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116 Mitchell Street, S. W.
M A I N 4733

Atlanta, Ga.

June 15,1945

Mr. Mariner S*Eccles,
Chairman Governing" Board
Federal Reserve System,
Washington, D.C.
Dear Mr.Eccles:
Your letter of June 4th., to hand,and contents carefully
noted. I have also read the proposed bill on increase on
Capital Gaines Tax, that you submitted to the Senate
Banking Currency Committee, to go in to effect as of Jan.
1st., 1945- in which you propose a 90% rate on capital
gaines derivedi from the sale of real estate and stocks.
I think you are perfectly right, in proposing this kind
of bill, but no doubt the Senate would be more inclined
to consider same, if you would cut the tax to 75$.
As you state, the GI bill of rights, will not be worth
anything to our returning soldiers, if he has to buy
farm lands at an advance of one or two hundred per cent,
or small homes and businesses on the same basis. The
Government will be wasting its money, and the recipient
of same will be wasting his time, and a short time will
be bankrupt.
A few weeks ago x made a trip from North Carolina, San
Antonia Texas, hitting all the larger cities in the entire South; I visited during my spare time brokerage
houses, and talked to their managers and customers* the
seat® for customers in all these brokerage houses were
filled, and they were all being encouraged to buy stocks.
The advise being based,as you say, on the tremendous
amount of liquid funds in the country. 'Bhe customers
were small merchants, many of which, had made quite some
money in the last few years(many the first time-jfarmers,
and many women and others . I did not see many tried conservative business men there, men who had gone through
the deflation after the First "orld^ar, and the stock
gamble of 1928 and 1929.
You tell me that the power of the federal Reserve bank

1 1 6 Mitchell Sfreet, S. W.
M A I N 4733

Atlanta, Ga.

is limited, and you could not raise interest rates, owing
to the fact of our tremendous nation debt, which is already
close to $250,000,000, 000*00, and will nodoubt go to
$350,000,000,000*00, so what can be done?
For a number of years, I have bought and sold personally a
lot of securities, and I have also been financial adviser
for some very wealthy people, of this part of the country.
I did business with anumber of the largest brokers in this con
country;;at one time I had my offices at 42 Broadway, at
J.S. Bache & Co., though I was born in the state of Georgia,
and went to school with the sons of Senator George; I therfore
have had quite a lot of experience with the caliber of people
who k^eeshearing the backs of the lambs, as I, in my younger
days, had my back among the lambs.
The first suggestion that I hav§, is to have the SEC to stop
periodicals, and tipster sheets from Boston and iMew York,from
from being mailed out- suggesting the purchase of this and
that stock. Then I would have the Telephone Co. stop taking
all these long distance calls from Toronto Canada, suggesting
that people purchase gold stocks, in the wild gamble that has
been going on, on the Toronto Stock Exchange.
Next I would call in the heads of the Brokerage houses in
New York,and give them a staight warning from the shoulder,
I would show the stocks like Sears Roebuck & Co., rushed up
$20.00 odd dollars, in a short time, with their earnings up
3icents per share in 1 9 4 4 , 1 9 4 3 , and the stock advances
to the tune o f H u n d r e d twenty odd million dollars in a
short time*
If this did not work I would again go before the Senate Banking
and Currency Committee.
finder no conditionwould I put myself and the governing Board
of the Federal Reserve Bank in the position that Mr* Strong
found himself, after the last world war.
I have written to Senator George in regard to this, but to
date have not heard from him.
If I can be of any assistance to you, call on me.


David P. Wachtel


June 19, 1945•

Mr. David F. Wachtel,
Dixie Dress Manufacturing Company,
116 Mitchell Street, S. W.,
Atlanta, Georgia.
Dear Mr. Vvachtel:
This is to thank you for your letter of June 15»
Let me say that while I mentioned a 90 per cent capital
gains tax for wartime as an effective inflation control
device, I have not submitted any bill. If one is to be
considered, it will have to originate, under the Constitution, with the Ways and Means Committee of the House.
There has been some talk of an alternative, which I think
would also be effective; that is, to extend the present
holding period from six months to say three years.
I feel as you do that the tipster sheets
whetting the speculative appetite and fever are an evil.
How to stop them by Government action without being accused of interference with freedom of speech and press
is another matter.
I appreciate having your comments.
Sincerely yours,

M. £ . Iccles,