March 15, 1951 Mr. William McChesney Martin c/o United States Treasury Washington, D. C. Dear Bill: Just got a call from your old secretary, Peggy, who tells me that she sees on the news ticker that you have been appointed head of the Federal Reserve Board. Congratulations and best wishes! 4744 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mueli yewr good OB ajf new as sigiiia€si't, aixl wiH IK^» to S U R Y 1951MAR 19 All 7 46 WA011 DL PD UK BOSTON MASS MAR 17 19^1 1226P WM MCCHESNEY MARTIN ASST SEC OF TREASURY WASHDC I HAVE THE GOOD NEWS AND IT MAKES ME VERY HAPPY STOP YOU HAVE MY MOST SINCERE BEST WISHES I HAVE NO DOUBTS OF THE SUCCESS T E L E G R A P H T R E A S U R Y J I M MCMANMON http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MAR 19 811A T E L E G R http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 31, 1361 Dear M*et How -lice of you to write zas> and T 4* hop© we car> have & visit aredn ^hec you ^et to ^ftshinftott. Ton <str« always welcome ixj a roaast at the housa you know, and I never forf.et th« many tfelks we had in the ol<5 days ©f the Sxith mil f od wishes, Si ncere ly yours , , Jr. Mr. 3. H. Senior Associate Editor The '^ull Street Journal !l«w York, H.Y. THE WALL STREET JOURNAL DOW JONES & COMPANY, Inc. 44 STREET NEW YORK 4, N. Y. PU BL1 SH ERS http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BROAD March 15, 1951 Mr. William McChesney Martin Treasury Department Washington, D.C. Dear Bill: I am more than pleased to learn today that you are to be the new Chairman of the Board of the Federal Reserve System. Best wishes in what I know will be a most interesting job for a man of your talents. Best regards, B. H. McCormack Senior Associate Editor BHMcC:km http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Boar Jehu i Tba&ks a lot for your good wish©*, aad I will look forward to ««*lng you from tlta* t tiasA her* ia ^m*hlm§taa if not ia Boston. Cardial1^ yours, IRtt. McC» Mi.ri.ia, Jr. Mr» John C* MeClintoek Unit*4 Pruit Co. Boston, UNITED FRUIT COMPANY GENERAL OFFICES, 80 FEDERAL STREET BOSTON 10, MASSACHUSETTS ARTHUR A. POLLAN EXECUTIVE VICE PRESIDENT KENNETH H. REDMOND ASSISTANT EXECUTIVE VICE PRESIDENT http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 19, 1951 Mr* William McC. Martin, Jr. Chairman of the Federal Reserve Board Federal Reserve Board Washington, D. C, Dear Bin: I was delighted to read the announcement of your appointment as Chairman of the Federal Reserve Board in the New York Times and congratulate you on this very important assignment. It is certainly a most challenging one, and I know that you will do a splendid job in your new position. I did not know until I read your autobiography in the Times that your father was one of the fathers of the Federal Reserve Bill, and it must feel pretty good to carry on what he started. Warmest personal regards. Sincerely, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis De«.r ThfcT'lrc t* lot for yor.r food. wishes. ^y n»v ^oh is «. rerr serious re«poo«IM.lity, as you kTSow, so I do *,;pareci«.tc yovr takinjr trouble to \rrit* « With kind regards* Jr. Mr. xArr^ A» n Ch&i ra»B Sacurita.e» and isxc/magc iatfloa gtQA, D* C* *- ( UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON 25, D. C. March 20, 1951 OFFICE OF THE CHAIRMAN http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dear Bill: Congratulations upon your selection to that most important post of Chairman of the Federal Reserve Board. I know you will turn in a brilliant performance With best personal regards, I am Mr. William McChesney Martin, Jr Assistant Secretary Department of the Treasury Washington 25, D. C. D«ar Phili thanks a lot for your nice note. I hep* you are having a goodt trip amd will look fonward http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to sa«Ui|: you from tl^9 to time. With ail good wishes, Siac«r«ly yaare, Jw&m/Oia/it At Barranquilla iarch IB, 1951. Hon. #1*4• kcC. Martin Wasnin^ton, !)• G, Dear Bill:Your selection to head tnc federal Reserve Board is a well deserved rionor. You n^ve &y congratulations on tuis furtner cecognitioi. of your capabilities. It could, not -come as a supri^e to your f r i e n d s as we nave known tneu* for many years You nave no iaea how uiucn confiaence is generated by navin^, oi^e liKe you in a spot like timt. ^gain my cox^ratulations and be sure tnat 1 snail call you Wijten 1 a^i next in wasniijgton. •,-,'ion jfctiriaest personal regards, I am http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis dine . http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 30, 1951 Bear Arthur: It was certainly nice of you to tak© the trouble to write nef and I appreciate very much yow? good wislws* look forward to visiting with time to tim@» Sincerely yours, « MeCain Vice Cimirsac Board of Directors The Chase National Bank Sew York 15, ».Y» ( r th* (Shoe? l&rtimral OF THE CITY OF NEW YORK NEW YORK 15, N. Y. ARTHUR W. MCCAIN March 16, 1951. VICE CHAIRMAN BOARD OF DIRECTORS Dear Bill, It was with a great deal of pleasure that I read of your nomination try the President as a member and Chairman of the Federal Reserve Board. At a time when there is such widespread disagreement on what the board1s policies should be, and when a decision on policy might have serious effect upon the future financial and economic condition of our country, we all realize what a difficult and demanding post you are taking over. I am delighted, however, that this job is being placed in your hands and am quite confident that you have the judgment and the character to handle it the way it should be done for the best interests of the nation as a whole. ¥ith heartiest congratulations upon