82d JOINT COMMITTEE PRINT 2d Session MONETARY POLICY AND THE MANAGE- MENT OF THE PUBLIC DEBT THEIR ROLE IN ACHIEVING PRICE REPLIES TO QUESTIONS AND OTHER MATERIAL FOR PART 1 JOINT COMMITTEE ON THE ECONOMIC REPORT Printed for the use of the Joint Committee on the Economic Report HG 181 .A422 1952 V. 1 JOINT COMMITTEE ON THE ECONOMIC REPORT SENATE JOSEPH C. O'MAHONEY, Wyoming, Chair- EDWARD J. HART, New Jersey, Vice man JOHN SPARKMAN, Alabama PAUL H. DOUGLAS, Illinois WILLIAM BENTON, Connecticut ROBERT A. TAFT, Ohio RALPH E. FLANDERS, Vermont ARTHUR V. WATKINS, Utah Chairman WRIGHT PATMAN, Texas RICHARD BOLLING, Missouri CLINTON D. MCKINNON, California JESSE P. WOLCOTT, Michigan CHRISTIAN A. HERTER, Massachusetts J. CALEB BOGGS, Delaware Pur. 7-11-52 79265 LETTER OF TRANSMITTAL FEBRUARY 20, 1952. Hon. JOSEPH C. O'MAHONEY, Chairman, Joint Committee on the Economic Report, United States Senate, Washington, D. C. DEAR SENATOR O'MAHONEY: There is transmitted herewith a staff document in two volumes, entitled Monetary Policy and the Management of the Public Debt; Their Role in Achieving Price Stability and High-Level Employment, containing the replies of Government officials, bankers, economists and others to the questions asked of them by the Subcommittee and included in the pamphlet Questions on General Credit Control and Debt Management, released last October. The document also contains certain other material submitted to the Subcommittee and judged by the staff to be useful in rounding out that included in the answers. The publication of this material before the opening of public hearings will be helpful in a number of ways. First, it will make available to the Committee in usable form a large amount of information on these subjects; second, it will point up the issues of the inquiry and stimulate intelligent public discussion; third, it will permit all witnesses before the Subcommittee to study the points of view of others in the course of preparing their own statements; and, fourth, it will permit those witnesses who have already submitted answers to written questions to greatly shorten their testimony. The materials presented here do not necessarily represent the views of the Subcommittee, of its individual members, or of its staff. Sincerely, WRIGHT PATMAN, Chairman, Subcommittee on General Credit Control and Debt Management. III CONTENTS Chapter I. Reply by the Secretary of the Treasury- A. Congressional Policy Directives... Question 1. Directives bearing upon economic objectives. 2. Economic policy of Treasury. 3. Emphasis of Employment Act on high-level em- 4. Need for additional economic policy directives__ B. Policy Formulation in the Executive Branch_ Question 5. Powers over operations of Federal lending agencies 8. Powers over operations of Federal Reserve System. 10. Possibility of continuing conflict in policies.. C. Expenses for the Purpose of Influencing Public Opinion Question 11. Expenses to influence public opinion on controversial D. Credit and Debt Management Policy. 13. Functions with respect to incoming gold and silver- 43 16. Development of legislative authority on public debt 17. Issues involved in policy discussions with Federal Reserve between end of war and "accord". 18. Description of Treasury-Federal Reserve accord.. 19. Differences concerning fundamental economic ob- jectives between Treasury and Federal Reserve__ 20. Differences concerning procedures and techniques between Treasury and Federal Reserve_-_ 21. Cooperation with Federal Reserve in matters of 22. Role of general credit policy in counteracting infla- |