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82d Congressl
Ist Session J

JOINT COMMITTEE PBINT

QUESTIONS ON
GENERAL CREDIT CONTROL AND
DEBT MANAGEMENT

S U B C O M M I T T E E O N G E N E R A L C R E D I T CONTROL
AND DEBT MANAGEMENT
OP THE
JOINT C O M M I T T E E O N T H E ECONOMIC REPORT

Printed for the use of the Joint Committee on the Economic Report




UNITED STATES
GOVERNMENT PBINTINO OFFICE
WASHINGTON : 1951

JOINT

COMMITTEE

ON THE

ECONOMIC

REPORT

(Created pursuant to sec. 5 (a) of Public Law 3(M, 79th Cong.)
SENATE

HOUSE OF REPRESENTATIVES

JOSEPH C. O'MAHONEY, Wyoming, Chairman E D W A R D J. H A R T , New Jersey, Vice
J O H N SPARKMAN, Alabama
W R I G H T P A T M A N , Teias
P A U L H . DOUGLAS, Dlinois
R I C H A R D B O L L I N ® , Missouri
W I L L I A M BENTON, Connecticut
C L I N T O N D. M c K I X N O N , California
R O B E R T A. T A F T , Ohio
JESSE P. WOLCOTT. Michigan
R A L P H E. FLANDERS, Vermont
C H R I S T I A N A. H E R T E R , Massachusetts
A R T H U R V. W A T K I N S , Utah
J. CALEB BOGGS, Delaware
GBOVEB W. EN3LET, Staff DxrectoT
JOHN W, LEHMAN, CUrk

SuBCGMMirTEE OK G E N E K A L CREDIT CONTBOL AND D E B T
W R I G H T P A T M A N , Texas,

MANAGEMENT

Chairman

P A U L H . DOUGLAS, Illinois

R I C H A R D B O L L I N G , Missouri

B A L P H E. FLANDERS, Vermont

JESSE P. W O L C O T T , Michigan

HKNST C. MUBFHT,

n




EcmovUa to the Sitbcommittee

ChalrrMii

CONTENTS
Page

Foreword
Questions for—
Secretary of the Treasury
Chairman of the Board of Governors of the Federal Reserve System^.
Chairman of the Federal Open M a r k e t Committee (to be answered i n
collaboration w i t h the Vice Chairman)
Presidents of the Federal Reserve Banks
Council of Economic Advisers
Comptroller of the Currency
Chairman of the Federal Deposit Insurance Corporation
Administrator of the Reconstruction Finance Corporation
State Bank Supervisors
Economists.
Bankers
Life insurance company executives
United States Government security d e a l e r s . .
Bibhography of the Joint Committ<H; on the Economic Report, materials
on general credit control, debt management, a n d related subjects




m

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4
8
15
16
20
22
25
28
29
30
31
32
33
34




QUESTIONS ON GENERAL CREDIT CONTROL AND
DEBT ]VIANAGEMENT
FOREWORD

During? the fall of 1949 a subcoinmiLtce of the Joint Committee on
the Economic Report conducted an extensive inquiry into fiscal and
monetary policy. A t that time the country was recovering from a
mild recession and the scalcs seemed evenly balanced between inflationary and deflationaiy pressures. Korea was a little-known spot
on the map of Asia.
The 2 yeai^ which have passed since that time have been packed
with events. The international situation has deteriorated markedly,
and the United States Government has embarked on a vast program
of military preparedness w i t h its inevitable corollary of increased
inflationaiy pressure.
There has been l i t t l e disagreement, at least in principle, on tho
proper measures of fiscal policy called for b y the new situation, and
the full committee, i n a report issued on August 15 of this year, said:
The coiniiiittce is • » • convinced of the urgent need (1) for renewed
efforts to rcthicc and postpone less essential Government expenditures, a n d
(2) for p r o m p t l y p r o v i d i n g tax revenues sufficient to balance a carefully planned
administrative budget this fiscal year.

There has been much disagreement, however, both inside and outside the Government, w i t h respect to tlie proper steps to be taken i n
the present emergency in the fields of credit policy and debt management; and, notwithstanding the "accord" announced b y the Treasury
and the Federal Reserve System in M a r c h of this year, much of the
course to be followed remains to be charted. The policy disputes of the
past year have also brought into sharp focus the question of whether
our machinery for the determination of monetary policy—set up, for
the most part, many yeai-s ago—is appropriate to cope w i t h the problems of the present day and to c a n y into effect the policy of the Congress with respect to economic stability as set forth in the Employment
Act of 1946. As Chainnan M a r t i n of. the Board of Governoi-s of the
•federal Reserve System recently said to the American Bankei^s
Association:
Our present central bank is now nearly 39 years old, and the t i m e has come, i t
^Miis to nie, when we must reevaluate, reassess, and redetermine its w o r t h a n d
effectiveness.

I t was as an initial step i n this direction that the committee staff, at
le siigjrestion of Senator Flanders and myself, made a preliminary




2

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

study of these problems which was published as a committee print
under the title "General Credit Control, Debt Management, and Economic Mobilization" earlier this year. Following this preliminary
step, Senator O'Mahoney, chairman of the Joint Committee on the
Economic Report, appointed a new Subcommittee on General Credit
Control and Debt Management.
The subcommittee is opening its inquiry by addressing questionnaires to the heads of six agencies of the Federal Government, to the
presidents of the Federal Keserve banks, to State supervisors of banks,
and to four groups of persons in private life. Private respondents
who may not desire to answer the full questionnaires are urged to
answer any questions in which they have a special interest. If
requested, their identity will be held confidential.
The questionnaires have been prepared after extensive consultation
w i t h representatives of groups to which they are addressed, and every
effort has been made to phrase the questions in such a way as to brmg
out the relevant facts w i t h a minimum burden on the respondents.
M a n y of the questions have, in fact, been inserted at the request of
respondents in order to enable them to bring out points which they
and the committee consider relevant to the inquiry. Wlierever possible, questions calling for statistical material have been phrased in
such a way that they can be answered from available data. Few call
for additional tabulations. Some of the questions addressed to Government officials call for descriptive material of a noncontroversial
character. These questions have been included so that the completed
answers will have greater continuity and hence be more helpful to
many readers than would othenvise be the case. No such questions
have been included in any of the questionnaires sent private respondents. Only a very small proportion of the ground covered by the questionnaires duplicates that covered by the inquiry 2 years ago—and
that small amoimt because of new developments or because of the possibility that many respondents have altered their views.
The questionnau-es were presented for comment to the prmcipal
Federal agencies in draft form during the month of August. Extensive
consultations have been held with most of the agencies during the intervening period, and they have already had considerable time in which
to prepare material whUe the questionnaires were being whipped into
final form. Every effort has been made to hold questionnaires addressed to persons outside the Government to a few questions which
in most cases can be answered on the basis of the personal knowledge
of the respondent without the necessity of reference to other material
The questions in general deal with the following material: (a) The
directives concerning general economic policy given to Federal agencies
by Congress; (b) the relationship of the Federal agencies to each other
and to the President; (c) the earnings and expenses of the Federal
Reserve banks and of Federal agencies which operate otherwise than
w i t h funds appropriated by Congress; (d) recent developments and




3

GENERAIi

CREDIT CONTROL AND DEBT MANAGEMENT

appropriate future policy in the fields of money, banking, and credit;
(e) appropriate policy i n the field of debt management; and (/) the
adequacy of the existing banking structure to serve the needs of both
depositors and borrowers.
The subcommittee expects to publish the answers received from
Federal officials and abstracts of those received from persons outside
the Federal Government in a book of materials to be issued late this
year. The materials so published w i l l i n t u r n lay the basis for subcommittee hearings expected to be held early next year, following
which the subcommittee w i l l prepare and present its report.
WRIGHT

PATMAN,

Chairman^ SuhcommiUee on General Credit
Control and Debt Management.
OCTOBER 12, 1 9 5 1 .




QUESTIONS FOR T H E SECRETARY OF T H E
A.

CONGRESSIONAL

POLICY

TREASURY

DIRECTIVES

1. State, citing the appropriate statutes, all of the policy directives
bearing upon economic objectives which have been given by Congress
to the Treasury Department as a guide to the use of the powers entrusted to it.
2. State the general economic objectives which the Treasury Department seeks to further tlirough the use of the powei*s which have
been given to i t b}^ Congress. Emphasize particularly the over-all
objectives of the Treasurv Department in managing the public
debt.
3. Do you believe that the congressional declaration of policj^ contained i n the Emplo}Tnent Act of 1946, which reads as follows:
The Congress hereby declares t h a t i t is the continuint; policy and responsibility
of the Federal Government to use all practical means consistent w i t h its needs
and obligations and other essential considerations of national policy, w i t h the
assistance and cooperation of industry, agriculture, labor, a n d State a n d local
governments, t o coordinate and utilize all its i^lans, functions, and resources for
the purpose of creating and maintaining, in a maimer calculated to foster and
promote free competitive enterprise and the general welfare, conditions under
which there w i l l be afforded useful employment opportunities, including selfemployment, for those able, willing, and seeking to work, and to promote maxim u m employment, production, and purchasing i^ower.

is balanced i n its emphasis upon high-level emplo^-ment and pricc
stability respectively, as objectives of Federal Government policy?
Suggest any changes by which you think i t might be improved.
4. Do you believe that a broad directive witli respect to economic
policy should be given to tlie Treasury Department by Congress?
I f so, state the general character of the directive wliicli you would
recommend. I f you believe tliere should be no such directive, state
your reasons for this belief.
B.

