Evening star., 1949-11-27
Moneta1yPoHcy HcyStudied

and other respondents to the
aforementioned committee ques-
tionnaires. Not even in a single
agency is there always harmonious
approach to the questions of eco
nomic stabiliZation.
The hearings show, as we have
seen, MessrS. Harl and Williams
disagreeing on bond market sup
port by the Federal Reserve.
Chairman McCabe of the Federal
Reserve Board, in his written reply
to the committee and. doubtless,
in his forthcoming personal ap-
pearance, wants greater Reserve
Board influence over non-member
banks-the State-chartered insti-
tutions which have not Joined the
system, but this Mr.. Harl strongly
resists.
Bond Disagreement
There are other examples: Mr..
Robertson clearly believes that the
Federal Reserve Board. if un-
checked, will use its power Of ex-
amining member banks too much
as an instrument of broader credit
control. But Mariner Eccles Of
the Federal Reserve Board sees
nothing wrong with such use Of
the examining power. Secretary
of the Treasury Snyder, through
the committee QUESTIONABLE, has
invited Congress to repeal the sill
ver- subsidy laws, whereas Mr..
McCabe avoided answering the
QUESTIONABLE directly on this
point. And Mr.. McCabe. Incl
dentally. spoke to the committee
only for himself, other members
Of his board being known to dis
agree with him in various re-
spects. The RFC wants to hold
on to it's ward. the Federal Ma
tional Mortgage Association, while
the Housing and Home Finance
Agency's Raymond G. ("Barkis"D
Foley testified it would be willing
to make home for Fanny May"
The Federal Reserve Board chair
mans proposal that the Reserve
banks take over some Of the pres
ent powers Of the RFC to lend to
business was vigorously rejected
by the RFC. And so it goes.
Although the Federal Reserve
Board members recently had their
pay increased by Congress to $16,-
900, both board members and
bankers have informed the COM
mittee that considerably higher
pay is necessary if the board is
to attract competent" men and
give them the prestige they need
in standing up" to the Treasury.
E. E. Brown, Chicago banker,
went so far as to say that the
stature of Federal Reserve Board
members is more important than
the specific powers Congress gives
the board. The bankers have in
mind that before long there will
be two vacancies on the board.
Mr.. Eccles plans to return to pri-
vate banking and Mr.. Ernest
Draper is scheduled to retire in
February. Replying to a ques-
ton, Mr.. Brown described as the
main weakness of the board to
date the caliber of the men on it.
The subcommittee has heard
from Federal Reserve Board Men,
ber Mariner S. Eccles. Banker E.
E. Brown Of Chicago, the CED and
the CIO. Still to appear before
the committee are two major ac-
tors on the stage of Federal eco
nomic management through credit
control: Secretary Of the Treas
ury Snyder and Federal Reserve
Board Chairman McCabe.
Board Criticized
In Mr.. Eccles' view, the central
banking authorities will have to
contend with dictation from the
Treasury. so long as the Govern
ment has a large debt to refund
periodically. This means "for-
ever" he testified. Our large
public debt. in other words. is
here to stay. Nor would a ma
tional council set up to co-ordi-
nate Government credit policies
be recommended by Mr.. Eccles;
it would reduce the independence
of the board, not increase it."
Gold and silver have played
thus far a subordinate role in the
testimony. Banker witnesses
want repeal of the Secretary of
the Treasury's powers to increase
the price of gold under the 1884
Gold Reserve Act. Recent state
ments by the Treasury relative to
the effect of the Breton Woods
act on those powers have not en-
tirely reassured the bankers. They
want the law made clear.
Ultimately. but not now, the
bankers want the United States
to return to domestic converti-
bility Of the currency in gold. If
all countries did likewise, said
Mr.. Brown, the World Fund would
lapse into "innocuous desuetude,"
OF the United States silver
purchase laws the Chicago banker
said: "It's just a subsidy and an
entirely unjustifled subsidy -
For Gods sakes don't call it
monetary policy"
Apart from control over bank
credit and the bond market, be-
fore the hearings end more may be
heard about the price of gold and
the administrations powers to
change it.
Possibly this subcommittee won't
reach any definite conclusions by