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February 2S, 1 ^ 5

Chairman Bccles,
Federal Reserve Board,
Washington, D.C.

Mr. E c c l e s : -

Recently you recommended that higher
taxes be fixed on income, arising from speculation.
I thought you might be interested
in what the Financial World has to say about i t and
I , therefore, enclose i t s a r t i c l e .
Very truly yours,

E n c . 63


March 5, 194-5.


William B. Joyce,
B. Joyce & Sons,
York City.

Dear Mr. Joyce:
In reply to your l e t t e r of February.28 in
wfticn you enclose a clipping from the -financial ttorld,
I am sending you a copy of a statement I have just i s sued to explain my proposal in regard to the capital
gains tax.
Possibly 1 was at fault f o r not explaining
the matter very carefully wien I was unexpectedly
questioned on t h i s subject by members of the Senate
Banking and.Currency Committee in the course of my
testimony on an entirely different matter. At a l l
odds, the enclosure in your l e t t e r i s based on a complete misunderstanding of what I had suggested, as
you w i l l note, the special wartime tax which I proposed
would not, as this a r t i c l e states, be superimposed upon
the present tax and would not be retroactive beyond such
c u t - o f f date, say, January 1, 1945» as the Congress might
Sincerely yours,

M. S. Eccles,



These articles are protected by copyright and have been removed.
The citations for the original articles are:
Anderson, Richard J. “Market Outlook: In Face of Fears by Professional Traders That Next
Market Move Will be Downward, Administration’s Worry Is That Price Boom May Get
Out of Hand.” Financial World, February 1945, p. 11.
Financial World, “Current Trends,” February 1945, p. 12.

March 9, I9U5

Hon.Mariner S.Eccles,
0hairum,Board of Governors,
Federal Reserve System,
Washington, D.O. (25)
Dear Mr. E c c l e s i Thank you so much f o r j o u r l e t t e r of
5th i n s t . regarding Financial World a r t i c l e .
I read, with much interest,your statement,
and f e e l you are suggesting a plan t o retrard I n f l a t i o n which
possess much merit, but I do think the suggested 90$ i s rather
radical,and 50$ 0** 60$ tax would probably be more acceptable
generally. You see,Mr. Chairman, i f yAu make p r o f i t s d i f f i c u l t ,
the general economy s u f f e r s , and a successful general ecomony
i s necessary, because of the War requirement f o r a large amount
of taxes.
Then again, you are putting a penalty upon
enterprise and a premium upon those brigands who s e l l short. They
p r o f i t by adversity, which is very repugnant t o us.
Again many thanks f o r your kindness»
Very truly yours,



March 12, I9U5
Hon,Maniner S.Deeles,
Federai Reserve Board,
Washington, D. C.
Dear Mr, BeclesîYou were kind enough to reply to my
l e t t e r wherein I commented on your suggestion about
90$ taxes on securities and real estate p r o f i t s .
Here i s an a r t i c l e published by
The Fitch Survey,March 9Ì&1 tfiich mi$rt interest you.
Best wishes
Very truly yours,


March 19, 1945

Mr. « i i l i a m B. Joyce,
115 Broadway,
New York City.
Dear Mr. Joyce;
This i s t o acknowledge your l e t t e r of March 12 and the
enclosed copy of the rather t y p i c a l stock market reaction from
The Fitch Survey. The objection of the brokerage community t o a
s t i f f wartime capital gains tax or to otherwise curbing speculation i s entirely understandable. They thrive on market volume and
i n s t a b i l i t y . Their solicitude for venture capital in the postwar
strikes me as a t r i f l e nypocritical. I am particularly eager t o
see the greenlight given t o risk capital then. In wartime we have
neither the manpower nor materials, t1 do not happen t o know any
wizards, but nobody in Washington so far as I know i s proposing t o
take the p r o f i t s out of investments.
Our entire tax structure w i l l need revision looking t o
the conversion and longer postwar. I discussed that subject in an
address t o the Tax Institute some time ago and I am enclosing a
copy f o r your information.
»«hat would help new enterprise greatly, in my opinion,
would be t o give some tax benefit t o new ventures and t o eliminate
the present double taxation of equity capital. High individual
and corporate income taxes necessitated by wartime conditions,
plus double taxation of equity capital, would be far more of a
deterrent in peacetimes than even a s t i f f capital gains tax.
Indeed, there i s a good deal t o be said f o r the argument that a
capital gains tax that would deter the speculator and a revision
of the tax structure t o encourage the true investor would be t o
the real interest of getting risk capital flowing into production
and employment.
Federal Reserve Bank of St. Louis