POLICY

FORMULATION

IN

THK

EXECUTIVE

BRAXCH

5. What are the present powers of the Treasury Department, if
any, w i t h respect to the operations of the Federariending agencies,
such as the Reconstruction Finance Corporation, the Federal Housing
Administration, and including also the Federal Deposit Insurance
Corporation? Enumerate these powers, stating in each case their
basis i n statute, Executive order, or otherwise.
6. ^^^lat additional authority of the Treasurv Department witli
respect to the Federal Deposit Insurance Corporation and the Federal
lending agencies would you consider desirable? I f you do not believe
that additional authority of the Treasury Department with respect
to these agencies is desirable, what, if any, additional means of coordinating their activities would you recommend?
7. Can any policy confli(;t between the Treasury and the Federal
Deposit Insurance Corporation or the lending agencies be rc^solved in
the last resort by the President? I f not, what are the e x c e p t i o n s ?
.4




5

GENERAIi

CREDIT CONTROL AND DEBT MANAGEMENT

Do you believe that the President should have (or under the Constitution does have) authority to resolve all such conflicts?
8. \Vliat are the present powers of the Treasury Department, if
any, witli respect to the operations of the Federal Reserve Sj^stem?
9. ^^^lat provision, if any, is there for resolving policy conflicts
between the Treasury (or otlicr agencies of the executive branch) and
the Federal Reserve System? D o you believe that this power should
lie \ n t l i tlie President (or already does under the Constitution)?
10. I f you do not believe that the President should (or does) have
such power, how, in your opinion, should policy conflicts be resolved?
Is i t necessary that they be resolved or could the agencies directly
reponsible to the President, on the one hand, and the Federal Reserve
System, on the other, pursue conflicting policies indefinitely?
C.

EXPENSES

FOR

THE

PURPOSE

OP I N F L U E N C I N G

PUBLIC

OPINION

11. List and discuss any e?q)enscs which have been incurred by the
Treasury during the period since 1946 for the purpose of influencing
pubHc opinion on controversial matters. Expenses for the preparation of material in standard expositoiy format and for the distribution or presentation of such material in w r i t t e n or oral form to persons who might bo expected to have a regular business or professional
interest in i t may be omitted. A n y expenses during this period for
the preparation of motion pictures, illustrated brochures, or any other
special material should be included, however, irrespective of your personal opinion as to whether or not the material they contain is controversial in character, i n order that the subcommittee may, if i t dcsii^es,
consider them on a case-by-case basis.
N.

CREDIT

AND

DEBT MANAGEMENT

POLICY

12. Leaving aside the matter of debt management completely, what
are the various powers of the Treasury w i t h regard to monetary matters? Explain the legal background and describe how the Treasury
has used these powers.
13. Describe the Treasxuy's fimctions w i t h respect to the handling
of incoming gold and silver, and how bank reserves are affected.
Explain how the Treasury may permit gold to bo "sterilized."
14. Describe fully how the handling of Treasur3^ deposits influences
the monetary situation.
15. I n making decisions w i t h regard to these Treasury monetary
matters (gold, silver, and handling of its deposits), has the Treasury
attempted to coordinate its policies w i t h those of the Federal Reserve
System?
16. Review the development of legislative authority on public-debt
matters over the years.
17. Describe fully the issues involved i n policy discussions between
the Treasury and the Federal Reserve System from the end of the war
M t i l the "accord" amiounced b y these agencies on M a r c h 4, 1951.
What were the areas of agreement and the areas of disagreement and
now did they change over time during this period?
18. Describe the nature of the accord between the Treasury and the
-r ederal Reservg System which was announced by them on M a r c h 4,
1951.




6

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

19. Have there been fundamental differences of economic objectives
between the Treasury and the Federal Reserve System since the time
you became Secretary of the Treasury and, if so, what have they been?
20. Except as previously described, what differences w i t h respect to
procedures and techniques have arisen between the Treasury and the
Federal Reserve System since you became Secretary, or earlier?
21. H o w closely have the Treasury and the Federal Reserve System
cooperated i n matters of common interest?
22. Describe the mechanism by which a general tightening or easing of credit, and the changes in interest rates which may result, is
expected to counteract inflation or deflation. Discuss the impact on
borrowers and lenders in both the short-term and long-term credit
markets and on spending and savings. Indicate the effect on each
of the broad categories of spending entering into gross national
product. What are the (actual or potential) capital losses or gains
that would be brought about by changes i n interest rates? T o what
extent is the effectiveness of a program of credit restraint affected by
or dependent upon expectations w i t h respect to subsequent changes
i n interest rates? Distinguish i n your discussion between small
changes in rates and large changes i n rates.
23. Evaluate the effectiveness of a general tightening of credit (an4
the consequent increase i n interest rates) i n restraining inflation as
compared w i t h other factors (a) when the principal threat of inflation
comes from an increase i n private business a c t i v i t y ; (6) when the
principal threat of inflation comes from increased expenditures by
the Federal Government.
24. Discuss the appropriate role of general credit controls and of
selective credit controls under each of the hypotheses mentioned in
the preceding question. W h a t selective controls do you consider
appropriate under present circumstances?
25. D o you consider that the current extensive use of Government
controls over private construction and over private ability to buy
scarce materials has an important bearing upon the effectiveness and
appropriateness of general credit controls under present circumstances?
26. To what extent is the demand for Government securities by
nonbank investors determined b y (a) the level of interest rates,
(6) expectations w i t h respect to changes i n interest rates, (c) other
factors?
27. What advantages do you see in a stable long-term Government
bond market? W h a t weigixt should be given to the desirability of
stability i n the Government bond market i n determining credit
policy (a) when the Treasury is not expected to be a large borrower in
the foreseeable future; (b) vmen a large volume of Treasury refunding
operations w i l l have to be effected i n the foreseeable future; (c) when
i t is expected that the Treasury will be a large net borrower during
the foreseeable future; (d) under conditions of total war?
28. Has the Treasury Department ever taken action on its own
initiative or i n cooperation w i t h the Federal Reserve System to change
the level of interest rates on Government securities, or to prevent a
change i n .interest rates which would have otherwise occurred? Give
examples—if possible, of actions operating i n each direction.
29. Please explain your position regarding the importance of interest
on the public debt as a budgetary cost.




7

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

30. Has the gro^\'th of the public debt clianged the nature of the
methods which can be prudently used by the Federal Reserve System
^vith respect to monetary and credit policy?
3L Have there been important economic changes since 1913 which
affect the efficiency and appropriateness of traditional Federal Reserve
System operations?
32. To what extent does the choice of maturities of new and refunding issues of Treasury securities enable 3^ou to influence the money and
investment markets?
33. In your opinion is it possible to separate decisions w i t h respect to
mterest rates from the decisions regarding timing, amounts of offerings to different sectors of the market, designing of securities for various investor classes, and similar considerations?
34. Do you believe that a rise in the average annual yield of series E
savings bonds to 3% percent, or thereabouts, would significantly increase the amounts sold and diminish the amounts of early redemptions?
35. Piscuss the advantages and disadvantages of requiring (a) all
member banks or (6) all insured banks to maintain secondary reserves
(in addition to present reserves) in the form of United States securities,
either present issues or special types.
36. Discuss the advantages and disadvantages generally of maintaining bank reserves against classes of assets rather than against
classes of liabilities as at present.
37. Discuss the advantages and disadvantages of marketable and
nonmarketable securities (a) under present conditions; (b) in the event
of the necessity for substantial net Government borrowing.
38. What new types of securities, if any, do you believe should be
given consideration for use (a) under present conditions; (6) in the
event of the necessity for substantial net Government borrowing?
Give the merits and demerits,
39. Have you any suggestions other than those implied in t ^
answers to the preceding questions for insulating public debt securities
from the impact of restrictive credit policies designed primarily to
discourage the growth of private debt?
40. Under what conditions, if any, do yon believe i t would be
desirable to resort to compulsorv methods i n the sale of Government
securities to (a) banks, (b) other financial institutions, (c) other
corporations, (d) individuals? Discuss the philosophy which underlies your views on this matter.
41 Discuss the merits and demerits of the proposal for the issuance
of a bond, the value of which would be guaranteed i n terms of purchasing power.
E,

INTERNATIONAL

COMPARISONS

42. Discuss and evaluate, as far as your available information
the relationship between the Executive, the Treasury, and
Jne Central Bank i n foreign countries. Place particular emphasis on
the resolution of policy conflicts.
43. Discuss and evaluate, as far as your available information
penmts, the relative use of selective a n i general credit controls i n
loreign countries.
44. Discuss and evaluate, as far as your available information
permits, any devices used in foreign countries to insulate the market
lor Uovemment securities from the private credit market.




QUESTIONS FOR THE CHAIRMAN OF T H E BOARD OF
GOVERNORS OF T H E FEDERAL RESERVE S Y S T E M
A.

CONGRESSIONAL

POLICY

DIRECTIVES

1. State, citing the appropriate statutes, all of the policy directives
now given by Congress to the Board of Governors, the Federal Open
Market Committee, and the Federal Reserve banks, stating in each
case the operations to which the directive applies.
2. State the general purposes which the Federal Reserve System
seeks to further b^^ means of its operations within the very brolad
range of discretion left i t by the congressional directives. State the
general objectives both of all operations taken as a whole and of
particular operations—e. g., open market operations—if the objectives
of these operations differ in any way from the over-all objectives.
3. Trace the principal credit policy actions of the Rederal Reserve
System from the S3''stem's inception to the present and indicate the
explanation of such actions, including their relation to changes in
business activity.
4. Discuss the relation of credit and monetary policy to fiscal and
other policies of the Government in combating inflation or deflation.
5. Do you believe that the congressional declaration of policy
contained i n the Employment Act of 1946, which reads as follows:
T h e Congress hereby declares t h a t i t is the continuing policy a n d responsibility
of the Federal Government t o use all practicable means consistent w i t h its needs
a n d obligations and other essential considerations of national policy, w i t h the
assistance and cooperation of industry, agriculture, labor, and State and local
governments, t o coordinate and utilize a l l its plans, functions, a n d resources for
the purpose of creating and maintaining, i n a manner calculated t o foster and
promote free competitive enterprise a n d the general welfare, conditions under
w h i c h there w i l l be afforded useful employment opportunities, including selfemployment, for those able, willing, and seeking t o w o r k , a n d t o promote maxim u m employment, production, and purchasing power.

is balanced in its emphasis upon high-level employment and price
stability respectively, as objectives of Federal Government policy?
Suggest any changes by which you think i t might be improved.
6. Do you believe that a broad directive w i t h respect to economic
policy should be given the Federal Reserve System by Congress? If
so, state the general character of the directive which you would recommend. I f you believe there should be no such directive, state
your reasons for this belief.
B.

