Peacemaker's Reward

When the U.S. Treasury and the Federal Reserve Board patched up their long feud a fortnight ago, the peacemaker was Assistant Secretary of the Treasury Wiliam McChesney Martin Jr., 44, onetime Joy wonder of Wall Street and the Fair Deal. Because both Treasury Secretary ohn W. Snyder and Federal Reserve Chairman Thomas B. McCabe had taken such well-entrenched positions that neither could beat a graceful retreat, Snyder had asked Martin to help work out a compromise.

The solution which Banker Martin persuaded Snyder to accept was a victory for the FRB, since it established higher interest rates and a flexible policy in "pegging" the prices of Government bonds (TIME, March 19). With those points won, Tom McCabe decided that now was a good time to get back to running his Scott Paper Co. in Chester, Pa. He resigned. President Truman last week named apple-cheeked Bill Martin (subject to Senate confirmation) to the $16,000-a-year job.

Would the appointment of a Treasury man cost FRB its victory and make it a captive of the Treasury? Those who had fought Snyder's cheap-money policy did not think so. From his childhood, Bill Martin has been steeped in the tradition of FRB independence. His 76-year-old father, now a St. Louis lawyer, had helped Carter Glass write the Federal Reserve Act of 1913, had long served as president of St. Louis' Federal Reserve Bank. "Bill Martin," said one of his friends, "was literally raised in the Federal Reserve System."

It was the second time Bill Martin had moved in to cut a knot too tangled for older fingers to unravel. In 1937, when William O. Douglas, then SEChairman, was denouncing the New York Stock Exchange as a "private club" with little concern for the public interest, the exchange's governors turned to Martin, an exchange member, to help set things right. Martin helped draft the plan which completely reorganized the exchange in 1938, and became, at 31, the exchange's first paid president. In 1941 he entered the Army as a private, rose to colonel. After the war, President Truman appointed him to run the Export-Import Bank, from which he moved to the Treasury two years ago. Nobody thought that the appointment of Martin would permanently settle the dispute over the national fiscal policy. But FRB members felt that Martin could be counted on to back their fight for a sounder money policy.

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