the great honor accorded you, and with best wishes for an outstanding success in the new post, I am Sincerely, /J/l* f Mr. William McChesney Martin, Jr. Chairman, Federal Reserve Board Washington, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis &MT Bofet It was Hie* of you t© t«k* t&@ ttftxibif to wrlt« »•-« I will iHMd & lot of luck in my mew aBBignaent unit will Jttop« to visit with jm txty®. tl»» to ti-«» http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis $lu<»r«ly ymiPt, ( S H E A , G R E E N M A N , G A R D N E R & M<?CONNAUGHEY WALKER BUILDING W A S H I N G T O N 5, D. C. March 16, 1951 Dear Bills My sincerest congratulations on your nomination as Chairman of the Federal Reserve Board and my very best wishes to you in connection with the preliminaries with the Senate and in carrying out the great responsibilities that will fall upon you as Chairman of the Board, I think it's a swell appointment and I wish you the best of luck. Sincerely yours, Robert K. McConnaughey Honorable William McChesney Martin Assistant Secretary of the Treasury Washington, D. C* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bear Colonel I X mm assure yms t&e ae* pitcher needs a lot of dte-ariaf from t&e f an la the 1 couldn't agree with j®& mars aboit of the carrent situation «ul Ihlak It i« p>imf to be v^r^ dUTfieuXt for ua to keep our f«et oa the Uie J>oas@ you ««r* good to sell as has Xlred ttp to ?$ar reeca»aBdfttl«m and «& couldn't be happier* % best to SQS* Maglll, IXee 'leadersom nod Seas Ollpatrle^ all of whom are frl«ad« of mine fim* Had pertcsriai regard*f Col. Alfred http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H O Y T A. M O O R E DOUGLAS CRAVATH, SWAINE & MOORE M. M O F F A T TRANSPORTATION BUILDING C A R L W. PA INTER L E O N A R D D. A D K I N S IClDn/^vAr->C-mc-C--r '& ES R O A D O i l WASH INGTON 6. D. C. M A U R I C E T. M O O R E D O N A L D C. S W A T L A N D C H E S T E R A. M 9 L A I N BRUCE M P"\A/ N^/^ O \/C ^ IN tW I <—' K f\ O BROMLEY ROSWELL MA.GILL A. I. H E N D E R S O N W" D W I G H T ALFRED WHITNEY McCORMACK CARLYLE NEW YORK E. MAW E D W A R D S- P I N N E Y ROSWELL L. G I L P A T R I C THOMAS A-HALLERAN L. R- B R E S L I N, JR. ALBERT R.CONNELLY GEORGE FRANK B.TURNER H. D E T W E I L E R GEORGE G.TYLER JOH N H. M O R S E HAROLD R . M E D I N A , JR. FREDERICK S. B E E B E Dear Mr. Martin: For the new pitcher from a fan in the bleachers: From where I sit it is impossible to understand the complacency in government circles, and pretty generally also in business circles, toward the progressing inflation* It has already destroyed billions of accumulated savings, we seem to have done nothing effective to stop it or slow it up, and we are committed to policies that make further inflation very difficult to stop* As you go into your new job, which I know you will do with your usual competence, I venture to express the hope that you will succeed in impressing on the Administration the seriousness and immediacy of this problem and the terrible consequences that a continuation of the present trend could bring about* With all good wishes, Sincerely yours, William McChesney Martin, Jr*, Esq., 2861 Woodland Drive, N.W., Washington, D. C. MM http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8*a# Isrtosrt* J l was file© of yaa to tak* tb« trtmble ta writ* ae about my u«w Jobf cad I MR flmd to hear >^xiu a cucc«MfuI trip t» £«atli fabric** http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis *ttt4 all good wish^, • Slpeer^ly Toarp^ IMU 'K«C» Martin, «lr. R e y n o l d s 8c Co. 12O B r o a d w a y New York 5, N. Y MEMBERS NEW Y O R K S T O C K E X C H A N G E N E W Y O R K CURB EXCHANGE CHICAGO TELEPHONE WORTH 4-6700 BOARD OF TRADE C O M M O D I T Y E X C H A N G E , INC. PHILADELPHIA-BALTIMORE STOCK E X C H A N G E MIDWEST STOCK E X C H A N G E NEW YORK COTTON E X C H A N G E http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 27, 1951 Hon. "William McC. Martin Asst. Secretary of the Treasury Washington, D. C. Dear Bill: I just got back from South America after a very successful time. I am sure you will be pleased with the work I did in connection with an individual project there, as I think it can do nothing but improve our relations with Brazil. The real purpose of this letter is to congratulate you on becoming the Ch&irman of the Federal Keserve Board. Everybody I have talked to in our business end in deposit banking, too, is enthusiastic that a man of your ability and high purpose has been appointed to such an important post. I wish you the most of success in it and the best of health. NOKBERTA. McKENNA MM: DM Miss Ilildrod F. !eCh@sn©y, Stipervisor of Social Tha University of th« State of flaw York, Tha State l&uoation Department, Albany 1, Jtew York. Bear Miss Thank you for yew? nice letter about ^y middl© name. I am sorry to say that I hav@ never bean able to trace tfa© origin of it, oth©r than that my forebears probably cam© from Scotland, and I am told by one of agr cousins in St. Louis that we are roughly on@~@ighth Irish and s@v©i>-®ighths Scotch. There i« a McChesaey in Chicago irho® I hav@ jast several times but w@ agr@®d that om* re-» lmidonsliipf if any, was ©xtr^aely distant* I am sorry to have so little information on the McChesney line, but I am vary glad to toow of another McChesasy* I am sure yo«r work must be isost cons tractive as Stjpervisor of Social Studies in Th© University of t^e State of Hew York. It waa nice of you to writs* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis McC. Martin, Jr. THE UNIVERSITY OF THE STATE OF NEW YOt THE STATE EDUCATION DEPARTMENT ALBANY I BUREAU OF INSTRUCTIONAL SUPERVISION ERNEST