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M IN U T E S O F T H E M E E T IN G O F T H E E X E C U T IV E C O M M IT T E E O F T H E F E D E R A L A D V IS O R Y C O U N C IL June 7, 1944 At 11:15 A. M., the Executive Committee of the Federal Advisory Council convened in the Board Room of the Federal Reserve Building, Washington, D. C., on Wednesday, June 7, 1944, the President, Mr. Brown, in the Chair. Present: Mr. Edward E. Brown, President; Mr. Charles E. Spencer, Jr., Vice Presi dent; Messrs. John C. Traphagen, William Fulton Kurtz, Robert V. Fleming, and Walter Lichtenstein, Secretary. The Secretary stated that he had a letter from Mr. Huntington that he would not be able to be present at this meeting of the Executive Committee. Mr. Fleming presented a letter written to him under date of June 1,1944, by Professor W. Y. Elliott, Vice Chairman of the War Production Board's Commission for Civilian Requirements, in which he stated that he is certain that the Essential Activities Com mittee will see to it that “within the next few days, banking has been added to the rela tively few community services and trades which may be declared ‘locally needed’ by Area Manpower Commission Directors without securing approval from the National Office of the War Manpower Commission.” A discussion took place regarding the proposed amendment to Section 13 B of the Federal Reserve Act. The feeling prevailed that the Federal Reserve Banks should not have the right to initiate loans. Mr. Fleming reported that he and Mr. Robert F. Leonard, Director of the Division of Personnel Administration of the Board of Governors, had presented oral arguments on behalf of the banks both before Selective Service and the War Manpower Commission. The meeting adjourned at 11:55 A. M. WALTER LICHTENSTEIN, Secretary. 10 MINUTES OF JOINT CONFERENCE OF THE EXECUTIVE COMMITTEE OF THE FEDERAL ADVISORY COUNCIL AND THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM June 7, 1944 At 12:00 o’clock noon, a joint conference of the Executive Committee of the Federal Advisory Council and the Board of Governors of the Federal Reserve System was held in the Board Room of the Federal Reserve Building, Washington, D. C. Present: Members of the Board of Governors of the Federal Reserve System: Vice Chairman Ronald Ransom; Governors M. S. Szymczak, John K. McKee, Ernest G. Draper, and R. M. Evans; also, Messrs. Lawrence Clayton, Assistant to the Chairman; Chester Morrill, Secretary of the Board of Governors; Liston P. Bethea and S. R. Car penter, Assistant Secretaries of the Board of Governors; Walter Wyatt, General Counsel; J. P. Dreibelbis, General Attorney; E. A. Goldenweiser, Director, Division of Research and Statistics; William B. Pollard, Assistant Director, Division of Examinations; Edward L. Smead, Director, Division of Bank Operations, and Robert F. Leonard, Director, Division of Personnel Administration. Present: Members of the Federal Advisory Council: Mr. Edward E. Brown, President; Mr. Charles E. Spencer, Jr., Vice President; Messrs. John C. Traphagen, William Fulton Kurtz, Robert V. Fleming, and Walter Lichtenstein, Secretary. The President of the Council reiterated the position of the Council that it is entitled to information on proposed legislation in advance of its introduction into the Congress. A discussion took place, and it was agreed the point raised by the Council would be con sidered at the full meeting of the Board of Governors which would reach some definite decision. A discussion took place regarding the proposed amendment to