RELATIONSHIP

TO

EXECUTIVE

BRANCH

7. I n the light of the Federal Reserve Act, what is the responsibility of (a) the Chairman (6) the Vice Chairman and (c) the other
members of the Board of Governors to the President in the performance of their respective functions? I f some functions are performed
i n accordance w i t h policies determined by the President, and others
8




9

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

independently of the policy of the President, state which functions
fall in each category.
8. Are {a) the Board of Governors and (6) the Federal Open M a r k e t
Committee parts of the executive branch of the United States Government? I f not, what is their status? Discuss w i t h respect to the
constitutional issues involved, as you undei-stand them.
9. Trace the background of the provisions in the law for (a) a board
of directors at each Federal Reserve bank and branch and (6) for the
presidents as the chief executive officers of the banks. Discuss the
functions of each in the formulation of national credit policies and i n
the administration of the Federal Reserve banks.
10. Are the Federal Reserve banks parts of the executive branch
of the United States Government? Are they parts of the private
economy? Wliat are the implications, advantages, and disadvantages
of the private ownership of the stock of the Federal Reserve banks?
11. Does the Board of Governors follow the practice of submitting
its reports to Congress on pending legislation to the Bureau of the
Budget to determine whether or not they are i n accordance w i t h the
program of the President? I f i t submits some but not all of such
reports, what are the criteria by which those siibmitted are selected?
Does the Bureau of the Budget submit proposed reports of the executive agencies to the Board of Governors for comment?
12. I f policies adopted by (a) the Board of Governoi-s, (6) the Federal Open Market Committee, or (c) the Federal Reserve banks differ
from the policies of agencies operating under the direction of the
President, what means, if any, are adopted to coordinate the policies?
How urgent is the problem of coordination? Give examples.
13. State the matters of common interest between the Federal
Reserve System and (a) the Council of Economic Advisers, (6) the
Treasury Department, (c) the Comptroller of the Currency, (rf) the
Federal Deposit Insurance Corporation, and (e) Federal lending
agencies generally, and describe the steps taken to secure a coordination of policy among them. AVliat suggestions have you for the
miprovement of coor^lination between tlie Federal Reserve System
and other agencies having an interest i n money and credit?
14. How does the Board of Governors of the l^ederal Reserve System
participate in the determination of the international financial i3olicy
of the United States? How is coordination of policy i n this field
effected? How successful has this coordination been?
C. DISTRIBUTION WITHIN THE FEDERAL RESERVE SYSTEM OF AUTHORITY
ON CREDIT POLICIES

15. Trace the historical development of the process b y which the
discount rates of the Federal Reserve banks are set and evaluate the
relaUve authority of the Board of Governors and of the directors of
"^^^^jlt'ral Reserve banks in setting discount rates today,
16. Trace the historical development of open-market operations
covenng both their significance as instruments of monetary and
credit policy and the nature and composition of the bodies w h i c h
17
had control over them.
ftT^
is the rationale of the present assignment of authority over
open^market operations to a body other than the Board of Govcrnois?




10

GENERAIi

CREDIT

CONTROL AND

DEBT

MANAGEMENT

W h y should the allocation of responsibility for open-market policy
differ from the allocations w i t h respect to discount rates and reserve
requirements? D o you consider these differences desirable? Why,
or w h y not?
18. Can open-market policy, discount polic3'', and reserve requirement policy pursue different general objectives, or should these various
instruments always be directed toward a common policy? When
d^erences of viewpoint among the different policy-determining groups
must be compromised i n order to adopt a common policy, what are
the factors of strength and weakness i n the position of each of the
parties to the compromise—i. e., the Board of Governors, the Federal Reserve Bank President Members of the Federal Open Market
Committee, and the boards of directors of the Federal Reserve banks?
D. O R G A N I Z A T I O N

OF T H E

BOARD

OF

GOVERNORS

19. W h a t qualifications are required by statute for appointment
to the Board of Governors? Would you suggest any changes i n these
statutory qualifications?
'
20. Would there be any advantage in removing the present requirement of law that not more than one member of the Board of Governor
may be appointed from a single Federal Reserve district? Would it
be desirable to replace i t by any other type of geographical limitation?
21. What are the advantages and disadvantages of the present
14-year term of appointment for members of the Board of Governor,
and the 4-year term of designation of the Chairman and Vice Chairman? Would you suggest that any changes be made in the tenure
or manner of appointment of members or i n the tenure or manner of
designation of the Chairman and Vice Chairman?
22. W l i a t would be the advantages and disadvantages of reducing
the number of members of the Board of Governors or of replacing the
Board by a single head?
E.

EARNINGS AND

EXPENSES

OF T H E

FEDERAL

RESERVE

SYSTEM

23. W h a t have been the annual expenses of—
(а) The Board of Governors, and
(б) The 12 Federal Reserve banks combined (which include
assessments for expenses of the Board of Governors),
for each year since the inauguration of the S^'stem? To the e x t e n t
practicable, state expenses both inclusive and exclusive of reimbui'Sable fiscal agency expenses. Relate these expenses i n each year since
1919 to (i. e., express them as percentages of available figures for):
(а) T o t a l expenses of all member banks, and
(б) Gross national product of the United States.
(The purpose of these comparisons is to "deflate*' the expenses of the
System by factors which measure its workload in a rough manner
and automatically reflect changes i n the price level.)
24. Are the expenses and other accounts of the Board of Governor
or of the Federal Reserve banks subject to an}^ budgetary or audit
control of any other agency of either Congress or the^ executive
branch of the United States Government? I f not, do you believe
that they should be? W h y , or w h y not? Describe budgetary and
auditing procedures now i n effect.




15

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

25. What have been the total gross earnings of the 12 Federal
Reserve banks combined in each year since the formation o f the
System? Give a breakdown of earnings by som-ces, and show profits
and losses on the sale of United States Government securities for each
year.
26. Present classified statements of expenses of the 12 Federal
Reserve banks combined for each of the past 5 years, classifying i n
such detail as you consider appropriate for an analysis of the principal
operations of the System.
27. List and discuss any expenses which have been incurred during
the period since 1946 b y the Board of Governors, or, to the Board's
knowledge, have been incurred by the Federal Reserve banks for the
purpose of influencing public opinion on controversial matters. Expenses for the preparation of material in standard expository format
and for the distribution or presentation of such material in written
or oral form to persons who might be expected to have a regular
business or professional interest in i t may be omitted. A n y expenses
during this period for the preparation of motion pictures, illustrated
brochures, or any other special material should be included, however,
irrespective of your personal opinion as to whether or not the material
they contain is controversial in character, in order that the subcommittee may, if i t desires, consider them on a case-by-case basis. (This
question is to be answered in collaboration with the Presidents of the
Federal Reserve banks.)
F. GENERAL CREDIT AND MONETARY

POLICIES

28. Discuss the factors that determine the quantity of money and
its adequacy for the functioning of the economy. Cover the influence
of Federal Reserve credit policies over changes in the quantity of
money.
29. Discuss the fundamental issues between the Treasury and the
Federal Reserve Sj'^tem between the end of the war and the "accord"
announced by these agencies on March 4, 1951. Describe fully the
"accord" between the Treasury and the Federal Reserve System wliich
was announced then.
30. Analyze the effects of the rising yield upon short-term Governments between August 1950 and March 1951, from the standpoint
of (a) effect upon the volume of bank loans, (6) effect upon thc» level
of private interest rates and the differential between those rates and
the yield on Governments, (c) effect upon the market prices and the
volume of sales of long-term Governments, (rf) effect upon the policy
of the Federal Reserve to support the long-term Governments.
31. Describe the mechanism by which a general tightening or easing
of credit, and the changes in interest rates whicli may result, is
expected to counteract mflation or deflation. Discuss the impact
on borrowers and lenders in both the sliort-term and lonpterm credit
markets and on spending an(l savings. Indicate the effect on each
of the broad categories of spending entering into gross national
product. Wliat are the (actual or potential) capital losses or gains
that would be brought about by changes in interest rates? To what
extent is the effectiveness of a program of credit restraint affected by
or dependent upon expectations with respect to subsequent changes in




12

GENERAIi

CREDIT CONTROL AND DEBT MANAGEMENT

interest rates? Distinguish i n your discussion between small changes
i n rates and large changes i n rates.
32. H o w rapidly and to what extent would you expect the volume
of bank loans to respond to measures of general credit control under
present conditions?
33. Compare the applicability of general credit and monetary
measures and the resultant increases i n interest rates as a means of
restraining inflation (a) when the Treasury is not expected to be a
large borrower i n the foreseeable future, (6) when a large volume of
Treasury refunding operations will have to be effected i n the foreseeable future, (c) when it is ex-pected that the Treasury will be a large
net borrower during the foreseeable future, (d) under conditions of
total war.
34. To what extent is the demand for United States Government
and other high-grade, fixed-interest-bearing securities by nonbank
investors influenced b y (a) the current level of interest rates, (b)
expectations with respect to changes in interest rates, (c) other factors?
35. AVliat is the reason for the relatively slight use b3^ commercial
banks of the Federal Reserve discount and borrowing privilege? Do
you believe that greater reliance should be placed on this privilege aa
a means of obtainmg Federal Reserve credit? Under what conditions,
if any, would you expect to see a greater use made of the discount
privilege?
36. D o you believe that there is any conflict between measures to
restrain excess demand b y credit control and the need for expanding
the economy to meet the requirements of a continuing readiness to
resist aggression and a continuing high standard of living? I f so, how
can the effects of this conflict be mitigated?
37. "W^iat do you believe to be the role of bank examination and
supervision i n furthering the objectives of the Employment Act?
38. 'V\Tiat do you consider to be the role of selective regulation of
consumer credit i n restraining inflation under the conditions of each of
the assumptions w i t h respect to the magnitude of Government borrowing stated i n question 33? ^Vhat attention should be given by
the controlling authority to inventories and price and employment
changes in the particular industries affected b y the regulation?
Discuss the operation of regulation W since its revival i n the fall of
1950.
39. \ M i a t do you consider to be the role of selective regulation of
real estate credit i n restraining inflation under the conditions of each
of the assumptions w i t h respect to the magnitude of Government
borrowing stated i n question 33? Discuss the operation of selective
regulation of real estate credit during the past year.
40. W h a t do you consider to be the role of selective regulation of
stock market credit in restraining inflation under the conditions of
each of the assumptions with respect to the magnitude of Government
borrowing stated i n question 33?
41. W h a t selective regulations other than those over consumer
credit, real estate credit, and stock market credit do you consider to
be feasible? W l i a t would be their applicability under the conditions
of each of the assumptions w i t h respect to the magnitude of Government boiTOwing stated in question 33?
42. Explain and evaluate the Voluntary Credit Restraint Program
which lias been developed during the past year. What are the pre-