A. FRIER, CHIEF DIVISION OF SECONDARY EDUCATION HARRISON H. VAN COTT, DIRECTOR ART. VINCENT J. POPOLIZIO. ACTING MATHEMATICS. F. EUGENE SEYMOUR ENGLISH. GEORGE W. NORVELL MODERN LANGUAGES. ROY E. MOSHER GENERAL. M A R Y MUSIC. RUSSELL CARTER E. HAYES GENERAL. ROBERT E. PARKER. ACTING SCHOOL LIBRARIES. ANNA C. GENERAL. ANTHONY E. TERINO SCIENCE. HUGH TEMPLETON GENERAL. DEXTER G. TILROE SOCIAL STUDIES. KENNEDY MILDRED F. McCHESNEY March 19, 1951 Mr. William McChesney Martin Jr. Assistant Secretary United States Treasury Washington, D. C. Dear Mr. Martin: I am not writing to secure a job, to complain about inflationthough in your new position you will have opportunity to deal with that problern-nor to ask for souvenir Treasury notes. Rather, I am interested in your middle name, which interest will be explained if you will let your eye travel to the signature on this letter. Since the time you were made president of the stock exchange and I saw your name in the papers, always with the middle name written in full, my curiosity has urged me on to write you. When the announcement appeared in the New York Times last week that you had been nominated by the President to be chairman of the Federal Reserve Board, I finally decided to write to congragulate you - on behalf of the McChesney side of the family1 In recent years I have become increasingly interested in my ancestry and in families bearing this name. (Itfs a rather uncommon one in these parts now). About 1730 Edward McChesney came to this country and settled where I now live - a small town a few-miles east of Troy, New York. He had eight sons - which accounted for the town!s soon'being half populated with McChesneys. The "line" of which I am a descendant stayed on and now my family, with one exception, is the last one bearing that name, and I have no brothers. A cousin is a lawyer in Troy. About a hundred years ago some of the family moved west to the Chicago area. I am wondering whether you might belong to that branch of the family. I believe I read that you are from St. Louis, where your father was formerly president of the Federal Reserve Bank. V MFM:md http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mildred F. McChesney Supervisor of Social Studies v&ry m&h the troT&le to write- ne abcmt igr nwr pariietilarlgr *ft«r th* feai^J trip F>« http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis hail t» ^ie I&&r SMit* I »111 look to s«®iag jo« shortly* C» ASSISTANT SECRETARY OF STATE WASHINGTON April k, 1951 Dear Bill: I returned from a trip to the Near East just in time to read about your appointment as Chairman of the Federal Reserve Board of Governors. This is a well-deserved honor, Billo My heartiest congratulations 1 Sincerely yours, George G. McGhee The Honorable William M. Martin,Jr., Chairman, Federal Reserve Board, Washington, D. G* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis THE RIVER CLUB ~p STREET AND EAST RIVER NEW YORK 22, N. Y. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 29, 1951 William McChesney Martin, Jr., Chairman Federal Reserve System Washington, D.C. Dear Mac: I just want to extend, to you my very heartiest congratulations on your being named head of the Federal Reserve System. That is not only a position of great responsibility but one also of great influence on the welfare of the people of the United States. I think you will be able to measure up fully to this responsibility and I just want to wish you every success in doing so. With very highest personal regards, and very best wishes for your future success, I beg to remain, Yours sincerely, Charles S. McCain flow with tiw ia for I ao -iptgr http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to to « j r swr ta .oa is «U1 ^% iasd I to tiat* TREASURY DEPARTMENT WASHINGTON DIRECTOR OF ADMINISTRATIVE SERVICES March 27, 1951 Dear Mr. Martin: Heartiest congratulations on your most recent accompli shmentl Vfhile everyone with whom I have discussed the matter in the Treasury Department sincerely regrets your loss by the Department, we are all pleased that you have "been so highly honored on another occasion. Your appointment "by the President and the prompt approval by the Senate to become Chairman of the Federal Reserve Board stand as the highest tribute to your outstanding character and integrity. The privilege which I have had to be associated with you in the Treasury, even though briefly, will stand out as one of the highlights of my experience in Government. I shall always be proud of the opportunity I have had to work with you in connection with some of the Treasury Department's drives, such as Red Cross, Metropolitan Police Boys1 Club, and National Symphony Orchestra. May I wish for you the very best at the Federal Reserve Board. I think you already know that if at any time I can do anything to assist, I will be very pleased to do so. With kindest personal regards, I am Sincerely yours Honorable Wm. McChesney Martin, Jr. Assistant Secretary of the Treasury http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ceai* Mr* Kefi*f»a« I *ppr*clfet» very a&ch ymr nio© not* &mgNMUiiilf an oii my IMHT job, and I m partleularlj pi^ms^a to to&r rroaj L«xia^to&* flrglfiia* lou oo4ibtl«i& knew lay father wljo was in «fa*b>oei «BC| A*^«S at abait the sa»« tl^« and «o I ^ppreeiAte vary jwir writing ®e* Sinearttly ymir»» ' OFFICERS JAS. LEWIS HOWE Chairman of Board B. LEE KAGEY President WM. M. McELWEE Honorary Chairi!W!l ol TOkrd ROBERT B. WEAVER Cashier M. W. PAXTON Vice-PreBident and Trust Officer W. CLINTON CHITTUM Assistant Cashier P E O P L E S N A T I O N A L BANK DIRECTORS N. D. CHAPMAN Distributor for Gulf Oil Corporation C. C. HUMPHRIS W. R. Humphris and Son B. LEE KAGEY FRANK J. GILLIAM President Dean of Students Washington & Lee University WM M McELWEB Honorary Chairman of Board ( JAS. LEWIS HOWE Professor of Chemistry Emeritus Washington & Lee University Attorney-at-Law Publisher Rockbridge County News SCOTT HUGER President Huger-Davidson-Sale Co. JOHN D. STERRETT, JR. Treasurer of Rockbridge County http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M. w. PA XTON M E M B E R F E D E R A L DEB»SIT INSURANCE CORPORATION THE PEOPLES NATIONAL BANK LEXINGTON, VIRGINIA Statement of Condition at the Close of Business December 30, 1950 RESOURCES Loans and Discounts $ 1,422,974.14 U. S. Government Bonds.. Other Securities 1,088,855.22 802,177.97 Furniture and Fixtures .. 