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UNIVERSITY OF W ASHINGTON
COLLEGE OF ECONOMICS AND BUSINESS
SEA TTLE

July 22, 191+1

Honorable Marriner Eccles
Chairman, Board of Governors
Federal Reserve System
Washington, D. C.
Dear Mr. Eccles:
A few days ago I suggested to Professor Blakey of the Univer­
sity of Minnesota, -who is chairaan of the program committee of the
National Tax Association, that he invite you to address that outfit at
its annual convention in St. Paul on the subject of defense financing.
I truly hope that you can see your way clear to do this. The Associa­
tion will hold its convention October 13 to 16. I am not sure as to
the exact time Blakey will ask you to speak but I am quite sure that
if one day is not convenient he would be happy to rearrange the pro­
gram to suit your needs.
In order that you may be in a position to appraise this
invitation let me say a few words about the National Tax Association.
It is a professional group composed of state and local tax officials,
tax attorneys, college professors, and students of taxation. It has
been running for over thirty years and has one of the most successful
conventions in the country. Meetings range from six hundred to a
thousand people. It provides the best forum for the discussion of
tax problems anywhere in the country and enables one to reach the key
financial officers of most of the states.
I think this latter point is particularly important because
too little consideration has been given in the past by Federal offi­
cers to the effects of state and local finances. At no time during the
period from 1933 to date has a conference of state and local officers
with Federal officials been held. The result is quite clear. State
and local officers during the depression balanced their budgets, and if
you will look at the figures for public construction you will see that
all the Federal spending during the period from 1933*38 did little more
than offset the shrinkage in the state, local sphere. It is true, of
course, that many of the states could not with safety unbalance their
budgets, but certainly the extent of the liquidation which took place
here could have been minimized. Similarly, in the defense period
competition between the states and the Federal government can be re­
duced, and I am sure that many of the states will be glad to do what
they oan to implement or at least keep out of the way of the Federal
program.
What you have been saying about defense finances is just what
these tax officials and others ought to hear. I know it is asking a




Marriner Ecoles

-2 -

July 22, I9I4I

lo t o f you to go out to St. Paul to say i t , but t h is w i l l provide a
new case and a new focus f o r the d iscu ssio n , and the problem w i l l be
quite as important in October as i t is now in view o f the way the Ways
and Means Committee seems to be shaping the present tax b i l l *
I can think o f a l o t more arguments on the p o in t, but i f I
w rite too much I know you w i l l not have time to read th is l e t t e r and
i t is alread y too long.
I can only add th at I would not have made th is
suggestion o r t r ie d to get you into th is had I not thought that from
your own point o f view , th at o f the Federal Reserve System, and the
country as a whole i t was important.
With h ighest esteem and personal regard, I am
Yours sin c e re ly «

Süneon E. Leland
SEL/ml







July 29, 1941.

Dr. Simeon E. Leland,
College of Economics and Business,
University of iNashington,
Seattle, Washington.
Dear Dr. Leland:
This is to thank you for your letter of July 22
with regard to the convention of the National Tax Association
to be held in St. Paul from October 13 to 1 6 .
Dr. Blakey, who, as you know,, is Chairman of the
Program Committee, .wrote me on July 18 inviting me to address
the session on October 14 which is to be held at the University
of Minnesota and is to be devoted to a discussion of national
defense financing. I replied to him that if it would not in­
convenience him in any way, I would accept tentatively subject
to confirmation a little later on when I can be more certain
than 1 am now of being able to attend. John Peyton also wrote
me about the meeting and I advised him similarly.
Your thoughtful and informative letter predisposes .
me still further to be present if I can possibly arrange it.
I recognize the importance of this meeting and the fact that
it brings together a representative group who should be in­
fluential in the various states in helping to form policies
that are economically sound and integrated with Government
policy and action. I appreciate your interest and courtesy
in giving me the benefit of your views as well a& your perti­
nent observations on the importance of coordinating State and
Federal policy.
with kindest personal regards,
Sincerely yours,

M. S. Eccles,
Chairman.

ST:b

UNIVERSITY OF W ASHINGTON
COLLEGE OF ECONOMICS AND BUSINESS
SEA TTLE

August 6, 19ijl

Mr. M. S. E ccles, Chairman
Board o f Governors
Federal Reserve System
Washington, D. C.
Dear Mr. E c c le s :
I am c e r ta in ly g r a t i f i e d to le a rn th at there is a
chance that you w i l l address the meeting o f the N ational Tax
A sso ciatio n in S t. Paul in October.
I do hope that nothing
w i l l c o n flic t w ith your a b i l i t y to do t h is .
I r e a ll y b e lie v e that i t i s important to get the
c h ie f f i s c a l o f f i c e r s o f the states informed as to sound
economic and f i s c a l p o lic ie s and knowing what your views are
as to these I think you are ju s t the person to do i t .
If
you can come we s h a ll make every e f f o r t to make th is an out­
standing a f f a i r and to provide as la rg e an audience by radio
and otherwise as is p o s s ib le fo r the occasion.
I am going
to w rite both Blakey and Peyton about t h i s .
B elieve me, I
g r e a t ly appreciate your l e t t e r o f the 29th .
With kindest personal re gard s, I am
S in cerely yours,

SEL/ml




September 9* 19U1*

Dr* Simeon E. Leland,
Professor of Boonomics,
University of Chicago,
Chicago, Illinois*
Dear Dr. Leland:
Just before leaving for Utah on a belated vaca­
tion, the Chairman asked me if I would write you a line to
impose upon your good nature sufficiently to induce you to
outline what you thought would be appropriate for the ad­
dress he has agreed to make at the national Tax Association
Convention on October lU.
This is something of a task, I know, but he felt
you could just note down topically some of the major points
that you feel should be dealt with and perhaps amplify it a
little with your own viewpoint* He will have to begin very
shortly preparation of this address, and I need not tell
you he would greatly appreciate any suggestions that you
can make*

Sincerely yours.