13

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

cautions taken to insure fair treatment to competing firms? W h a t
do you consider to bo the role of voluntary credit restraint under
each of the assumptions w i t h respect to the magnitude of Government borrowing stated in question 33?
43. Discuss the use of moral suasion as a tool of credit control.
How has this been used i n the cases of member banks and of savings
institutions, including life msurance companies?
44. AVhat is the function of bank reserves? W h a t are present
reserve requirements w i t h respect to banks?
45. Should nonmember banks be required to maintain the same
'reserves as member banks? W h y , or why not?
46. Discuss the advantages and disadvantages of basing reserve
requirements on types of deposits irrespective of the geographical
location of banks.
47. Discuss the advantages and disadvantages of requiring additional reserves which might be held in whole or in part i n the form of
Government securities. Illustrate w i t h a specific plan or plans.
48. Discuss the advantages and disadvantages of requiring during
the national defense emergency a supplementary reserve to b^e maintained against increases i n either loans and investments or deposits.
Elustrate with a specific plan or plans.
49. Discuss the advantages and disadvantages generally of maintaining bank reserves against classes of assets rather than against
classes of liabilities as at present.
50. State the statutory authority for the power, if any, of the Board
of Governors, the Federal Reserve banks, or of any agency of the
United States Government to control directly or to " r a t i o n " the extension of credit b y individual banks. Specify the (legal) circumstances under wliich such rationing could occur and the control of the
President over its operation. Under what (economic) circumstances,
if any, would you recommend the use of credit rationing? Describe
the manner in which you believe that such a system would operate.
G. INTERNATIONAL COMPARISONS

51. Discuss and evaluate, as far as your available information perniits, the relationship between the Executive, the Treasury, and the
Central Bank in foreign countries. Place particular emphasis on the
resolution of pohcy conflicts.
52. Discuss and evaluate, as far as your available information perinits, the relative use of selective and general credit controls in foreign
countries.
53. Discuss and evaluate, as far as your available information perjnits, any devices used i n foreign coim tries to insulate the market for
government securities from the private credit market.
H. THE BANKING STRUCTURE

54. Trace the principal changes in the functions and activities of
oanks since the estabhshment of the Federal Reserve System, w i t h
special emphasis on the period since the middle thirties. Cover
the various types of assets and liabihties.
t
Trace the changes in the number and character of banking
lacilities since the establishment of the Federal Reserve System, w i t h




14

GENERAIi

CREDIT CONTROL A N D DEBT

MANAGEMENT

S p e c i a l e m p h a s i s on t h e p e r i o d since t h e m i d d l e t h i r t i e s .
Cover
c h a n g e s i n t h e n u m b e r of b a n k s , i n t h e supervisory j u r i s d i c t i o n of
b a n k i , and in multiple-office banking.

56. Trace the course of the earnings and expenses of all member
banks from the first year (1919) for which such data are available to
the present time. Cover especially the foUowmg points: (a) the ^ s s
amoimt of earnings and expenses and of ciuxent net earnings and net
profits; (6) the ratios of current net earnings and of net profits to total
capital accounts; (c) changes in the relative importance of different
sources of earnings, especially (i) loans (ii) investments other than
United States securities (iii) United States securities and (iv) service
charges (distinguish as far as possible between current earnings,
on one hand, and profits and losses on sales or disposition of securities
on the other); (d) changes i n the relative importance of different
categories of e^enses, especially (i) wages and salaries (ii) interest
on time deposits and borrowed money (iii) taxes and (iv) deposit
insurance assessments (these may be estimated if not shown separately
i n bank earnings reports).
57. (a) Present an analysis supported b y statistical tables, b y 10year intervals over the period 1920-50, on the number of banking
facilities i n relation to population, b y States. (6) Present a similar
analysis on a county basis for the year 1950. (c) I f there is any evidence of inadequacy of banking facilities i n some cities, counties, or
larger areas, what are your suggestions for measures to remedy such
inadequacy?
I . A V A I L A B I L I T Y OP CAPITAL FOR SMALL BUSINESS

58. Discuss the changes which have occurred during the last 25
years i n the ease or difficulty w i t h which small-business men have been
able to raise capital or to borrow. W h a t i n your opinion are the reasons for such changes as you find to have occiured? D o you believe
t h a t a more liberal supply of capital and credit to small business woidd
contribute to the diffusion of economic power and to the dynamic
character of the economy? W h a t steps could be taken to bring about
a more liberal supply of capital and credit to small business? D o you
believe that any of these steps would be desirable? Distinguish between the longer-term aspects of the problem and those of particular
importance today durmg the current national defense emergency.
59. Discuss the effects of bank examinations on the lending policies
of banks, particularly as they apply to loans to small-business men.
Distinguish if necessary between examinations b y different examining
authorities.




QUESTIONS F O R T H E C H A I R M A N O F T H E F E D E R A L
MARKET COMMITTEE

OPEN

(To be Answered in Collaboration with the Vice Chairman)

1. Explain the reasons why the Federal Open Market Committee
confines its dealings in United States securities to a small nmnber of
"recognized" Government security dealers. Trace the history and
explain the mode of operation of this restriction of dealings to recognized dealers.
2. To what extent are open market operations impersonal in character and to what extent are they combined w i t h the instnmient of moral
suasion?




16

QUESTIONS FOR THE PRESIDENTS OF T H E
RESERVE BANKS

FEDERAL

(The questions on this list, insofar as they refer to country-wide
practices and conditions, may be answered jointly by the presidents
if they so prefer—each president, of course, adding such supplement
or dissent as he desires.)
A.

O W N E R S H I P OF T H E F E D E R A L R E S E R V E B A N K S A N D
RELATIONSHIP TO T H E GOVERNMENT

THEIR

1. Describe the present arrangements with, respect to the ownership of the stock of the Federal Reserve banks. W h a t are the unplications, advantages, and disadvantages of this ownership as compared
w i t h ownership b y the Federal Government?
2. Who, i n your opinion, owns the s\irplus of the Federal Reserve
banks?
3. D o you consider the Federal Reserve banks to be p a r t of the
United States Government? Part of the private economy? If
neither, or partly one and partly the other, discuss their status.
4. State the congressional pohcy directives applying to the Federal
Reserve banks, citing appropriate statutes. I n what respects, if any,
do y o u believe that these directives should be altered?
B.

ORGANIZATION

OF T H E F E D E R A L R E S E R V E

BANKS

5. Describe the roles of the presidents and the boards of directors
of the Federal Reserve banks and of the Board of Governors i n the
management of the Reserve banks.
6. State the qualifications required for election as class A and class B
directors of the Federal Reserve banks, and the method of electing such
directors. Include i n your description both qualifications and procedures prescribed b y statute and those established by customary
usage, distinguishing between them when necessary.
7. D o you believe that all of the directors of the Federal Reserve
banks should be chosen as public representatives rather than as representatives of specified groups? I f so, how should they be chosen? If
representation of specOied groups is to be continued, do y o u believe
that labor should be added to the groups represented? I f so, how
should the labor representatives be chosen?
C. D I S T R I B U T I O N W I T H I N T H E F E D E R A L R E S E R V E S Y S T E M OF A U T H O R I T Y
ON CREDIT POLICIES

8. Discuss the extent to which i t is possible to maintain regional
credit policies differing from national credit policies. Who is responsible for the formulation of such policies and what are the instrumentalities b y which they can be maintained?
9. Describe the role played b y the boards of directors and the presidents of the Federal Resei*ve banks i n the formulation of national c r e d i t
policy.
16




17

GENERAIi

CREDIT CONTROL A N D DEBT

MANAGEMENT

10. Trace the historical development of open-murket operations
covering both their significance as instruments of monetary and credit
policy, and the nature and composition of the bodies which have successively had control over them.
11. What is the rationale of the present assignment of authority
over open-market operations to a body other than the Board of Governors? Why should the allocation of responsibility for open-market
policy differ from the allocations with respect to discount rates and
reserve requirements? Do yon consider these differences deshable?
Why, or why not?
12. Can open-market policy, discount policy, and reserve requirement pohcy pursue different general objectives or should these various
instruments always be directed toward a conmion policy? When
differences of viewpoint among the different policy-determining groups
must be compromised in order to adopt a common policy, what are
the factors of strength and weakness in the position of each of the
parties to the compromise—i. e., the Board of Governors, the Federal
Reserve Bank President Members of the Federal Open Market
Committee, and the boards of directors of the Federal Reserve banks?
D. G E N E R A L CREDIT A N D MONETARY