Section 13 B of the Federal Reserve Act. Some of the Federal Reserve Banks eventually will desire to have the right to initiate loans to which the Council is opposed. It was pointed out that the proposed bill did not give the right of initiating loans to the Federal Reserve Banks. A discussion took place regarding the International Monetary Fund and the proposed International Bank. The President of the Council stated that the Executive Committee meetings for July and August would be omitted unless either the Council or the Board should request a meeting. The meeting adjourned at 1:25 P. M. WALTER LICHTENSTEIN, Secretary. 11 NOTE: notes T h i s t r a n s c r i p t o f the S e c r e t a r y 's i s n o t to b e r e g a r d e d as com plete or n e c essa rily accurate. The tra n sc rip t sh o uld be c o n s i d e r e d a s b e i n g s t r i c t l y f o r the sole u s e o f t h e m em bers o f the F e d e r a l A d v is o r y C o u n cil. W. L . S e cre ta ry *s notes C o m m itt e e o f Jun e of 7, the The o n t h e m e e t in g o f the E x e c u t iv e t h e F e d e r a l A d v i s o r y C o u n c il on 1944, a t 1 1 :1 5 A . ?£., i n Federal Reserve B u ild in g . Secretary stated fro m M r . H u n t i n g t o n to b e present at t h e Board Room th at he had had a letter t h a t h e ?/ould n o t be a b le th is m e e t in g o f th e E x e c u t iv e C o m m it t e e . The fo llo w in g were Traphagen, BROffM K urtz, present: F le m in g , stated he understood V ic e Council in i t 3 r e q u e s t to be before i t i s i n t r o d u c e d aembers o f the B o a r d s sible at the p r e s e n t entitled to f u l l KURTZ g iv e n in to of tim e . Congress. FLEMING i n f o r m a t i o n on proposed l e g i s l a t i o n The The C o u n cil the e le c t iv e sh o u ld r e i t e r a t e th e p o in t t h a t i t is Bro?m . p resents a le t t e r w ritte n E llio tt, V ic e for C i v i l i a n R e q u i r e m e n t s sential A c t i v i t i e s 19 LU, by i n w h ic h it see is s t a t e d t h a t h e i s c e r t a i n th a t the E s to i t t h a t **w ithin the n e x t few d a y s , t o t h e r e l a t i v e l y fe w com m unity s e r v ic e s a n d trad es which 1l o c a l l y securing a p p r o v a l f r o m to h im u n d e r da te o f J u n e 1 , C h a i r m a n o f t h e W a r P r o d u c t io n B o a r d *s Commission C o m m it t e e w i l l b&nkinr has b e e n a d d e d may be d e c la r e d s u g g e s t i o n to a b o l is h F e d e r a l R e s e r v e Banks i s n o t p o l i t i c a l l y pos in fo rm a tio n . agrees w ith M r. Professor W . Y . Brown, S p e n c e r , C h airm an Ransom sym pathized w ith the full the l o c a l M essrs. a n d th e S e c r e t a r y . needed* b y A r e a M anpow er Com m ission D ir e c t o r s w ithout the N a t io n a l O ffic e o f t h e W a r Manpower C o m m is sio n ." AMgfiMBiT TO 1 3 B KURTZ. loans, banks and in some le?=il l i m i t . He in is a fra id even if there s m a l l to w n s w i l l n o t w i s h cases go co uld n o t Pro bably b ig that c r e d it s h o u ld r e m a in in for 10 is to per b a n k s w ould w ish in each a g u a r a n t e e o f 9 0 p er cent on the take even 10 p e r cent o f the loan c e n t a s t h i s w o uld be over t h e i r to go i n b u t t h e r e i s a f e e l i n g l o c a l i t y w h e r e th e b u s i n e s s i s situ a te d . -2 — IURT2 p r e s e n t e d a memorandum from M r . W il l ia m s o f the F e d e r a l R eserve gank of P h i l a d e l p h i a , c o p y o f w h ic h aS strictly c o n f i d e n t i a l . BKQPN and TRAPHAGT1I