Louis D. Brandeis to Woodrow Wilson
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Boston, Mass
.June 14, 1913.
B/P
As requested at our conference on the 11th I am writing you the substance of the opinion expressed by me on the proposed currency legislation.First: It is, of course, desirable to enact at an early date a currency bill, if an adequate, confidence-inspiring bill can be passed. But full and free discussion of any proposed measure is essential both to safety and to public confidence in its wisdom. Up to this time there has been little discussion of the currency question except that organized by the bankers.Second: The power to issue currency should be vested exclusively in Government officials, even when the currency is issued against commercial paper. The American people will not be content to have the discretion necessarily involved vested in a Board composed wholly or in part of bankers; for their judgment may be biased by private interest or affiliation. The function of the bankers should be limited strictly to that of an advisory council. Merely placing in the Government the ultimate supervision and control over the currency issues would not afford the public adequate protection.Third: It was suggested that a bill, providing for local boards of nine members, of whom six would be bankers, could be passed now, because of the public opinion which the bankers have been making within the past two years; that it would be desirable to so pass such a bill in order to prevent panic conditions, and that later, when the public should have become educated not to heed the cry against the Government entering the banking business, the law might be modified so as to transfer the power over the currency issue to Government officials. But a bill vesting the immediate currency-issuing power in the bankers is almost certain to meet with serious opposition, and there is little probability of securing the passage of such a bill in time to prevent any early financial disturbance, or to quickly allay it.Fourth: The effect which the enactment of an improved currency law would have in preventing or allaying financial disturbances has, I believe, been greatly exaggerated. The beneficent effect of the best conceivable currency bill will be relatively slight, unless we are able to curb the money trust, and to remove the uneasiness among business men due to its power. Nothing would go as far in establishing confidence among busness men as the assurance that the Government will control the currency issues and the conviction that whatever money is available, will be available for business generally, and not be subject to the control of a favored few. Any currency bill which is enacted, should embody provisions framed so that the people may have some assurance that the change will enure to their benefit.Fifth: It is a serious queston whether, in case we should pass a currency bill satisfactory to the banking interests, and which contains no provisions limiting the power of the money trust, the probability of enacting later legislation to curb the money trusts would not be greatly lessened.Sixth: The conflict between the policies of the Administration and the desires of the financiers and of big business, is an irreconcilable one. Concessions to the big business interests must in the end prove futile. The administration can at best have only their seeming or temporary cooperation. In essentials they must be hostile. While we must give the most careful consideration to their recommendations and avail ourselves of their expert knowledge, it is extremely dangerous to follow their advice even in a field technically their own.
Very cordially yours,(Signed)Louis D. Brandeis.
Hon. Woodrow WilsonWhite House,
Washington, DC
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