POLICIES

13. Analyze the effects of the rising yield upon short-term Governments between August 1950 and March 1951 from the standpoint of
(a) effect upon the volume of bank loans, (6) effect upon the level of
private interest rates and the differential between those rates and the
yield on Governments, (c) effect upon the market prices and the volume
of sales of long-term Governments, (d) effect upon the policy of the
Federal Reserve System to support the long-term Governments.
14. Describe the mechanism by which a general tightening or easing
of credit, and the changes in interest rates which may result, is expected to counteract inflation or deflation. Discuss the impact on
borrowers and lenders in both the short-term and long-term credit
markets and on spending and savings. Indicate the effect on each
of the broad categories of spending entering into gross national
product. W^hat are the (actual or potential) capital losses or gains
that would be brought about by changes in interest rates? To what
extent is the effectiveness of a program of credit restraint affected by
or dependent upon expectations w i t h respect to subsequent changes in
interest rates? Distinguish in your discussion between small changes
in rates and large changes in rates.
15. How rapidly and to what extent would you expect the volume
of bank loans to respond to measures of general credit control under
present conditions?
16. Compare the applicability of general credit and monetary
measi^es and the resultant increases in interest rates as a means of
restraining inflation (a) when the Treasuiy is not expected to be a
J^rge borrower in the foreseeable future, (o) when a large volume of
ireasury refunding operations w i l l have to be effected in the foreseeable future, (c) when i t is expected that the Treasury \vill be a
wge net borrower during the foreseeable future, (d) under conditions
01 total war.
To what extent is the demand for United States Government
and other high-grade, fixed-interest-bearing securities by nonbank




18

GENERAIi

CREDIT CONTROL AND DEBT MANAGEMENT

investors influenced b y (a) the current level of interest rates, (6) expectations w i t h respect to changes i n interest rates, (c) other factors?
18. W l i a t is the reason for the relatively slight use b y (^mmercial
banks of the Federal Reserve discount and borrowing privilege? Do
you believe that greater reliance should be placed on this privilege as
a means of obtaining Federal Reserve credit? Under what conditions,
if any, would you expect to see a greater use made of the discount
privilege?
19. D o you believe that there is any conflict between measures to
restrain excess demand by credit control and the need for expanding
the economy to meet the reguirements of a continuing readiness to
resist aggression and a continuing high standard of living? I f so,
how can the effects of tliis conflict be mitigated?
20. W h a t do you believe to be the role of bank examination and
supervision i n furthering the objectives of the Employment Act?
21. What do yoxi consider to be the role of selective regulation of
consumer credit i n restraining inflation under the conditions of each
of the assumptions with respect to the magnitude of Government
borrowing stated in question 16? What attention should be given by
the controlling authority to inventories and price and employment
changes i n the particular industries affected by the regulation?
Discuss the operation of regulation W since its revival in the fall of
1950.
22. What do you consider to be the role of selective regulation of
real-estate credit in restraining inflation under the conditions of each
of the assumptions w i t h respect to the magnitude of Government
borrowing stated i n question 16? Discuss the operation of selective
regulation of real-estate credit during the past year.
23. W h a t do y o u consider to be the role of selective regulation of
stock-market credit i n restraining inflation imder the conditions of
each of the assumptions vnth respect to the magnitude of Government
borrowing stated i n question 16?
24. W h a t selective regidations, other than those over consumer
credit, real-estate credit, and stock-market credit do y o u consider to
be feasible? W h a t would be their applicability under the conditions
of each of the assumptions w i t h respect to the magnitude of Government borrowing stated in question 16?
25. Explain and evaluate the Voluntary Credit Restraint Program
which has been developed during the past year. W h a t are the precautions taken to insure fair treatment of competing firms? What
do y o u consider to be the role of voluntary credit restraint imder each
of the assumptions w i t h respect to the magnitude of Government borrowing stated i n question 16?
26. Discuss the use of moral suasion as a tool of credit control
H o w has this been used in the cases of member banks and of savings
institutions, including life insurance companies?
27. W h a t is the fimction of bank reserves? W h a t are present
reserve requirements w i t h respect to banks?
28. Shomd nonmember banks be required to maintain the same
reserves as member banks? W h y , or w h v not?
29. Discuss the advantages and disadvantages of basing reserve
requirements on types of deposits irrespective of the geographical
location of banks.




19

GENERAIi

CREDIT CONTROL A N D DEBT

MANAGEMENT

30. Discuss the advantages and disadvantages of requiring additional reserves which might be held in whole or in part i n the form of
Government securities. Illustrate w i t h a specific plan or plans.
31. Discuss the advantages and disadvantages of requiring during
the national defense emergency a supplementary reserve to be maintained against increases i n either loans and investments or deposits.
Illustrate with a specific plan or plans.
32. Discuss the advantages and disadvantages generally of maintaining bank reserves against classes of assets rather than against
classes of liabilities as at present.
33. State the statutory authority for the power, if any, of the Board
of Governors, the Federal Reserve banks, or of any agency of the
United States Government to control directly or to ' ' r a t i o n " the
extension of credit by individual banks. Specify the Gegal) circumstances under which such rationing could occur and the control of the
President over its operation. Under what (economic) circumstances,
if any, would you recommend the use of credit rationing? Describe
the manner i n wliich y o u believe that such a system would operate.
B. T H E B A N K I N G

STRUCTURE

34. Will you please submit a memorandum discussing the adequacy
of banking facilities i n your district? For this purpose, take as your
standard of adequacy the ideal of bringing banking facilities w i t h i n
convenient reach of all persons having need of them, and, so far as
practicable, giving all persons the opportunity of choosing between
two or more competing banks. Distinguish between deposit facilities
and loan facilities.
p. A V A I L A B I L I T Y

OF CAPITAL FOR SMALL BUSINESS

35. On the basis of information available about your district, discuss
the changes which have occurred during the last 25 years i n the ease
or difficulty ^vith which small-business men have been able to raise
capital or to borrow. W h a t i n your opinion are the reasons for such
changes as you find to have occurred? D o you believe that a more
liberal supply of capital and credit to small business would contribute
to the diffusion of economic power and to the dynamic character of
the economy? Wliat steps could be taken to bring about a more
liberal supply of capital and credit to small business? D o you believe
that any of these steps would be desirable? Distinguish between the
longer-term aspects of the problem and those of particular importance
o ^ ^uring the current national defense emergency.
36. Discuss the effects of bank examinations on the lending policies
of banks i n your district, particularly as they apply to loans to smallDusmess men. Distinguish i f necessary between examinations b y
C e r e n t examining authorities.




QUESTIONS FOR T H E COUNCIL OF E C O N O M I C
A. CONGRESSIONAL POLICY

ADVISERS

DIRECTIVES

1. D o you believe that tjie congressional declaration of policy contained i n the Employment A c t of 1946 is balanced i n its emphasis
upon high-level employjnent and upon price stability respectively, as
objectives of Federal Government policy? I f not, what changes have
you to suggest?
B. F O R M U L A T I O N

OF FISCAL A N D

MONETARY

POLICY

2. D o you believe that, subject to the statutes and general directives laid down by Congress, the fiscal and monetary policy of the
United States Government should be formulated under the direction
of the President? I f not, what suggestions have y o u for the coordination of the policies of agencies not under the direction of the President w i t h those of agencies which are under his direction? How
urgent do you consider this problem to be?
3. Discuss the rationale, advantages, and disadvantages of the
present division of authority in the Federal Reserve System over
the control of discount rates, open-market operations, and changes
i n reserve requirements.
c.

CREDIT A N D DEBT M A N A G E M E N T POLICY

4. Describe the mechanism by which a general tightening or easing
of credit, and the changes i n interest rates which may result, is expected to counteract inflation or deflation. Discuss the impact on
borrowers and lenders i n both the short-term and long-term credit
markets and on spending and savings. Indicate the effect on each of
the broad categories of spending entering into gross national product.
W h a t are the (actual or potential) capital losses or gains that would be
brought about by changes i n interest rates? T o w h a t extent is the
effectiveness of a p r o ^ a m of credit restraint affected by or dependent
upon expectations w i t h respect to subsequent changes i n interest
rates? Distinguish i n your discussion between small changes in
rates and large changes i n rates.
5. H o w rapidly and to what extent would y o u expect the volume of
bank loans to respond to measures of general credit control under
Dresent conditions? Discuss recent changes i n the volume of bank
oans.
6. W h a t is the reason for the relatively slight use hy commercial
banks of the Federal Reserve discount and borro^ving privilege? Do
you believe that greater reliance should be placed on this privilege as a
means of obtaining Federal Reserve credit? Under what conditions,
if any, would you expect to see a greater use made of the discount
privilege?
7. Discuss the economic effects of the increase in short-term interest
rates between August 1950 and March 1951 and the subsequent increase i n long-term interest rates. D o you approve or disapprove of
the policies which brought about these changes?
8. Discuss the appropriate roles of direct controls, selective credit
controls, and a generally restrictive credit policy as means of restraining
inflation (a) when the Treasury is not expected to b e a large b o r r o w e r
20




21

GENERAIi

CREDIT CONTROL AND DEBT

MANAGEMENT

in the foreseeable future, (6) when a large volume of Treasury refunding operations w i l l have to be effected in the foreseeable future, (c)
when i t is expected that the Treasury w i l l be a large net borrower
during the foreseeable future, (d) under conditions of total war.
9. Discu&s and evaluate the Voluntary Credit Restraint Program
which was initiated in the spring of 1951.
10. Do you believe that under existing law any agency of the Federal Government has the power to control directly or to " r a t i o n " the
extension of credit by individual banks? Under what economic circumstances, if any, would you recommend the use of this authority?
11. Do you believe t h a t there is any conflict between measures to
restrain excess demand b y monetaiy means and the need for expanding the economy to meet the requirements of a continuing readiness
to resist aggression and a continuing high standard of living? I f
so, how can the effects of this conflict be mitigated?
12. ^Miat do you believe to be the role of bank examination and
supervision in furthering the objectives of the Employment Act?
13. Discuss the economic functions of bank reserve requirements.
What suggestions, if any, do 3^ou have for changes i n either the
nature, appHcability, or amount of existing requirements? I f you
consider that each of several proposals for change has important
elements of attraction, discuss each.
14. Have you any suggestions other tlian those implied in the answer to the precedmg question for insulathig public debt securities
from the impact of restrictive credit poHcies designed primaril}'- to
discourage the growtli of private debt?
15. To what extent is the demand for Government securities b y
nonbank investors influenced b^^ (a) the current level of interest rates,
(b) expectations w i t h respect to changes i n interest rates, (c) other
factors?
16. AAliat advantages do you see in a stable long-term Government
bond market? W l i a t weight should be given to the desirabihty of
stability in the Government bond market m determining credit policy
under each of the assumptions w i t h respect to the volume of Government borrowing stated i n question 8?
. 17. Under what conditions, if any, do you believe i t would be desuable to resort to compulsory methods i n the sale of Government
securities to (a) banks, (6) other financial institutions, (c) other corporations, (d) individuals? Discuss the philosophy which underlies
your views on this matter.
18. Discuss the merits and demerits of the proposal for the issuance
pow
the value of which would be guaranteed i n terms of purchasing
19. Discuss the advantages and disadvantages of marketable and
nomnarketable securities (a) under present circumstances, (6) i n the
event of the necessity for substantial net Goverimient borrowing.
. 20. Wliat new types of securities, if any, do 3^ou believe sliould be
given serious consideration for use (a) under present conditions, (6)
int/?
the necessity for substantial net Government borrowD. DEPOSIT