right to i n i t i a t e l o a n s . KURTZ feels if is attached hereto . T h is should be regarded do n o t b e l i e v e F e d e r a l R e se rv e Banks should have the Federal R e s e r v e B a n k s a r e g iv e n th e power to i n i t i a t e loans they are l i k e l y to b e f o r c e d to make l o a n s i n sm a lle r l o c a l i t i e s to b u s in e s s e s whether they w is h to do s o o r n o t . Re s u g g e s t s t h a t th e E x e c u tiv e Committee sight ask th e B o a rd h o w i t BRO' N up at th is feels say s h e u n d e r s t a n d s about the m atter. t h e am endm ent to 1 3 B i s n o t l i k e l y to be brought se ssio n o f C o n g r e s s but FLEMING sa y s h e h a s been t h e r e may be h e a r i n g s on R e g u la t io n Q . in f o r m e d b y a S e n a to r t h a t the Maybank B i l l would not g e t o u t o f c o m m i t t e e . BRO' N r e p l i e s that t h e M aybank b i l l may n o t be v o t e d out o f com m ittee, but Vagner may h o l d h e a r i n g s . MANP0JTR FLEMING r e p o r t s both S e l e c t iv e * illia a Y . th at he Se rv ic e E l l i o t t w ho i s from E l l i o t t and M r. m ost s y m p a th e tic . to w h ic h r e f e r e n c e SECRETARY r a i s e s L e o n a r d p r e s e n t e d o r a l arguments b e fo r e a n d w a r M an p o w er C o m m is sio n . is m ade a b o v e . q u e s t io n w hether there aeeting in J u l y a n d A u g u s t . any scheduled m e e t in g i n It is He t a l k e d to P r o f e s s o r He r e a d the l e t t e r he r e c e iv e d agreed sh o u ld be E x e c u t iv e Committee t h a t t h e r e s h a l l no t be e it h e r J u ly or August, b u t i f n e c e s s a r y one can be c a lle d . He a l s o b r o u g h t u p th e m atter o f loan s to ban k o f f i c e r s c o n ce rn in g which M“ . H u n tin g to n h a d s e n t some m a t e r i a l a n d a s u g g e s t io n made by M r. George M. ^allace in r e s p e c t to FLEMING says i t c la rific atio n in w o u l d b e v e r y i n o p p o r t u n e a t t h i s tim e to r a i s e the question o f p r o l o n g i n g b e y o n d J u n e 1 5 coapelled to r e p a y l o a n s this icind i s made i t t h e la n g u a g e o f 1 3 B . to sh o uld the come fro m the *ro« the banks themselves. The meeting adjourned d a t e w hen bank o f f i c e r s w i l l be t h e ir re sp e ctiv e at 1 1 :5 5 P* M. banks. If a n y su g g es tio n o f s u p e r v is o r y a u t h o r i t i e s and not -3- On June 7 , 1944, Noon a j o i n t m e e t in g a t 1 2 :0 0 o f t h e E x e c u t i v e C o m m itt e e o f th e F e d e r a l A d v is o r y C o u n c il and the Board o f Governors o f th e F e d e r a l R e s e r v e S y s te m w as h e l d i n t h e Board Room o f D. the Federal Reserve T h e f o l l o w i n g m em bers o f w ere p r e s e n t : Kurtz, M essrs, F le m in g , the E x e c u tiv e Brown, Spencer, M cKee, V ic e Draper, M o rrill, re ite ra te d from t h e B o a r d o f and E v a n s ; a ls o , M essrs. C arp enter, W yatt, P ollard, the p o s it io n of He p o in t s out that the th is He said such i n f o r m a t i o n m i g h t w e l l •ras m entioning t h i s in be C o u n cil th a t i t co n n e c tio n w ith favorable c o n s i d e r a t i o n insist upon i t s MCKEE to the t h is m atter p o in ts o u t in that a c co rd a n ce w ith in c o n fid e n c e. proposed b i l l 13B. e n title d in t ro d u c t io n th e l a w . He s a i d h e tc r e g u l a t e h o l d i n g H e h o p e s t h e Board w i l l g iv e in a s m u c h a s t h e C o u n c i l w i l l h a v e the p ro c e e d in g s consequence, not present a t t h e m e e t i n g , RANSOM. He f e e l s the point r a i s e d b y t h e re.