14,162.74 Cash and due from Banks 992,102.27 Other Assets _ TOTAL 766.30 $ 4,321,038.64 ( Capital LIABILITIES $ 100,000.00 Surplus _„ 150,000.00 Undivided Profits Reserves . DEPOSITS . TOTAL 62,831.60 8,017.88 4,000,189.16 $ 4,321,038.64 Total Resources of Trust Department $1,197,000.00 not included in above figures. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ( http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * JteContiek* 1 appraaiat* jraur mice letter of %>rii 9 with raapeot to my st£t«M&at s® the ocduiiiafi of in Annual St*t«*ani and ft oop/ 01" jrour I&tast Tffll C^ M^B 1 «• lookiiif forsmr«i to raading with & gntet d«ai of in tares t« .» Martin, F, HcCormiek of the Board of Richmond f Virginia FEDERAL R E S E R V E BANK OF R I C H M O N D CHARLES P. M C CORMICK . CHAIRMAN OF THE BOARD ._ _ Apri-L V, The Honorable William McChesney Martin, Jr. Chairman, Board of Governors Federal Reserve System Washington, D. C. Dear Mr. Martin: The statement made by you on April 22 when taking your oath of office was indeed most impressive. If you believe the last paragraph of this oath as sincerely as I am sure you do, then you and the writer will see eye to eye on many things. After all, our country's good comes first and no party line thinking should interfere when we are doing public service. Under separate cover, I am sending a copy of our Annual Statement and my latest book, The Power of People, which will show you why I am happy to see you make such a challenging statement. Kindest personal regards and best wishes for your success. I assure you that you may call upon me at any time to assist you in whatever way I can be of help. I shall look forward to seeing you in the Richmond district, and while I will be away for over 2-| months as United State3 Employer Delegate to the International Labor Organization Conference in Geneva for my third year, I shall be back early in the fall and hope that I may have a few minutes chat with you at that time. I will see you, of course, at the Chairmen's Conference, but you will be too busy then to give time to everyone. Sincerely, f Charles P. McCormick, President McCormick and Company, Inc. McCormick Building Baltimore 2, Maryland http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Hr» KeCoraiekt wieb your wire on ay taking tip ^ look forward id g«itiaf b«ti«r «d with trouble to d© this* Mr* Cba: f^Hiwral I*»0rTe http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of lE 1951 APR 3 WU K076 PM 5 02 PD WUX BALTIMORE MD A P R I L 2 1951 40}P FEDERAL R E S E R V E . SYSTEM HONORABLE W I L I A M MCCHESNEY M A R T I N CHAIRMAN BOARD OF GOVERNORS FEDERAL RESERVE SYSTEM WASH I NGTONDC CONGRATULATIONS UPON YOUR APPOINTMENT AS CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM I KNOW YOU WILL CONTINUE YOUR OUTSTANDING WORK FOR THE GREATER EFFECTIVENESS OF THE SYSTEM AND ITS HIGH PRPOSES PLEASE CALL ON ME TO BE OF SERVICE TO YOU IN ANY WAY POSSIBLE CORDIALLY CHARLES P MCCORMICK CHAIRMAN http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FEDERAL RESERVE BANK OF RICHMOND Bear Jficki Hem nice of yoat to taka the trouble to vrlt« - ~. 0?*n« Juirt tnat w*r» I just r*tv;rr»«H frois a pl^a^ant w©«fc~af*d vitli und Su® In Scath Carolina. n^d-hiJ: ^olf Is AS g-'-o-d ms «v*r* We spoke irf* ^m end figured so matter few m&i trmibl® w^ w^rt im, ym ^rebafely In »&r«* Cyathi* Join* at is t«-«t wi«^-» to yoet (Hid Hl«ii «a4 1 irtli l©-Qk f 3r;:«ani te se^inf you la th* sot too d!0t«Kt fbtur«« http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r '-ordl^ily y^ir», UNITED STATES HIGH COMMISSIONER FOR GERMANY APO 757-A, Frankfurt March 26, 1951 Dear Bill: I have just learned that you have been made Chairman of the Federal Reserve Board, and I hasten to send you my congratulations. There are few positions in the United States that carry with them such importance, dignity, and the opportunity to preserve the welfare of the nation as the Chairmanship of the Federal Reserve Board. You have had many jobs of great responsibility in the Government and in finance but I suppose this one tops them all. Everyone who knows you and has worked with you, knows that you will bring to the task the best skills, industry, and integrity. I am delighted you have this position, particularly in this difficult period. Ellen joins me in this letter and we both send our very best wishes to you and your wife. Sincerely, The Honorable William McC. Martin Chairman Board of Governors of the Federal Reserve System YJashington 25, D. C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dear Mr. McCandl©ss; How nice of you to take the trouble to write rue, an1 I will do my best to justify your co I am sorry I have not become better acquainted with you, arxl hope to see you from time to time. Sincerely yours, tfm. McO. Martin, Jr. Mr. R. D» McCandlass 5420 Connecticut Avenue, H*W, Washington, D« C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis it. B. OTcCAIVDLESS 5420 Connecticut Ave., N. W. Washington 15, D. C. March 17, 1951. Dear Mr. Martin: I wish to be among the many who extend their felicitations as you undertake the enormous task of Chairmanship of the Federal Reserve Board of Governors, It is one of the most important posts in our country but there will be a feeling all through the nation that experience, ability and disinterested devotion have been brought to bear in your appointment. May you have the success you richly deserve and achieve the result the country needs. Sincerely yours, R.B. McCandless Mr. William McG. Martin, Jr., Assistant to the Secretary, Treasury Department. