On October 6th I issued a statement that I should recommend to the Congress
an extension during emergencies of the eligibility provisions in the
Federal reserve act. This statement was approved by a representative
gathering of the Members of both Houses of the Congress, including members
of the appropriate committees. It was approved by the officials of the
Treasury Department, and I understand such an extension has been approved
by a majority of the governors of the Federal reserve banks. Nothing should
be done which would lower the safeguards of the system.
The establishment of the mortgage-discount banks herein referred to will
also contribute to further reserve strength in the banks without
inflation.