-ch some d e f i n i t e are there the advice o f the C o u n c i l is to support o f the C o u n c i l . Fhat seeks w i l l ■atter o f c o o p e r a t i o n a n d h e be is the Board s h o u ld gre- t l y v a l u e the h e l p out it co o p eratio n. is im p o r t a n t i n h i s B o ard i t has o p in io n i s t h a t the C o u n c il as a body w i l l B o ard *s of re tic en ce , th e the o b se rv e t h e Governm ent w h e r e th e b u t in a l l other cases the C o u n c i l . t h a t w h e n r e g u l a t i o n s w e r e t o b e d r a f t e d u n d e r th e c o m m ittee s o f any b re ac h o f c o n f i d e n c e . tutory r i g h t s , H e says f u l l B o ard w h ic h w i l l th e p o s i t i o n o f t h e s it u a t io n s w ith in the p o in ts that be h e lp ed and a s s is t e d i f c e rta in d e lic a te i n h a v i n g th e B o a rd o b t a in o f proposed le g is la t io n . taken up by the e v e n m ore Council w o u ld f u l l y u n d e r s t a n d kuucin^ Act o f 1 9 3 5 , advantage in tro d u c tio n He r e it e r a t e d is even t h o s e who were c o g n i z a n t o f w h a t w as s a i d . C o u n cil w i l l be it o f th e l a s t m e e t in g w e r e r e c o r d e d m em bers o f t h e B o a r d , a d e fin ite d e c isio n * There w i l l all fu lly befo re in any l e g i s l a t i o n w h i c h F L Y IN G in is its p o in t o f v i e w . in fu ll and t h a t , confidence. is in advance o f g iv e n companies and th e p r o p o s e d am e n d m e n t t o C layto n, D re ib e lb is, Sm e ad , and L e o n a r d . to full in fo r m a t io n o n p r o p o s e d l e g i s l a t i o n into C o n g re ss. Traphagen, C h a ir m a n R an som , G o v e r n o r s S zy m c z a k , Bethea, G o ld e n w e ise r, Com m ittee and th e S e c r e ta r y . The f o l l o w i n g w ere p r e s e n t Governors: BBQ'fl B u il d in g , W ashington , C. the A. He ag rees m uch b e t t e r if B. A. w ere th at w h ile the w h o le c o n su lte d and th e re never the C o u n cil h as c e r t a in su b je c t is t r e a t e d a s one RANSOM says that M r. Retaliation Q w e r e g o i n g K u r t z w as o f th e g r e a t e s t h e l p when the h e a rin g s on in th e H o u se o f R e p r e s e n t a t i v e s . He s a y s, ott caUr? e, he i s s p e a k i n g p u r e l y a s an i n d i v i d u a l a s the m a tte r has not been Ukta up by the B o a rd a s a w h o l e . to BfiQVN iib understands B o a r d h a s made i n q u i r i e s o f the F e d e r a l Reserve Ranics in r e s p e c t to 1 3 B . H e s a y s t h a t one o f t h e F e d e r a l R ese rv e Banks ► n asked i t s member on t h e F e d e r a l A d v i s o r y C o u n c il to r a i s e the q u e s t io n . RANSOM says t h is 0ut before l e g i s l a t i o n DRAPER a n tic ip a te is is the k i n d o f m a t t e r w h ic h o ugh t to be thrashed in tro duced. says he h as h a d c o r r e s p o n d e n c e w i t h S p r o u l b u t h e does not in Congress an y e a r l y a c t i o n up with the C o n f e r e n c e o f P r e s i d e n t s Open Market C om m ittee t h e v a r i o u s RANSOM pected. says i t is SZYMCZAK p o ss ib le says t h i s in the r e p o r t . He d id n o t KURTZ of the *139 says th e F e d e r a l m illio n originally cam e. to b e of P h ila d elp h ia w i s h e s itiate lo a n s . He g iv e n a n o u tg r o w th o f t h e Baruch- to im p le m en t th e p r o p o s a ls made B a n k o f P h i l a d e l p h i a w an