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dear Thanka a 1st for your good wishes* t*y Job Is & wry s^riois t as 7011 knovr^ so I do taking the trouble to vrlte* Sincerely yours, IfcC, Macriin, »J *fr» ^Qseph H« BtogiB'it' 106 Sturgftt Msmflsld Ohio ir^ . . . . . 106 Sturges ave; Mansfield, Ohio Liar oh 16 1951 I.Iy Dear G-overnor: Just read of your new job as Chairman of the Federal Reserve Board, ITo need to mention that I am more or less very pleased to hear of the announcement and your good fortune. I sincerely hope and trust you will continue to go forward. Sincerely Joseph H. Ifugent Mr. W. I,lc3. Martin Assistant Secretary of the Treasury; / f http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ^X*-Wv« Duar ?Ji»iiifllMlt' flicks a lot for your I'y wishes* Job is a vary serious responsl~ bllityt as you knc«9 so "I do appreelste ycui* taldJTg the ipoable "uo m*it©» Slncerely yo'urs^ ESTABLISHED LAIDLAW 25 BROAD 1842 & NEW Y O R K 4, CABLE CO. STREET N. Y. ADDRESS: TELEPHONE: DlGBY "LAI DLAW 4-39OO 16 March, Hon. William McChesney Martin Jr. Assistant Secretary of The Treasury Washington, D. C. Dear Bill: May I offer you my sincere congratulations on being nominated to the Chairmanship of the Federal Reserve Bank. I can assure you that the announcement was received enthusiastically by all those with whom I have spoken and, as Mr. McCabe stated, never before in the existence of the Federal Reserve System has the country ever had greater need of the wise and judicious exercise of its powers, which under your leadership I feel confident will occur. You have all our very best wishes in your new undertaking. With kindest regards, and hoping to see you soon, believe r,ie Very sincerely, LWN:aes http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Louis W. Noel Star danr» m It- m® kim dl" Jim wia f^J^r la «rlt*tteffXJtth a0&o ay n«w ^pslata^at* 1 «f«ali®lji0 far t&* ^o^a/ la r^«p^diag but «itic«i I a»« p0rs^% jrou «ou34 imdi9rttt«^d* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis six $-x>d vi«dii«i^ jfaiir% Bs* 1(90* lKTlS% JT* in r 3O4O DUMBARTON AVENUE http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WASHINGTON 7, D . C . http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Hr* Haw n&ee of yoa to tak». the t ST It e .s»^ I ii&tW «!\' . 'Visits «ia mill 3 ta M- -e fcs ia I . VOJQT to s^«^ ^au £****« -?t* &?€* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis March 29, 1951. William McChesney Martin, Esq. National Reserve Board Washington, D.C. My dear Mr. Martin, Please accept my heartiest congratulations on your appointment to the National Reserve Board. They should be very proud to have you there. Sincerely yours, Mauricio Nabuco Brazilian Ambassador X April 9» Wa- How &ice to hoar forget oyp iaa In. kind •«dOJL look jto^^ra to ^sit^og sitfc to tiaa as 2gr» lly Jar, Mr* Eax B* ^aiss, fiat mfcCMtb http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5900 UNITED STATES DEPOSITARY ROBERT RODES. PRESIDENT MAX B. NAHM, VICE PRESIDENT T. H. BEARD, CASHIER F. H. MOLTENBERRY, ASST. CASHIER J. N. PRINCE. ASST. CASHIER S. C. HUTCHESON, ASST. CASHIER BOWLING GREEN, KY. April 3, 1951 Gov. William McChesney Martin, Jr. Chairman of the Federal Reserve Board ?/ash ingt on, D. C . My Dear Governor: Please allow me to congratulate you and also the Federal Reserve Board and the Country at large upon your accepting the Chairmanship of the Washington Federal Reserve Board. I have watched with pride your career in being President of the New York Stock Exchange, then of the Export-Import Bank, and Assistant Secretary of the United States Treasury. Now you have topped it all with the new honor that has been bestowed upon you. Little did either of us dream when we used to discuss things in St. Louis that all this would fall to your ability. Personally, I have known Governor Marriner Eccles quite well, and I am very glad that he is still on your Board. You will recall that the last time I saw you was at the Frank Kennan Dinner in Louisville, Kentucky. With my best personal regards and the certainty on my part that you will be a great success in the position that you now occupy, I am your friend Max B. Nahm MBN/ep DKLOS fT. XKEDIIAM <;J-:NI-:RAL cot:xsi-:t. A>IJ:RICAX BAXKKRS ASSOCIATION Digitized for719 FRASER 15th Street,N W..Washington 5,D.C. