Evening star., 1951-02-04
Continued From First PageD


defense financing programs both
as to refunding and new issues.
At the root Of the controversy
between the Treasury and board
officials are two major questions:
Is the Federal Reserve System.
created by Congress in 1913 as an
independent agency to control the
credit structure being dominated
by the Administration and the
Treasury?
Does the Treasury's so-called
"easy money" policy of low in
terest rates add to imitation?
Secretary of the Treasury
Snyder has defended that policy.
He warned recently that an in
crease of as much as one-half
of one per cent In the average
rate of interest on outstanding
Treasury obligations would boost
debt carrying charges by SIS
billion q year.
Douglas Is Foe of Policy.
That policy is disputed not only
by some board members but also
by some influential members of
Congress. notably Senator Doug
las. Democrat Of Illinois, chair
man of Joint Economic Com
mittee group that last year looked
into the problem. Senator Doug
last repeatedly will lead a con-
gressional drive against what he
has called "the Treasury's devo-
ton to low interest rates that
will ultimately cost the Govern
ment and taxpayers far more in
higher prices for goods and serv-
ices"
Mr.. Eccles. in disclosing a rec
ord of what took place at the
White House meeting, explained
that the committee, made up of
the seven board members and
presidents of Federal Reserve
banks in five metropolitan cen
ters, agreed on the record. He
added, however, that:
ANY other comment would be
superf1uous. I am giving you this
solely on my own responsibility
and without the knowledge of
other members of the committed.
1t is most unfortunate that this
vitality important matter of mon
etary and credit control which
Congress has placed in the Fed
eral Reserve System has been
raised in a manner which only
needlessly adds to the confusion" "
McCabe Confers With Truman.
Following a notation that
Chairman McCabe had met with
Mr.. Truman in the President S
Office shortly before the meeting
with the committee in the Cab
met room. the record continued: ::
The President stated that dur
ing the past few weeks he had
met with many groups in Gov
ernment because he wanted them
to know the seriousness of the
present emergency and to ask for
their full assistance and co-opera-
ton. He stated that the present
emergency is the greatest this
country has ever faced. including
the two World Wars and all the
preceding wars.
THE President emphasized that
we must combat Communist in
fluence on many fronts. He said
one way to do this is to maintain
confidence in the Governments S
credit and in Government securi-
ties. He felt that if people lose
confidence in Government securi-
ties all we hope to gain from our
military mobilization, and war if
need be. might be jeopardized.
He recalled his wartime expert
ence when he bought Liberty
bonds out of his soldiers pay.
When he returned from France
and had to sell his bonds to buy
clothes and other civilian things,
he got only $50 or a little more
for his hundred dollar bonds and
later they were run up to S125.
He said he did not want the peo-
pie who hold our bonds now to
have done to them what was done
to him.
He stated that most politicians
would not ask for higher taxes
prior to election but that he had
vetoed a reduction in taxes before