ts each share b ac k to he o bjected . the b a n k from w h ic h th is w o u ld be Bank o f P h i l a d e l p h i a terns in ’?hich t h e banks cent of the l o a n . But he co uld n o t p o in ts the money d o e s n o t a g r e e - the F e d e r a l Reserve Bank th e F e d e r a l R eserv e Banks b e lie v es the Federal R e s e r v e is any bank h ad Reserve Then - w h i l e to take in t o both houses o f Congress. Board was asked th in k plans t h e r e may b e e a r l i e r h e a r i n g s than ex w h o le m atter and the He p roblem s r a i s e d . A b i l l has been in tro d u c ed Hancock R e p o r t , on t h i s m a t t e r . o f tlie F e d e r a l R e se rv e Brinks and the a is gre to h av e the r i g h t to in t m ista k e . that t a k e on p a r t i c i p a t i o n out after a ll The claim there are sin g le of in d u stry even up to 10 per b a n k s in l a r g e r c i t i e s could take on su c h p a r t i c i p a t i o n . BPjCTN p o in ts provisions in t h e out b ill that d ire c t proposed Tederal R eserve B a n k 3 a r e r e a l l y MORRILL s&7 ,rs t h e 5“" Tork and P h i l by l o a n s w o u l d n o t be i n a c c o r d w ith the the B o a r d . T h e p r e s id e n t s o f the s u g g e s t i n g a v e r y r a d i c a l amendment. su g g es tio n s m ade b y t h e F e d e r a l R e s e r v e Banks o f d e lp h ia w ere known befo re the b i l l was in t r o d u c e d in to Congress. S ;-A.PLR Board. says he b e l ie v e s m o s t o f t h e F e d e r a l R e se rv e Banks supported -5- Sftr.AD s a y s o n ly fo u r out o f th e tw e lv e F e d e r a l R eserve Banks suggested dire c t l o a n s . FLJfllMG want?! to know wh a t each F e d e r a l R e s e r v e MCK5.E answ ers that ivURTZ says there it is BRQV'N s a y s h i s is m e r e l y a m a t t e r o f p o o lin g o f fu n d s , B a n k owns i t s o n ly p urpose is first that th is th e b i l l d isc u ss is s h a r e o f the m oney. in r a i s in g to b e m ade i n he hopes the B o a r d w i l l DRAPER s a y s i s to give the money back to g r e a t e r d a n g e r t h a t raoney w i l l be l o s t by pooling than i f each F e d e r a l R e s e r v e fundam ental c h a n g e the o b je c tio n Bank. t h e Q u estio n i s th a t i f a a s proposed by the Board then th e m a t t e r w ith the C o u n c i l . a p e r f e c t l y r e a s o n a b l e r e q u e s t and states the Board h a s n o t m ade a n y c o m m it m e n t s . MCKEE w ants t o know i f simply b e c a u s e a f t e r be in fa v o r o f a KU R T Z. all b ill In such a s Government l e n d i n g le n d in g b e t t e r b e an d the could n o t . to He hopes sh o u ld no t be w h ic h the the situ a tio n w ithdraw fchile a n e w b u r e a u g o in g a lo n g w it h the Board statute book now a 13 B or would i t s o c i a l i z e d c r e d i t a t a l l but i t co nfro n ts u s . We a r e goinp to have C o u n c i l f e e l s as lo n r as th is is says under the o n th e p r o p o s e d by th e B o a r d even i f th e r e were no 1 3 B. theory entrusted TRARhAGEN when is theory there is a c o n d i t i o n a n d n o t a set up a n d , th e C o u n c il i s there the case t h is most c o n s e r v a t i v e b o d y , proposed b i l l changes, a t l e a s t no new bureau i s b-'ing t h e F e d e r a l R eserv e can g r a c e fu lly c r e a t e d p u r e l y f o r t h e purpose o f m aking loans some d a y t h e r e w i l l n o t b e a n y Government l e n d in g . INTERNATIONAL CURRENCY FOND AND INTERNATIONAL BANK RANSOM says problem , a n d a s th? system i s ? /e !l o f the p