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I- ' How nice of /on to sand ae the beautiful t«* la th« I am daXts^iM 3r>yt eoii!4 atteai tfcs e«reaoogr *ad will look forward to warkiag witb yoa la thft period Mir* Uftloji J* ! http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NHM t* &* C« r*iy to tha ftid&ral l^^rw ^sor cordial «TK! «iti* j^« ^it« you ret'i^fi fro® ar* 3»rt»f and I tottrg about you frs^ HKitu*l * lot of in Atlanta* McC. Il»rtl% Jr. ** Hswak I* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis af FEDERAL RESERVE BANK OF ATLANTA FRANK H.NEELY CHAIRMAN OF THE BOARD . ._ AP J » •* FEDERAL RESERVE ASEIMT http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. William McChesney Martin, Jr., Chairman Board of Governors of the Federal Reserve System Washington, D. C. My dear Mr. Martin; I was highly pleased to have the wire from the Board yesterday, advising me of your having taken office as a member of the Board of Governors, and having been designated by the President as Chairman for four years. While I have never had the pleasure of meeting you, 1 have watched your career with great interest, and I am sure that the Federal Reserve System is going to broaden and increase in its influence under your direction. I have been on the Atlanta Board almost exactly the same length of time that Tom McCabe was on the Philadelphia Board, and we have both always had in our minds the broadening of the System's influence through the Banks, as well as through the Board of Governors, and I hope that, as you analyse the possibilities and responsibilities of the System you will feel the same way about it as we do, and help foster the development of better personnel and broader influence in the twelve Banks than they have ever had in the past. Unfortunately I have to go to Europe on the first of May, and will not be able to be at the Chairmen's meeting the following week. However, our Deputy Chairman, Dr. Rufus Harris, president of Tulane University, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Wm. McChesney Martin, Jr. April 3, 1951 of New Orleans, will attend, and you will find in him a man of great interest, breadth, and enthusiasm for the work of the System. Looking forward with a great deal of pleasure to meeting you personally, and hoping that as soon as I return from Europe in June we can arrange for you to come and visit with us here in Atlanta, I am Very sincerely and cordially yours, FHN:cwcc http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D*tar B.fc»* How nie*t «f ycm 10 tace tii-t trouble to Hrita m&m I ha^« re*r«tt«d v*i*y auch siy ln«blXitj to *tt*nd t H • - «nk a«eiv-n^s t.,;,t llm* 'fews a way of <?*ttin& «w«y Ir^a pa»» I «njoj«d oar association very aaicli an-d will feop« to hm^« a. ehaae« to visit irith you ia th« not too ti»tant future* Sincer«ij ycwrst - . • INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT WASHINGTON 25, D. C. March 29, 1951 Dear Mr. Martin: Ibank you very much for so kindly asking me to be present at your swearing-in ceremony on the 2nd April, I should^e^delighted to attend if I were going to be in town, but, unfortunately, I shall be away from Washington on Monday. I was hoping to be able to congratulate you at one of the Board meetings, but as you have attended none since my return, my congratulations have got very delayed. Better late, of course, than never; so may I offer my most sincere congratulations on your new appointment. Whoever directs the Federal Reserve System directs American monetary policy and whoever directs American monetary policy directs the monetary affairs of the world/ The fact that you have been my colleague even for a short time enables me to bask in reflected glory; and my happiness at your appointment, therefore, is not altogether unselfish.' Yours sincerely, B.K. Nehru Mr. Ytfilliam McChesney Martin, Jr, Chairman, Board of Governors Federal Reserve System Washington, D.G. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bear Bob? Thank you for your good wishes and for nendifig me the very nic« ooesaonts you ®&de on. your broadease. Unfortunately, I did not hear this one, but have heara several and think th0y are very good* I recall with pleasure tlie i^landid work you did in tiie WPB and aduired ^^ery nuch the way you handled yourself in rather difficult situations with Geaerml My best as aluays, Sincerely yours, Ki% Sobert R. Nathan Robert R. Hatlmn Associates, Inc. So* 3 Thomas Washington 5* ROBERT R. NATHAN ASSOCIATES, INC. CONSULTING ECONOMISTS NO. 3 THOMAS CIRCLE CABLE ADDRESS M a r c h 19 1951 NATECON http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WASHINGTON 5, D. C. NA-noNAi. 863O Mr. William. McChesney Martin, J r c Assistant Secretary of the Treasury Washington 25, D. C. Dear Bill: Congratulations and very best wishes in your new assignment. The marked section in the attached copy of my network broadcast might be of interest to you. Cordially, Robert R. Nathan http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Final Draft CIO Broadcast March 17, 1951 Good evening: Those who rent houses and apartments were given new hope this week when the Administration indicated that a new rent control law would be submitted to the Congress, Actually, effective rent control is not likely until around the middle of the year. In the meantime, half of the non-farm rental units in the country will not be subject to any control and that means higher rents. Even those rental units now under control will move up because it is an unsatisfactory law. Talk about stabilising the cost of living doesn't ring true with the cost of shelter on the loose. Rent is a big item in the cost of living. The lack of real rent control can be laid on the doorstep of Congress. The Administration has tried to get authority to protect tenants. Tighe Woods, Housing Expediter, sincerely hopes for a rollback in rents. If the experience with price control is any criterion, this is a futile hope. The whole trouble with our stabilization program is that we lock the barn http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis after the horse has been stolen. We only talk about rollbacks. In reality, all those who sell goods and services are given plenty of warning to push their prices up to unconscionable levels before controls are imposed. Inflation is invited and then it is given a stamp of Government