INSURANCE

21. Discuss the advantages and disadvantages of extending Federal
^^posit msurance to all deposits m msured banks.




QUESTIONS FOR T H E

COMPTROLLER OF T H E

CURRENCY

' A . GENERAL PURPOSES OF OFFICE

1. Describe briefly the functions and mode of operation of your
office.
2. Describe the nature of the supervision exercised through examinations of banks b y your office. Specify the basic purpose or purposes of examination, and the principles which guide your examiners.
Distinguish between bank examination and bank audit, as evidenced
b y the methods followed b y your examiners in their work.
3. What directives, if any, have been ^ v e n to your office b y Congress w i t h respect to the economic objectives which i t should seek to
further in its operations? Cite appropriate statutes.
4. W h a t weight do you give i n the conduct of your office to the congressional declaration of policy contamed i n the Employment Act of
1946, where i t is stated:
T h e Congress hereby declares t h a t i t is t h e c o n t i n u i n g p o l i c y a n d responsib i l i t y of the Federal G o v e r n m e n t t o use a l l practicable means consistent w i t h its
needs a n d obligations a n d o t h e r essential considerations of n a t i o n a l p o l i c y , w i t h
the assistance a n d cooperation of i n d u s t r y , a g r i c u l t u r e , labor, a n d State a n d local
governments, to coordinate and utilize all its plans, functions, and resourois for the
purpose of creating a n d m a i n t a i n i n g , i n a manner calculat<»d t o foster a n d promote
free c o m p e t i t i v e enterprise a n d t h e general welfare, c o n d i t i o n s u n d e r w h i c h there
w i l l be afforded useful e m p l o y m e n t o p p o r t u n i t i e s , i n c l u d i n g self-employment,
f o r those able, w i l l i n g , a n d seeking t o w o r k , a n d t o p r o m o t e m a x i m u m employment, p r o d u c t i o n , a n d purchasing power. [ I t a l i c s supplied.]

Do you believe i t would be desirable that Congress ^ive your office a
more specific directive that i t should govern its activities, wherever
practicable, in the light of the general objectives of economic stability
and high-level employment? I f not, are there any other economic
directives which you would consider desirable?
5. W h a t do you believe to be the role of bank examination in
furthering the objectives of the Employment Act?
6. I n what ways, if any, other than through bank examination,
does your office endeavor to further the objective of economic stabilization?
7. What use do you make of the results of economic analysis in the
conduct of your office?
B, R E L A T I O N S H I P TO T H E

GOVERNMENT

8. T o what extent does your office operate under the direction of
the Secretary of the Treasury? Discuss i n the light of both the
statute and customary usage.
9. Does your office operate under the direction of the President
except as this direction is exercised through the Secretary of th€
Treasury?
10. D^escribe the relationships, from your point of view, among the
three Federal bank supervisory agencies. To what extent is there
22




23

GENERAIi

CREDIT CONTROL AND DEBT

MANAGEMENT

coordination of policies and procedures, and how is such coordination
brought about? To the extent that policy conflicts arise, how are
such conflicts resolved at the present time?
11. Does your office follow the practice of submitting its proposed
reports to Congress on pending legislation to the Bureau of the
Budget to determine whether or not they are in accordance w i t h the
program of the President? I f i t submits some, but not all of such
reports, what are the criteria by which those submitted are selected?
Does the Bureau of the Budget submit proposed reports of other
agencies of the Government to the Comptroller's office for comment?
12. Do you have any suggestions for legislation relative to your
office?
C. INCOME A N D EXPENSES OF T H E COMPTROLLER'S

OFFICE

13. What has been the income of your office in each year since
1933? Classify this income in any way which you believe will be
helpful to the committee.
14. Wliat have been the expenses of your office in each year since
1933? Classify the expenses in any way which you believe will be
helpful to the committee. Relate the administrative expenses of the
office to (i. e., express them as percentages of):
(а) The gross national product of the United States, and
(б) The expenses of all national banks.
(The purpose of these comparisons is to ''deflate" the expenses of the
office by factors which measure its workload in a rough manner and
automatically reflect changes in the price level.)
15. Describe the budgetary procedure of your office.. Is its budget
reviewed by the Bureau of the Budget? Are changes in its budget
made by the Bureau binding upon your office? How are its expenditures subject to congressional control? AVliat suggestions, if any,
do you have for changes in any of the procedures described in this
question?
16. Are the accomits of your oPRce audited by any other department or instrumentality of the United States Government? I f so,
by whom? Are the powers of the auditing authority limited to
reporting or does it have authority to disallow expenses? To whom
are the reports of the auditing authority sent?
17. List and discuss any expenses which have been incurred by your
onjce during the period since 1946 for the purpose of influencing public
opmion on controversial matters. Expenses for the preparation of
material in standard expository format and for the distribution or
presentation of such material in w i t t e n or ornl form to persons who
"light be expected to have a regular business or professional interest
m It may be omitted. Any expenses during this period for the preparation of motion pictures, illustrated brocJiures or any other special
material should be included, however irrespective of your personal
?pmion as to whether or not the material they contain is controvereial
m character, in order that the subcommittee may, if it desires, con^iner them on a case-by-case basis.
D. T H E B A N K I N G

STRUCTURE

18. Will you please submit a memorandum discussing the adequacy of banking facilities in the United States? For this purpose,




24

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

take as your standard of adequacy the ideal of bringing banking facilities within convenient reach of all persons having need of tUem, and,
so far as practicable, giving all persons the opportunity of choosii^
between two or more competing banks. Distinguish between deposit
facilities and loan facilities.
19. Discuss in general your policy in acting on applications for new
national bank charters. Stress your concept of what constitutes
ample banking facilities—especially the degree of competition which
you believe to be necessary or desirable.
20. Submit a statistical analysis showing year by year for the past
10 years the number of apphcations filed for national-bank charters,
branch permits, authority to convert into a national bank, and
authority to consolidate. State the number of such applications
approved, the number rejected and the causes for rejection, classified
b y such principal reasons as (a) existence of ample banldng facilities
(6) no prospect of successful financial operation, (c) inadequate capita
for the establishment of the bank or branch, (t/) no satisfactory
evidence that competent management would be available, etc. Submit
also statistics with respect to voluntary liquidations of national banks.
Comment on this analysis in any manner which you consider
appropriate.
E. AVAILABILITY

OF CAPITAL

FOR

SMALL

BUSINESS

21. Discuss the changes which have occurred during the last 25
years in the ease or difficulty with which small-business men have
been able to raise capital or to borrow. What i n your opinion are the
reasons for such changes as you find to have occurred? Do you believe
that a more liberal supply of capital and credit to small business
would contribute to the diffusion of economic power and to the
d}^amic character of the economy? What steps could be taken to
bring about a more liberal supply of capital and credit to small
business? Do you believe that any of these steps would be desirable?
Distinguish between the longer-term aspects of the problem and those
of particular importance today during the current national defense
emergency.
22. Discuss the effects of bank examinations on the lending policies
of banks, particularly as they apply to loans to small-business men.
Distinguish if necessary between examinations b y different examining
authorities.




QUESTIONS FOR T H E C H A I R M A N OF T H E FEDERAL
DEPOSIT INSURANCE C O R P O R A T I O N
A. GENERAL PURPOSES OP T H E

CORPORATION

1. Describe briefly the functions and mode qf operation of your
Corporation.
2. What dkectives, if any, have been given to your Corporation b y
Congress w i t h respect to the economic objectives which i t should seek
to further in its operations? Cite appropriate statutes.
3. ^^^lat w^eight do yon give in the conduct of your Corporation to
the congressional declaration of policy contained i n the Employment
Act of 1946, where i t js stated:
The Congress hereby doclarcs t l i a t i t is t h e c o n t i n u i n g p o l i c y a n d r e s p o n s i b i l i t y
of the Federal G o v e r n m e n t t o use a l l practicable means consistent w i t h its needs
and obligations a n d o t h e r essential considerations of n a t i o n a l p o l i c y , w i t h t h e
assistance and cooperation of i n d u s t r y , a g r i c u l t u r e , labor, a n d State a n d local
governments, to coordinate and utilize all its planSf functions^ and resourren f o r t h e
purpose of creating a n d m a i n t a i n i n g , i n a m a n n e r calculated t o foster a n d p r o m o t e
free competitive enterprise a n d the general welfare, conditions under w h i c h there
will be afforded useful e m p l o y m e n t o p p o r t u n i t i e s , i n c l u d i n g s e l f - e m p l o y m e n t , for
those able, willing, a n d seeking t o w o r k , a n d t o p r o m o t e m a x i m u m e m p l o y m e n t ,
production, a n d purchat^ing power. [ I t a l i c s supplied.]