Sincerely yours,

M. S. Eccles,

These articles are protected by copyright and have been removed.
The citations for the original articles are:
Fitch Survey, “Stocks and Markets: Rocking the Boat!,” March 9, 1945, p. 1.
Fitch Survey, “Brilliant Future for Stainless Steel: Rustless Iron & Steel Corp. Produces About
One-Third of Country’s Total Output,” March 9, 1945, p. 2.





March 27,19^5

Hon. Marriner S.Eccles
Chairman,Federal Reserve System
Washington, 25, D .0.
Dear Mr. BcclesJThank you f o r your l e t t e r of March 19th.
I f e e l that proposed 90$ taxation on p r o f i t s
held f o r l e s s than two years i s too much.

on stocks

We must not do anything that w i l l harm recovery,and t o
place such taxation w i l l c h i l l not only those who are inclined to buy and s e l l
stocks, but also those who plan to go into business of any sort. I f e a r people
generally w i l l believe that excessive taxation might be l a t e r fixed upon other
The Government needs taxes t o pay war expenses and service
i t s gigantic debt, but i f the "Government doesn't permit c i t i z e n s t o make money, ^
there w i l l be no p r o f i t s and, consequently, no taxes.
Then again, whatever
taxation i s fixed upon p r o f i t s , made by purchasers of securities, should also
attach to those i n our midst known as 11 short s e l l e r s " . The "short s e l l e r " i s
destructive while the purchaser i s constructive.
We are not speculators, but are investors and we own a
large number of securities and never go into debt without having s u f f i c i e n t cash
on hand to pay the debt, therefore, we view with alarm your proposal, and hope
you w i l l give i t reconsideration t o the extent that i t w i l l result i n a modification of your proposal.
I agree there should be some restraint, not only i n the
financial world, but there must be restraint inthe labor world.
I have a boy in the Army and his mother and I are suffering
because of his absence. He,however,is not in combat,but I view with great alarm
the conduct of that element in the labor world that strike f o r more money when
they are now getting $10. to $15. per day, while those in combat forces who are
fighting in the ¿jungles and other bad terrains , giving t h e i r bodies and t h e i r
l i v e s t o protect the strikers, are getting only around $50. per month to be shot

Mr. Bccles,this i s serious business, and i f i t

not be

Hon. Marriner

S.Bccles - 2

corrected by the Administration, when our boys get back theynwill take a
hand in this labor situation and correct i t , because they are pretty
well exercised about what i s going onf i n the labor world.
Please do not misinterpret
percentage of labor that acts in this bad
considerable and s u f f i c i e n t to cause great
a f t e r the war we want as l i t t l e resentment

my l e t t e r . It i s only a small
way, but the percentage i s
resentment against labor, and
as possible.

Respectfully submitted,




April 2nd,19^5

Hon. Marriner S. Eccles,
Chairman,Federal Reserve System,
Washington, , D. C.
Dear Mr. Chairman:When I wrote you the other day I did not dwell
enough upon the e f f e c t of your plan of high taxation on p r o f i t s
and/or high margins.
I t seems t o me this would be playing right into
the hands of the short s e l l e r s and would " c h i l l " the optimism of
business men. We must have optimism in t h i s country i f we are going t o
earn enough money t o pay adequate taxes to service our debt.
Respectfully submitted,