Evening star., 1951-02-06
Vardaman Accuses
EccIes Of QUESTIONING
Truman S Veracity
By Fronk O'Brien
Associated Press Stoff Writer

An old friend of President Tru-
man on the Federal Reserve Board
has accused another board mem
ber of an apparent attempt" to
cast doubt on the Presidents s
truthfulness.
James K. Vardaman, jr., a
friend of the President when Mr..
Truman was Senator and Mr..
Vardaman was a st. Louis shoe
manufacturer, spoke up yesterday
in defense of the President.
He said in statement the Pres
1dent had been allowed to get a
tragic" impression that the
credit controlling board would
support the administration low
interest, Cheap money" policy
when most members apparently
knew they were not going to carry
out the Presidents wishes"
Memorandum Attacked.
Mr.. Vardaman attacked a mem
orandum on meeting January 81
between the President and the 12-
man Federal Reserve Open Market
Committee, composed of the seven
Federal Reserve Board members
and five Federal Reserve Bank
presidents.
The memorandum was written
from memory, Mr.. Vardaman
said, by Rudolph M. Martin of the
Federal Reserve Board and was
made public over the week end
by Mariner S. Eccles, former
chairman of the board who was
denoted to member by Mr.. Tru-
man three years ago.
Mr.. Vardaman's statement said
Mr.. Eccles had no authorization
from the board or the committee
to make the memo public, and
all committee members had not
approved it as Mr.. Eccles said
they had.
Sterilization Disputed.
The memorandum, as given out
by Mr.. Eccles. lacked anything
to support a White House state
ment the day after the Presi-
dents meeting with the commit
tee that the Federal Reserve
Board had pledged itself to sta
bilize the market for Government
securities at present levels and
keep them there during the emer-
gency. Mr.. Eccles said he made
the memorandum public because
he was "astonished" at the White
House statement.
Mr.. Vardaman called Mr.. Ec-
cles' action IAN apparent attempt
. . to question the veracity of
the presidency in its dealings with
this board"
Mr.. Truman and Secretary of
the Treasury Snyder want the
Federal Reserve, through it's Open
Market Committee, to continue
buying Government securities in
the open market in sufficient
quantity to keep their price at
their present par or above-par
quotations.
The Federal Reserve Board has
argued that the Open Market
Committee should cease support
buying of Government securities
and allow them to find their own
level. This would probably mean
a general drop in the market value
of the securities.
That, in turn, would mean the
Government would be paying
higher interest on it's securities be-
cause interest is paid on the face
value of the issues regardless of
their market value.
Correct in Essential Details.
Gov. Eccles' memorandum"
Mr. Vardaman said, was correct
in essential details as to the words
which we're spoken during the
(January 81 meeting with the
President, but the memorandum
did not attempt to set forth the
impressions and general atmos-
phere prevailing. . My own i'm
preston was that the President
of the United States had been
allowed to leave the conference
room with the definite impression
in his heart and mind that the
Federal Open Market Committee
would support the Government
financing and bond program :"