Do you believe i t would be desirable that Congress give your Corporation a more specific directive that i t should govern its activities,
wherever practicable, i n the light of the general objectives of economic
stability and high-level employment? I f not, are there any other
economic directives which you would consider desirable?
B. ORGANIZATION

OF T H E

CORPORATION

AND

ITS

RELATIONSHIP

TO

GOVERNMENT

4. What is the responsibility of your Corporation to the President?
5. Can any policy conflicts between your Corporation, other Government agencies and the Federal Reserve System always be resolved i n
the last resort b y the President {a) insofar as action by your Corporation is required, (b) insofar as action b y other Government agencies is
required, and (c) insofar as action b y the Federal Reserve System is
requu^ed? D o you believe that the President should be empowered to
resolve all such conflicts, if this is not at present the case? I f you do
not believe that the President has or should have such power, what
means of resolving policy conflicts would you suggest?
Does the Federal Deposit Insurance Corporation follow the
practice of submitting its proposed reports to Congress on pending
legislation to the Bureau of the Budget to determine whether or not
they are in accordance w i t h the program of the President? I f i t
some, but not all of such reports, what are the criteria by
which those submitted are selected? Does the Bureau of the Budget
^ b m i t proposed reports of other agencies of the Government to the
i^ederal Deposit Insurance Corporation for comment?
office? ^ ^ ^
suggestions for legislation relative to your
C. EARNINGS A N D EXPENSES OP THE^ CORPORATION

.
yVliat have been the earnings of your Corporation i n each year
smce its organization? Classify earnings b y (a) net proceeds of deposit
25



26

GENERAIi

CREDIT CONTROL AND DEBT M A N A G E M E N T

insurance assessments, (6) interest on funds arising from accumulated
deposit insurance assessments, and (c) other. Eliminate earnings
arising from interest on Government capital.
9. What have been the expenses of your Corporation in each year
since its organization? Classify expenses as (a) administrative expenses, (b) liquidation expenses, and (c) deposit insurance losses.
Kelate administrative expenses to (i. e., express them as percentages
of):
(а) The gross national product of the United States, and
(б) The expenses of all insured banks.
(The purpose of these comparisons is to ''deflate'* the expenses of the
Corporation by factors which measure its workload in a rough manner
and automatically reflect changes in the price level.)
10. Present a statement of the e^enses of your Corporation for
each of the last 5 years, classified in such manner as w i l l facilitate
an analysis of your operations.
11. Describe the budgetary procedure of the Federal Deposit Insurance Corporation. Is its budget reviewed by the Bureau of the
Budget? Are changes in its budget made by the Bureau binding upon
the Corporation? How are its expenditures subject to congressional
control? What suggestions, if any, do you have for changes in any
of the procedures described in this question?
12. Are the accounts of your Corporation audited b y any other
department or instrumentality of the United States Government?
I f so, by whom? Are the powers of the auditing authority limited
to reporting or does i t have authority to disallow expenses? To whom
are the reports of the auditing authority sent?
13. List and discuss any expenses which have been incurred by your
Corporation during the period since 1946 for the purpose of influencing
public opinion on controversial matters. Expenses for the preparation of material in standard depository format and for the distribution
or presentation of such material in written or oral form to persons
who might be expected to have a regular business or professional interest in i t may be omitted. Any expenses during this period for the
preparation of motion pictures, illustrated brochures, or any other
special material should be included, however, irrespective of your
personal opinion as to whether or not the material they contain is
controversial in character, in order that the subcommittee may, if it
desires, consider them on a case-by-case basis.
D. DEPOSIT

INSURANCE

14. Present the latest available data w i t h respect to the number of
banks which are members and the number which are not members of
the Federal Deposit Insurance Corporation, the amount of deposits in
each such class of banks, and the number and proportion of accounts
and of deposits respectively i n insured banks which are fully covered
b y deposit insurance. Please present the data for mutual savings
banks and for other banks separately.
15. Present the data, as far as they are available, year by year
since the establishment of the Corporation, showing the total a m o u n t
of deposits in all insiu-^d banks, the amount of insured deposits, the
amount of the insurance fund, and the ratio which the insurance fund
bears to total deposits and to insured deposits, respectively.




27

GENERAIi

CREDIT CONTROL A N D DEBT

MANAGEMENT

16. Describe the alternative techniques available under present
law for the protection of depositors in failed or insolvent banks.
Discuss the criteria by which the Corporation selects the manner i n
wMch it will handle each case. Do you consider i t an element of
potential inequity that some techniques result in the protection of all
deposits while other techniques provide only for the protection of
deposits up to $10,000?
17. State for each year since the establishment of the Corporation
the number and amount of liabilities of failed and insolvent banks
which have been handled in accordance w i t h each of the techniques
discussed in the preceding question.
18. Discuss the advantages and disadvantages of extending the
coverage of deposit insurance to all deposits in insured banks. I n
your discussion, stress the role of deposit insurance in contributing t o
economic stability.
E. B A N K

EXAMINATION

19. Whsit do you believe to be the role of bank examination and
supervision in furthering the objectives of the Employment Act?
F. R E S E R V E

REQUIREMENTS

20. Discuss the function of bank reserve requirements, stressing^
their role in credit control. What are the arguments for and against
subjecting all insured banks to the same reserve requirements a&
member banks of the Federal Reserve System?
•

G. T H E B A N K I N G STRUCTURE

21. Will you please submit a memorandum discussing the adequacy
of banking facilities i n the United States? For this purpose, take as
your standard of adequacy the ideal of bringing b a n l ^ g facilities
pdthin convenient reach of all persons having need of them, and, so
far as practicable, giving all persons the opportunity of choosing
between two or more competing banks. Distinguish between deposit
facilities and loan facilities.
H. A V A I L A B I L I T Y OP CAPITAL FOR SMALL BUSINESS

22. Discuss the changes which have occurred during the last 25
years in the ease or difficulty w i t h which small-business men have been
able to raise capital or to borrow. What i n your opinion are the
reasons for such changes as you find to have occurred? Do you
believe that a more liberal supply of capital and credit to small
business would contribute to the diffusion of economic power and to
the dynamic character of the economy? What steps could be taken to
bring about a more liberal supply of capital and credit to small
business? Do you believe that any of these steps would be deskable?
•Uistinguish between the longer-term aspects of the problem and those
of particular importance today during the current national defense
emergency.
piscuss the effects of bank examinations on the lending policies
banks, particularly as they apply to loans to small-business men.
-Uistoguish if necessary between examinations by different examining




QUESTIONS FOR T H E ADMINISTRATOR OF T H E
STRUCTION FINANCE CORPORATION

RECON-

Discuss the changes which have occurred during the Hfe of the
Reconstruction Finance Corporation i n the ease or difficulty w i t h
which small-business men have been able to raise capital or to borrow. What in your opinion are the reasons for such changes as you
find to have occurred? Do you believe that a more liberal supply of
capital and credit to small business would contribute to the diffusion
of economic power and to the dynamic character of the economy?
What steps could be taken to bring about a more liberal supply of
capital and credit to small business? Do you believe that any of
these steps woidd be desirable? Distinguish between the longer-term
a^ects of the problem and those of particdar importance today
during the current national defense emergency.
28




QUESTIONS FOR STATE BANK

SUPERVISORS

1. What do you believe to be the role of bank examination and
supervision in maintaining economic stability?
2. Discuss the advantages and disadvantages of extending the
coverage of deposit insurance to include all accounts i n insured banks.
Do you believe that this should be done?
3. What do you believe to be the principal functions of bank reserve
reqmrements? Do you believe that all insured banks should be
subject to the same reserve requirements as member banks of the
Federal Reserve System? Why, or why not?
4. Discuss the adequacy of banking facilities in your State. For
this purpose, take as yom- standard of adequacy the ideal of bringing
banking facilities w i t h i n convenient reach of all persons having need
of them, and, so far as practicable, giving all persons the opportunity
of choosing between two or more competing banks. Distinguish
between deposit facihties and loan faciUties.
5. Discuss in general your policy in acting on applications for new
State-bank charters. Stress your concept of what constitutes ample
banking facilities—especially the degree of competition which you
believe to be necessary or desirable.
6. Would you please submit a statistical analysis showing year by
year for the past 10 years the number of applications filed for Statebank charters in your State, the number approved, the number
rejected, and the causes for rejection, classified by such principal
reasons as (a) existence of ample banking facilities, (6) no prospect of
successful financial operation, (c) inadequate capital for the establishment of the bank or branch, (d) no satisfactory evidence that
competent management would be available, etc.? Comment on this
analysis in any manner which you consider appropriate.
Discuss the changes during the past 25 years in the ease or
difficulty with which small-business men can borrow from their local
banks in your State. Explain the reasons for such changes as you
nnd to have occurred. Do you believe that a more liberal lending
policy by commercial banks to small-business borrowers would
contribute to the diffusion of economic power and to the dynamic
character of the economy? What steps could be taken to foster
such a policy? Distinguish between the longer-term aspects of the
problem and those of particular importance today during the current
national defense emergency.
8. Discuss the effccts of bank examinations on the lending policies
of banks in your State, particularly as they apply to loans to smallopsincss men. Distinguish if necessary between examinations by
amerent examining authorities.




