PERSONAL ANDCONFIDENTIAL March 2U, 19U7-

Dear J.R. :

For your personal and confidential information,I enclose a copy of a report that I have also sent confi-dentially to Bandy Gilbert. I wanted, if possible, toget from him and also from you a similar report of Vardaman'sactivities in your area. I am obtaining information from thevarious Federal Reserve districts which he visited. It allseems to follow much the same line, according to oral andwritten information I have so far received.

It occurred to me that you would have the informa-tion about Houston as Bandy would about Dallas. I would beparticularly interested in any supplemental information youmight have, including criticism of John Snyder and the "WhiteHouse. I understand that there was a good deal of this fromtime to time in conversations.

With best regards,

Sincerely yours.

Mr* J. R. Parten, President,Woodley Petroleum Company,Houston, Texas.

Enclosure

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FEDERAL RESERVE BANK OF DALLAS

IJ. R. PARTENCHAIRMAN 0" THE BOARD

April 22, 1947

Fersonal and Confidential

Mr. Karriner S. Eccles,Chairman, Board of Governors,Federal Reserve System,Washington, D. C.

Dear Marriner:

Enclosed you will find a report whichI believe is factual on Governor Vardaman1saddress upon his visit to Houston on January8th. I am attaching this in duplicate.

I believe this presents a fair storyof his remarks here.

It is very clear to me that GovernorVardaman1s conduct has been a discredit tothe Administration which appointed him. Idon't think this has been intentional, but onthe other hand in his zeal to condemn allregulations he has struck at the President aswell as other administrators in Washington.

Trusting that this confidential reportto you ^̂ rill serve some constructive purpose,and with my best personal regards, I am

Sincerely yours,

Enclosures (2)

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Memorandum Report on Governor Vardaman1sAddress at a Luncheon at the Rice Hotel.

Houston. Texas, on Wednesday. January 8. 1947

This luncheon was arranged by the Vice President inCharge, Mr. Pondrom, of the Houston Branch of the FederalReserve Bank of Dallas, Texas.

Those invited to this luncheon were all the Directorsof the Houston Branch, the Chairman of the Federal ReserveBank of Dallas and several leading bankers and prominentbusiness men of Houston. A list of those who attended isattached hereto and marked "Exhibit A".

Governor Vardaman was the honor guest at this luncheonand was introduced by J. R. Parten, Chairman of the Boardof Directors of the Federal Reserve Bank of Dallas.

Governor Vardaman began his remarks by saying that hehad been chosen a governor of the Federal Reserve Systemin the absence of any effort or expressed desire upon hispart; that upon acceptance of the office he was aware thathis philosophy of government departed widely from that ofmany of those responsible for administration in Washington.

He renuested that his remarks be "off the record".

He took the thesis that bureaucratic controls whichhave grown up in Washington in the past several years andexist today are destructive of constitutional governnent.He said that a return to constitutional government wouldreouire the elimination of all controls then exercised bythe several departments and bureaus of the Federalgovernment. „

He said that while he might cite many departmentsnow exercising bureaucratic controls, which he was con-demning, he would take the actions of the Board of Governorsof the Federal Reserve System, of which he was a member, asprime examples. He particularly condemned Regulations T,U and W as examples of unnecessary regulations in the dis-charge of Federal Reserve responsibility and said they wereunauthorized by the Congress. While no other specificregulations were condemned specifically, his attack clearly

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went to those issued by all departments from the Executivebranch down.

Governor Vardaman concluded with a. forceful plea tothose oresent to write, wire or talk to their Congressmenin the interest of abolishing these controls.

After his talk he invited Questions and comments.

It was rather amusing that in his comment Mr. JesseJones, who said he was entirely in sympathy with theGovernor's objectives, asked to be permitted to spread uponthe front page of the Chronicle that afternoon a resume ofthe talk. Governor Vardaman responded that he would muchprefer to be off the record and reasoned that the mosteffective way to get results in Washington would be forthose interested tc communicate with their representativesin Congress.

It was also amusing that one of the prominent businessmen in the group, after saying he was one hundred percentin agreement with the philosophy and objectives of theGovernor, urged forcefully that the Governor take back tothe White House a message detailing the shock and concernof business men generally over the President's labor plankput forth in his report to Congress on the state of theUnion a few days before. Governor Vardaman again demurredand insisted that the appropriate means of getting thismessage over was through your congressional representative.