approval. We proceed theoretically to freeze prices at arbitrarily inflated levels. Then, further adjustments are made under the socalled freeze and they are nearly all upward adjustments. So prices go up even higher. This has happened in price control and it will happen in rent control unless the consumers and the tenants put up a better fight than they have in the past. The Price dministrator, Mike DiSalle, de- serves the appreciation of all of us in his determined stand on controlling the price of cotton. It is too bad similar toughness isn't being shown on prices of all goods. Despite heavy pressure, Mr. DiSalle has placed a ceiling on raw cotton. This is a very liberal ceiling, with the price of cotton at about 125 percent of parity. Even at this inflated level, many members of Congress and various representatives of the cotton interests fought against the price ceiling. Either we are going http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to nave price control or we aren't. Cotton growers will be able to get along very well at the present high price set for cotton. They will not only get along well but they have plenty of incentive to increase their acreage and produce more cotton. Probably cottoa farmers are not so strongly opposed to this ceiling on cotton prices as are their paid or elected representatives. Another illustration of crying about the ill effects of inflation but refusing to face up to the need for controls was demonstrated this week by the bankers. At the meeting of the American Bankers sso- elation, many bankers spoke against credit controls. They know very well that the expansion of credit is inflationary. It adds to buying power. It is an important factor in pushing up prices. They know that one of the principal causes of inflation in recent months has been the huge increase in credit extended by bankers to business for inventory accumulation and for many non-essential expenditures unrelated to mobilisation. For a time leaders in the banking community urged voluntary restraint upon their associates. Now even that limited offer of cooperation in fighting http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .4 - inflation appear* to have disappeared. It is certainly unfortunate that this very important segment of our economy has not taken a statesmanlike position in the battle against inflation. In the face of all the scandals and news of bad appointments coming out of Washington these aays, it is encouraging to note that one very good appointment has been made, namely, that of V illiam McChesney Martin, Jr., as chairman of the Board of Governors of the Federal Reserve System. Mr. Martin is a young man with lots of ex perience and ability. He has been president of the New York Stock Exchange, head of the Export*Import Bank and Assistant Secretary of the Treasury. In all of these positions, as well as in responsible military assignments during World War II, Mr. Martin has not only done a good job but he has acquired background and knowledge which will stand him in good stead in his new important role. Perhaps Mr. Martin's appointment will bring about a better coordination of monetary . and fiscal policies in the Government. He has the prestige and ability to achieve mmsM harmony and, more important, to develop an effective anti-inflationary http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis financial policy. Oae of the first and most important decisions made in Washington last summer when we started on our enlarged preparedness program was to expand our total capacity to produce. It has been clear for some time that certain key industries had to be expanded even for peacetime prosperity. Bottlenecks which had prevailed even before Korea became much more serious under the mobilisation program and new ones appeared. America was faced with the choice of meeting military needs at the expense of civilian output or of expanding total capacity so as to minimise the impact oil civilian production. The decision was in the direction of all-out expansion. At first, there was a flurry of activity toward increasing the supply of steel and aluminum and copper and other products necessary for war and peace. The Hurry has died down. It is obvious that we will be stronger if we are able to produce more. It is equally obvious that the impact of mobilisation on the civilian economy will be less severe if our productive capacity is greater. It is obvious that inflation can be more readily overcome if total production is increased materially. It is also obvious that all-out mobilisation in case of total war http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis will be more successful if bottlenecks are overcome mow. There is every justification lor going full blast to speed up the expansion of our industrial and mineral and power resources. Unfortunately, it appears that the expansionists--those who are in favor of increasing omr productive capacity--are not now in the saddle. Caution is replacing daring. Complacency is replacing urgency. There is worry about the possibility of having too much steel and aluminum and other materials. There is a revival of the thinking of some people in 1940 who were afraid that we would have a depression after mobilisation and that we would have too many plants. Of course, if we resign ourselves to the inevitability of depressions, we might as well have no expansion at all because even some existing facilities, let alone additional ones, would be idle in a serious depression. On the other hand, if we have confidence in the future of this country and in our ability to maintain prosperity, we need not worry about excess capacity to turn