r e s i d e n t s Sproul o h i: study n ^r e b e f o r e and B ro *m represented. of New Y o r k , committee t o t h e F e d e r a l R e s e r v e S y st e m h a s a gre at i n t e r e s t in t h is F ccles a r e b o th to be d e l e g a t e s f o r t h i s country, Y e s t e r d a y t h e r e was a c o n fe r e n c e o f some the F e d e r a l Reserve Brinks a n d i t wrs d e c id e d to appoint '- il l ia m s o f P h i l a d e l p h i a , the q u e s t i o n . th e m e etin g a t He th in k s and D a v is o f S t . L o u is as a t h e r e w i l l be a p r e lim in a ry conference B r e t t o n W oods a n d t h i s may f r e e z e the s i t u a t i o n . —6 — BRO^N say s th e d i f f i c u l t y Ststepent o f p r i n c i p l e s . If that so f a r we h a v e a p lan which i s a su g g estio n s is f o r ch a n g e s an d improvements are nade, the ones m a k in g t h e s e a r e more o r l e s s co m m itting them selves to some Di-in* e s p e c i a l l y i f .^ople ftho b e l i e v e the astter, in o rd e r n o t KURTZ that sa y s s u g g e s t i o n s m ade a r e a c c e p t e d . the p la n to b e that com mitted i n in the c o m m it t e d . h is o p in io n t h e p r e s e n t d r a f t makes the same error co n n e c tio n w ith can drop out w h e n e v e r i t C o n se q u e n tly , c a n be d e f e a t e d i n C o n g r e s s do no t w ish to d isc uss the w ish es C-OLDENWEISER s a y s i n h i s power o f the U n i t e d S t a t e s t h e r i g h t to w ith d r a w in c re a se s the to i t s Fund i*hich m akes t h e m e m b e r s h ip o f yield a g r e a t e r p o w e r t h a n so. o p in io n o w in g though it does n o t h a v e m ore t h e L e a g u e o f N a t io n s in th a t any member to do th e U n i t e d S t a t e s e s s e n t i a l so th at even 20 than p r o p o s e d l a r g e c o n t r ib u t io n to the in d ic a te d p e r c e n t o f th e v o t e s i t probably frould by the percentage o f v o te s . Furtherm ore, in his o p i n i o n , t h e w h o l e t h i n g i s p r e t t y t h e o r e t i c a l b e c a u s e , a f t e r a l l , a sovereign p o w e r c a n n o t b e f o r c e d to r e m a in a member i f i t does not w ish to do so. manpower FLEMING states M r. ing the p r iv a t e the Board f o r L e o n a r d h a s no w r e c e i v e d an o f f i c i a l l e t t e r confirm l e t t e r w h ic h E l l i o t t h a d w r it t e n h im . the g r e a t a s s i s t a n c e * Some d i s c u s s i o n finally s u g g e s t s th is takes * program be l e f t NOTE; M a t e r i a l r e l a t i n g June 6, e x p la in in g 3T3 .PT"N states to b e w o rk e d o u t by F le m in g and L e o n a r d . * to the 19A4-> c o p y o f w h i c h ^e oaitted u n l e s s * p l a c e a s t o p u b l i s h i n g th e new r u l i n g and MCKEE * of the C o u n c i l , He w is h e s to thank it has been. t h i s n e w r u l i n g w i l l be s e n t to each member o ffic ia l is * letter from P a u l V . M cN u tt, dated e n clo sed h e re w ith . t h e - E x e c u tiv e C o m m itte e m e e t in g s f o r J u l y and August w i l l e ith e r the C o u n c il or the B o a r d sh o u ld c a l l such a m e e tin g . The meeting adjourned at 1:25 P, M. * * * The s t te m en t o f G o v e r n o r Ransom t h a t M e s s r s . E c c l e s a n d Brown a re to b* aenbers o f t h e A m e r ic a n regarded a s inncuncement o f D ele g a tio n a t c o n fid e n tia l u n t i l these t h e B r e t t o n Woods Co n feren ce i s to ^nich t im e a s th e Governm ent makes p u b lic ap p o in tm en ts. W. L . F E D E R A L R