Blliott Thurston,
Special Assistant
to the Chairman.

ET:b







Ube Xttniversitç of Cbicago
Department of Economics

Air Mail
September 12, 1941

Mr. Elliott i'hurston
Special Assistant to the Chairman
Board of Governors
Federal Reserve System
Washington, D. C.
Dear Mr. Thurstons
Your letter of September 9th
has been received in Professor Leland's
absence. He is at this time in California
and on the chance that I could reach him I
made a copy of your letter and forwarded it
to him at the following address: c/o V. H.
Matthews, P.O. Box 593, R.F.D. No. 3, San
Jose, California. He is driving back to
Chicago and expects to arrive here about
September 20th.
Sincerely yours,

M. Finnamore
Secretary
MFsFB

T E L E G R A M

Board of Governors

of the

federal Reserve System
L e a s e d W irt.

Received a t W

J.;i

n » « , 0 . C,

W93WASH G223 CGO 1 8 - 1 2 3 9
ECCLES

LETTER OF SEPTEMBER NINTH RECEIVED T H IS MORNING AFTER SEVERAL
FORWARDINGS. W ILL PREPARE OUTLINE W IT H IN NEXT FEW DAYS OR SOONER
IF P O S S IB LE . REGARDS




LELAND.

^

jo/,1 SEP 18 PM 12 48
l""1

Zhc {University of Cbicago
Department ofEconomice
September 25, 1941

Hr* Marriner S. Eccles
Chairman, Board of Governors of the Federal Reserve System
Washington, D. C.
Dear Mr* Eccles:
I am enclosing herewith some suggestions for your St* Paul address. I
trust that they are in time to be of some service to you in connection
with its preparation.
In making the outline, I have attempted to keep it as brief as possible
and to refer as frequently as I could to your own writings.
You will
see throughout numerous references to them.
This was quite easy be­
cause your own views and mine coincide so much that citation was an easy
matter. In my own writings, I have frequently referred, too, to what
you have said.
Perhaps it may strike you that I have not indicated much that is strict­
ly new.
At the moment I find it quite difficult to say anything new
about the fundamental philosophy of financing the defense program.
There are some matters of detail that are continually changing, but these
seem to fit within the general framework. If I have not made my notions
clear, I will be glad to expand them as far as I can.
One point in the memorandum may be worth emphasizing here. It has to do
with the use of excise taxes.
It seems to me that too many of these
present excises were devised with a view to raising revenue, whereas they
should be used primarily to help control consumption and to make more ef­
fective the system of priorities and even price controls. Of oourse
this does not apply to some of the well-known excises, such as liquor,
tobacco and gasoline, which are substantial revenue producers.
They
have been adjuncts of the Federal revenue system for years and should be
excepted. Many other commodities singled out for taxation will not pro­
duce much revenue, will only irritate the citizens and will contribute
nothing to consumption control.
The list of excises should be purged.
Negligible revenue producers should be dropped unless they supplement
the price-priority mechanism. Others should be added with this in view.
As certain commodities become scarce profit possibilities fraa trade in
them increases.
Such aleatory gains should be heavily penalized, per­
haps through excess profits taxes specially devised to recapture such
profits, or by the use of trading licenses or special ineome taxes with
similar objective.
These tools would help make effective the pricepriority controls.
This use of the taxing power becomes more important

1891

• THE




UNIVERSITY

OF

CHICAGO

• FIFTIETH

ANNIVERSARY

• 1941

Mr* Marriner S. Ecoles, September 25, 1941

Page 2*

as certain cosmiodities become scarce and as the priority system af­
fects an increasing number of goods*
I hope that say comments are not too long or too laborious or too late*
It was really a pleasure to do this«
I am glad you have given me an
opportunity to be of some service»
Sincerely,

SEL-W
Enel*







October 3, 1941*

Mr. Simeon E. Leland,
Department of Economics,
The University of Chicago,
Chicago, Illinois.
Dear Mr. Leland:
I have your letter of September 25, and
I am very grateful to you for taking so much time and
trouble to give me the outline for my St. Paul address.
You have very comprehensively sketched in
the whole picture in a most orderly sequence. It will
be a real help to me, and I can only say that I did not
mean to impose such a task upon you, but I deeply
appreciate your help.
Sincerely yours,

M. S. Sccles,
Chairman.

ET cm




Ube \Hniversity of Chicago
Department ot Economics

September 25, 1941

Mr. Marriner S. Eccles
Chairman
Board of Governors of the Federal Reserve System
Washington, D. C.
Dear Mr* Eccles:
Under separate cover, I am sending you a couple
of things I have written on defense financing
in the hope that they may "be of interest to
you.
Sincerely,

SEL-W

Simeon E. Leland

September ¿7, 1941»

Dear Dr. Leland:
On behalf of the Chairman, I want to
thank you for sending your articles, which ar­
rived under separate cover and will, I know, be
most useful to him in connection with the speech
which he is preparing.
Sincerely yours,

(Signed) Elliott ^hurston
Dr. Simeon E. Leland,
Department of Economics,
The University of Chicago,
Chicago, Illinois.

ET:b