out steel and other basic materials. Caution won't win for us the fight to retain our world economic leadership nor the fight against http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 7- inflation at home. Yet, this dangerous typeiof thinking is on the increase and la very important places in v ashington. Instead of confidence and a sense of urgency, which are so desperately needed in the present emergency, smugness and timidity seem to prevail. That is bad and changes are needed. ( B E E A K) How for the special topic of the week--the business outlook. During the past week I have been visiting around the country in industrial areas like Milwaukee, Chicago and Cleveland. Aside from complaints about the hard winter and continued cold weather, one of the most popular subjects of conversation is the over-all business outlook. There is talk about the possibility of deflation and a failing-off in business in the months ahead. These doubts are sup- ported by the fact that military orders are still com* ing along quite slowly, especially for the medium and small manufacturers. Inventories are very high. That is true at the manufacturer's level as well as for the wholesaler and the retailer. In many lines the consumers aren't buying as heavily as was expected. There seems http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to be more consumer resistance to high prices. Some businessmen are beginning to get a little bit worried over the possibility that they may have priced too many consumers out oi the market. Retail sales reports are not uniformly good. For some lines, sales are discouraging. The drop in the stock market did not help the business man's psychology, either. Above all, the business community has very little confidence that V ashing ton knows where it is going. Those businessmen who go to 'u ashington lor advisory board meetings or to get clarification of various orders, or to make appeals for exceptions, come back to their communities with fantastic stories about chaos and confusion and red tape. They all agree tiiat this time the confusion is much worse than it was in World w'ar II. They can't very well blame the Hew Deal **©w because the show is in the hands of business. The lack of a goat is rather frustrating. It is this Washington confusion which is creating so much doubt and uncertainty in the minds of businessmen everywhere. Business in a period of military mobilization should be exceptionally good. The addition of - • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis military demands on top of a prosperous peacetime economy should bring about sustained full employment and prosperity. Actually, we have had such prosperity and inflationary pressure for many months now. It ought to continue. However, the lack of programming and intelligent planning and workable controls along with an unjustifiably slow rate in contract placement by the aro ed forces have brought fear of distortion and disorder in the economy. Every one talks about the cutting down of civilian production and increases in military production. Actually, there has been very little curtailment in civilian production to date and very modest increase in military production. Threats of crackdowns on non-essential output appear in the papers every day but little happens. Small business is kept off balance by alternating toughness and relaxation of controls. It is fortunate that civilian putput hasn't been drastically curtailed because military production hasn't increased enough to take up any sizable slack. We are not getting militarily strong very last. The business community does not produce weapons of war without having contracts and the total contracts . . ~, e http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 10 - placed to date are inadequate for a big effort in the months ahead, tip to now we haven* t had much in* crease in military production, and the groundwork hae not been laid for future increases in major degress. A little disorder and a little inflation might not be too big a price to pay for preparedness. But they are a big price to pay if we don't achieve military strength. We aren't getting very far very fast and we still are paying a big price. We may have some slackening in general business activity and in employment and production unless there is a quickening in the rate of military procurement and military production. However, it is not likely to be serious in degree or in duration. It wouldn't happen at all if we had some intelligent planning and programming which coordinated expansion in total production, increases in military output and some curtailment in civilian output. The mobilization job requires a good deal of intensive work in Washington. There isn't much evidence that such intensive work has been done or is being done. Until a much better job is done by the mobilisation authorities, there will continue to be confusion •r http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - il • and uncertainty and, worst of all, a lack oi sense of urgency around the country. We might even have a temporary drop in output at a time when every ounce of our economic power ought to be used. This need not happen and should not happen. The major problem ior the country continues to be one of military security and preparedness. Until we have a clearer idea of where we are going and how we are going to get there, we will achieve neither economic stability nor the high degree of preparedness which our tremendous resources ean assure. Our biggest deficiency is in good leadership. Thank you and good night until next week at the same time.
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