E SERVE BANK P h ila d elp h ia f * p !’lASDUM to lir’daer S. Eccles After consideration o f your l e t t e r dated A p r i l 2 9 relating to financial *aeilities f o r s » a l l business during w a r contract cancellation an'! reconversion I tgre* w ith t h a t t h e t h r e e p r o p o s a l s now in you I i l ? o Agree t h a t th - p ro b le m s h o u l d the offiner a re undesir- be a p p ro a c h e d through l i b e r a l i s a t i o n 0; Section 1 3 b o f the F e d e r a l R e s e r v e A c t . tor? In v i e * o f t h e p r e v a i l i n g a t t i t u d e toward p u b l i c a g e n c ie s w ith regula o*?rs »nd o f t h e g o n e r *1 a t t i t u d e tow ard c e n t r a l i s a t i o n , i t would see® t o Eodify S e c t i o n 1 3 b no more than i s n e c e s s a r y , desirable, c e r t a i n l y e x p e d i e n t , - .is avoiding i n n o v a t i o n s t h a t rai^ht c r e a t e new s o u r c e s o f s u s p ic io n * tisions of t h is s e c t i o n c o u l d be am ended so ass (a) To mrposes for broaden th e The pro- wfcich b u s i n e s s Ioan n n a y be made of loans for any p u r p o s e s r e g a r d e d as sound and r e a s o n a b le by the Reserve B a n k a s k i n g or participating in the loan or m ak ing c o m m itm en ts w i t h r e s p e c t to t h e e x t e n s io n of t h i s type beyon d t h e p r o v i s i o n o f o r k i n g c a p i t a l to the e x te n sio n te n s of creditj (b ) To e x t e n d naxiauss m a t u r i t y o f b u s i n e s s l o a n s to ten ye r s ; (c ) To em pow er th e H e s ^ r v e Banks and to g u a r a n t e e lo a n s up to 90?> -hen adv isable. S in c e the S e c r e t a r y o f t h e T r e a s u r y h a s a u t h o r i t y w ith o u t a d d i t i o n a l legislation to s a k e ^ 1 3 9 , 0 0 0 , 0 0 0 tc 1 st the :>re r e n t a r r a n g e m e n t needed* The roposal that a v a ila b le in th is th is fu n d be p a id ■? aisinistered by th e B o a r d rai^ht b e , attiel frcs ^e ll- K no w n p u b l i c to t h e R e s e r v e B a n k s , i t ■ould be v is e respect and ant? p r i v a t e st a n d , w ith such changes as sa y be to the B o ard o f Governors and th at i t p r o b a b l y w ould b e , a source o f immediate quarters. I t w ould be p ru d e n t to avoid r'nri? ?uch an o p e n i n g , p a r t i c u l a r l y a s t h e s u g g e s t e d ch a n g e i s not e s s e n t i a l and clinically nay e n d a n g e r ~«*nre " tn< th e o u ld e x h a u s t io*”? with a n o th e r R e s e r v e Ar a t p r e s e n t , reg ulatio ns sectio n the opuof*ition la w w i t h o u t a n y by o ffic ia l * B*t* g; on o f l e n d i n g o r o f c o u r s e , r i l l have the power a s w i l l be n e c e s s a r y to gove?*n o p e ra tio n s S e c tio n 13 b as th is am ended* alon ? the f o r o r o i n p l i n e s ^ o u l d be p r a c t ic a l rould m e r e l y l i b e r a l i s e the e x i s t i n g fun d am e n tal a lt e r a t io n ag e n c ie s I n the event any i t c o u l d re d is c o u n t i t s 13b p r e s e n t A c t s l i g h t l y m o d ifie d * ->ui \ b* p o l i t i c a l l y a c c e s t a b l e , a s i t lone o f o f th e p r o p o s a l . the fu n d , the Board o f G o v e rn o rs, ;anx:s u n d e r Amendment o f ** o b jec tiv e p o rtio n o f Bank u n d er th e a s c r ib e su^h r a l e s a n d ^ *.h* ^ s e n r ® real its and /g u a r a n t e e i n g or the *ype t h a t might f i n a n c i n g i n s t i t u t i o n s , e s p e c i a l l y since p o w e rs ~ould h a v e as; a c t s o f permanency* W illiam s
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