In his criticism of bureaus or departments theGovernor celled no names, as I recall, but the implicationwas clear that his attack was upon the whole Democraticadministration as well as bipartisan bureaus which havefostered and administered regulations.

While his attack was particularly directed at his col-leagues on the Federal Reserve Board, it was crystal clearthat it was directed at all departments. It was clear thathis plea was designed to create dissatisfaction with allregulations indiscriminately, without differentiatingbetween those apparently accepted beyond controversy, suchas the Securities and Exchange regulations, and those whichmight be characterized as more controversial.

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Personally, I took the speech, and feel others did,as purely political with the especial objective of revolu-tionizing the policies and procedures established and followedby the Federal Reserve System. It was clear that his col-leagues upon the Board of Governors, as well as other promin-ent leaders in the Administration, were out of step with him.

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EXHIBIT A

BARKERS AND BUSINESSMEN IN HOUSTON, TEXAS ATTENDING LUNCHEON HONORINGGOVERNOR JAMES K. VARDAMAN. JR., ON JANUARY 8. 1947

Mr. J. A. Elkins, PresidentCity National BankHouston, Texas

Mr. Jno. M. Griffith, Vice PresidentCity National BankHouston, Texas

Mr. T. P. Priddie, PresidentFederal Intermediate Credit BankHouston, Texas

Mr. Joel H. Berry, PresidentSouth Main State BankHouston, Texas

Mr. Sterling Evans, PresidentFederal Land BankHouston, Texas

Mr, F. M. Law, Chairman of the BoardFirst National BankHouston, Texas

Mr. P. P. Butler, PresidentFirst National BankHouston, Texas

Mr. C. M. Malone, Vice Chairman of the Bd,Second National BankHouston, Texas

Mr. L. R. Bryan, Jr., PresidentSecond National BankHouston, Texas

Mr. C. G. Andler, Ex. Vice PresidentIndustrial Stste BankHouston, Texas

Mr. F. C. Guthrie, Vice PresidentHarris"burg National BankHouston, Texas

Mr. 0. R. Weyrich, PresidentHouston Bank & Trust CompanyHouston, Texas

Mr. Melvin Rouff, First Vice PresidentHouston National BankHouston, Texas

Mr. A. D. Simpson, PresidentNational Bank of CommerceHouston, Texas

Mr. B. Magruder Wingfield, Vice Pres. &National Bank of Commerce Tr. Off.Houston, Texas

Mr. S. R. Lavrder, PresidentSouth Texas Commercial National BankHouston, Texas

Mr. Harris McAshan, Vice PresidentSouth Texas Commercial National BankHouston, Texas

Mr. E. A. Craft, Executive Vice PresidentSouthern Pacific LinesHouston, Texas

Mr. George Hamman, PresidentUnion National BankHouston, Texas

Mr. L. Goldston, Vice PresidentUniversity State BankHouston, Texas

Honorable Jesse H. JonesHouston, Texas

Mr. B. C. Rooerts, PresidentWharton Bank & Trust CompanyWharton, Texas

Mr. J. E. WheatWoodville, Texas

Mr. Ed Naylor, PresidentHouston Chamber of CommerceHouston, Texas

Mr. Gus Wort ham, PresidentAmerican General Insurance CompanyHouston, Texas

Mr. J. R. Parten, PresidentWoodley Petroleum CompanyHouston, Texas

Mr. George R. BrownBrown & Root, Inc.Houston, Texas

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Mr. J. Russell Wait, Director of PortHouston Ship Channel Navigation DistrictHouston, Texas

Mr. Louis Dietz, Ex. Vice PresidentEast End State BankHouston, Texas

Mr. Wm. A. Kirkland, PresidentPort .City State BankHouston, Texas

Mr. Tom W. Gregory, Jr., PresidentFidelity Bank & Trust CompanyHouston, Texas

Mr. N. C. Hoyt, PresidentNorris Lumber CompanyFirst National Bank Bldg.Houston, Texas

Mr. W. I. Phillips, ManagerLoan AgencyReconstruction Finance CorporationHouston, Texas

Mr. Melvin KurthAndrews, Kurth, Campbell & BradleyGulf Bldg.Houston, Texas

Mr. Geo. A. Hill, PresidentHouston Oil CompanyHouston, Texas

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