29

QUESTIONS FOR ECONOMISTS
1. What are your views of the effects of credit policies resulting i n
relatively small and relatively large changes in interest rates, respectively, upon (a) the lending pohcies of commercial banks, (b) the
lending policies of nonbank investors, (c) consumer saving, (d) business plant expenditure programs, (e) business inventory policy?
2. How important do you consider the expansion of credit to be i n
the totality of factors underlying the post-Korean inflationary boom?
The postwar boom i n 1945-48? How would you appraise the effectiveness of (a) general and (b) selective credit policy i n coping w i t h
(i) a high levd of private capital investment, (ii) a high level of coasumer spending, (iii) large present or prospective Government expenditures, (iv) the wage-price-farm support spiral?
3. What do you believe to be the appropriate roles of direct (e. g.,
price and wage) controls, selective credit controls, and a general
tightening of credit as means of restraining inflation (a) when the
Treasury is not expected to be a large borrower i n the foreseeable
future, (6) when a large volume of Treasury refunding operations w i l l
have to be effected i n the foreseeable future, (c) when i t is expected
that the Treasury will be a large net borrower during the foreseeable
future, (d) under conditions of total war?
4. Do you believe that i t would be (a) desirable and (6) possible to
insulate public debt securities in whole or i n part from the impact of
restrictive credit policies designed primarily to discourage the growth
of private debt? Do you have any concrete suggestions for action i n
this r ^ a r d ?
5. To what extent do you believe that the demand for Government
and other high-grade, fixed-interest-bearing securities b y nonbank i n vestors is influenced b y (a) the current level of interest rates, (6) expectations with respect to changes in interest rates, (c) other factors?
6. Discuss the merits and demerits of the proposal for the issuance
of a bond, the value of which would be guaranteed in terms of purchasing power.
7. What types of securities do you believe should be the principal
vehicles of Government borrowing (a) under present conditions, (6) i n
the event of the necessity for substantial net Government borrowing?
8. Under what conditions, if any, do you believe i t would be desirable to resort to compulsory methods i n the sale of Government securities to (a) banks, (6) other financial institutions, (c) other corporations,
(d) individuals?
80




QUESTIONS FOR

BANKERS

L Have the lending policies of your bank changed since July 1950?
I f so, what has been the general character of the change? Specifically,
what change has occurred in your lending policies w i t h respect to:
(a) Regular commercial customers, (b) occasional commercial borrowers, (c) real-estate loans, (d) consumer loans?
2. Have the investment policies of your bank changed since July
1950? Discuss the change in terms of: (a) Purchase of municipal
secmities, (6) pm-chase of corporate securities, (c) management of your
Government security portfolio.
3. Discuss the factors which contributed to the changes in your
policies described in the two preceding questions, and your evaluation
of the relative importance of each factor. Please give consideration
to the following: (a) Increases in short-term interest rates, (b) declines
in prices of long-term Government bonds, (c) increases in reserve requirements around the turn of the year, (d) moral suasion (including
the Voluntary Credit Restraint Program), (e) changes in prices and
in the business outlook.
4. Do you believe that i t was wise to abandon the par support of
long-term Government bonds in March 1951? I f not, would you have
considered i t wise at another time or under other conditions? When,
or under what conditions? I f you favored the abandonment, would
you have preferred that i t be done earlier? When?
5. What do you consider to be the principal functions of bank
reserve requirements? Do you believe that nonmember banks
should be required to hold the same reserves as member banks of the
Federal Reserve System?
^ 6. Comment on the proposal (advanced in the Wilson report and
m several annual reports of the Board of Governors of the Federal
Reserve System) that banks be required to hold reserves additional
to those now required, such reserves to be held at the option of the
bank m specified classes of United States securities.
7. Do you believe that the coverage of Federal deposit insurance
should be extended to include all deposits in insiired banks? Why,
or why not?
^ 8. To what extent do you believe that bank examination and supervision should be used as instruments for furthering the objective of
economic stability?
9, I n your experience, have regulation X (real-estate loans) and
regulation W (consumer loans) of the Board of Governors of the
Federal Reserve System been successful in accomplishing their
respective objectives? Have they been fan* and equitable in admmistration?
10. What do you consider to be the advantages and disadvantages
of the ownership of the stock of the Federal Reserve banks by member
banks? Do you believe that ownership b y the United States Government would be more desirable?




31

QUESTIONS FOR LIFE INSURANCE C O M P A N Y

EXECUTIVES

1. Describe the policy of your company w i t h respcct to changes in
its portfgho of (a) United States Government securities, (6) State and
municipal securities, (c) corporate securities, and (d) mortgages during
the period from the end of the war to June 1950, and state in a general
way the reasons for this policy.
2. Describe the changes, if any, in your policy w i t h respect to holdings of United States securities, corporate securities, and mortgages
since Jime 1950. I f your policy diu-ing this period has changed, evaluate roughly the relative importance of (a) changes in the relative
attractiveness as investments of the different classes of securities,
(b) changed Federal regulations w i t h respect to mortgages, (c) moral
suasion, directly or indii*ectly, by the Federal Reserve System (including the Voluntary Credit Restraint Program), (d) the emergence of
potential capital losses on United States securities in your portfolio,
and (e) other factors, in bringing about the change in policy.
3. I f the Treasury should have to engage in substantial net borrowing during the foreseeable f-uture, what class or classes of securities do
you believe i t should offer to life insurance companies?
32




QUESTIONS FOR U N I T E D STATES G O V E R N M E N T SECURITY
DEALERS
1. What, in general terms, has been the response of your customers
(in terms of buying, selling, and holding United States securities) to
the various credit policy and debt management moves made by the
Treasury and the Federal Reserve System since the outbreak of the
war in Korea? Distinguish, if you desire, between successive phases.
2. What has been the effect of the changes i n credit policies since
the outbreak of the war i n Korea upon the preferences of your customers as between short-term, intermediate, and long-term United
States securities? Distinguish between classes of customers.
3. Do you believe t h a t i t was wise to abandon the par support of
long-term Government bonds i n M a r c h 1951? I f not, would 3^ou have
considered i t wise at another time or under other conditions? When,
or under what conditions? I f you favored the abandonment, would
you have preferred ,that i t be done earlier? \^^len?
4. To what extent is the demand for lohg-term United States Government and other high-grade, fixed-interest-bearing securities b y
nonbank investors influenced b y (a) the current level of interest
rates, (6) expectations w i t h respect to changes i n interest rates, (c)
other factors?
5. What types of securities do you believe should be the principal
vehicles of United States Government borrowing (a) under present
conditions, (b) i n the event of the necessity for substantial net Government borrowing? Discuss both marketable and nonmarketable
securities.
33




B I B L I O G R A P H Y OF T H E JOINT C O M M I T T E E ON T H E ECON O M I C REPORT, MATERIALS ON GENERAL CREDIT CONT R O L , D E B T M A N A G E M E N T , A N D R E L A T E D SUBJECTS

I n f l a t i o n S t i l l A Danger. R e p o r t of t h e J o i n t C o m m i t t e e ^vith materials on
N a t i o n a l Defense a n d t h e Economic O u t l o o k (August 1951).
J a n u a r y 1951 Economic R e p o r t of t h e President, R e p o r t of the J o i n t C o m m i t t e e
o n the. M a r c h 1951. (See pp. 3 - 1 0 , 20, 31-46, 82-86, 102-107.)
J a n u a r y 1951 Economic R e p o r t of the President, hearings on (January 22, 24, 25,
26, 29, 31 a n d F e b r u a r y 2, 1951).
E c o n o m i c a n d P o l i t i c a l Hazards of an I n f l a t i o n a r y Defense E c o n o m y (prepared
h v t h e J o i n t C o m m i t t e e Staff) ( F e b r u a r y 1951).
J a n u a r y 1950 Economic R e p o r t of t h e President, R e p o r t of the J o i n t C o m m i t t e e
on (S. R e p t . N o . 1843), June 1950. (See p p . 16-20, 22, 27-31, 67-80, 97-103,
106.)
V o l u m e a n d S t a b i l i t y of P r i v a t e I n v e s t m e n t (final r e p o r t of the Subcommittee
on I n v e s t m e n t ) ( M a r c h 1950).
M o n e t a r y , C r e d i t a n d Fiscal Policies, report of the Subcommittee o n (S. Doc.
N o . 129) ( F e b r u a r y 1950).
J a n u a r y 1950 Economic R e p o r t of the President, hearings on t h e (January 17, 18,
19, 20, 1950).
V o l u m e a n d S t a b i l i t v of P r i v a t e I n v e s t m e n t , hearings on ( p t . 1, September 27,
28, 29, 1949) ( p t . 2, December 6, 7, 8, 9, 12, 13, 14, 15, 16, 1949).
M o n e t a r y , C r e d i t , a n d Fiscal Policies, hearings on (September 23, N o v e m b e r 16,
17, 18, 22, 23 a n d December 1, 2, 3, 5, 7, 1949).
M o n e t a r y , C r e d i t a n d Fiscal Policies (collection of statement? b y Government
official's, banker?, economists, a n d others) ( C o m m i t t e e P r i n t ) (November 1949).
V o l u m e a n d S t a b i l i t y of P r i v a t e I n v e s t m e n t , Factors Affecting the (Materials
o n the I n v e s t m e n t P r o b l e m assembled b y t h e staff of the S u b c o m m i t t e e ou
I n v e s t m e n t ) ( C o m m i t t e e P r i n t ) (October 1949).
Federal Expenditures a n d Revenue Policies, hearings on (September 1949).
E c o n o m y of t h e South (The I m p a c t of Federal Policies on the E c o n o m y o f the
South) ( C o m m i t t e e P r i n t ) ( J u l y 1949).
J a n u a r y 1949 Economic R e p o r t of the President, R e p o r t of t h e J o i n t Committee
on the (S. R e p t . N o . 88). M a r c h 1949. (See p p . 4 - 2 6 , 62-71.)
J a n u a r y 1949 Economic R e p o r t of the President, hearings on the (February S, 9,
10, 11, 14, 15, 16, 17, 18, 1949).
C o r p o r a t e Profits, hearings o n (December 6, 7, 8, 9, 10, 15, 16, 17, 20, 21, 1948)J a n u a r y 1948 Economic Report of the President, Report of t h e J o i n t Committee
on t h e (S. R e p t . N o . 1358) M a y 8, 1948. (See pp. 3 - 5 , 23-28, 40, 50-58)C r e d i t Policies, hearings o n ( A p r i l i 3 and 16, M a y 12, 13, 27, 1948).
President's P r o g r a m t o D e a l W i t h the Problems of I n f l a t i o n , I n t e r i m R e p o r t on
t h e (S. R e p t . N o . 809) (December 1947).
A n t i - I n f l a t i o n P r o g r a m as Recommended i n t h e President's Message of Xovem*
her 17, 1947, hearings on ( N o v e m b e r 21, 24, 25, 26, 28, December 2, 3, 4, 5,
a n d 10, 1947).
C u r r e n t Price D e v e l o p m e n t s a n d t h e Problem of Economic Stabilization, hearing®
o n (June 24, 25, 26, J u l y 2, 8, 9, 10, 14, 15, 16, a n d 17, 1947).
34