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/y- 3 3 ^U) ^Vbw/c^X ( L ^ j i 9 fas tic? - ¿ ^ u // ^ h ^ L , ¿ ^ ; / 9 _ j J U r c n J L f i ï April 2U, 1945 Mr. John B. Kennedy, 1433 No. Normandy Avenue, Los Angeles, California. Dear Mr. Kennedy: It is unfortunate that I did not have the advantage of your Courteous and thoughtful letter of April 19 Before suggesting the capital gains tax as an anti-inflation device. It had not occurred to me, until I received your letter, that the tax would "fleece" the iñvestor of 90 per cent of his gains, since my proposal was that if one who purchased after January 1, as I deduce you did, were not looking for a quick speculative profit but was thinking in terms of income and longer range appreciation, the tax would be progressively lower until eventually it equalled the existing capital gains tax of 25 per cent maximum. Similarly, it had not occurred to me that I was jeopardizing my own personal interests by precipitating communism. As a business man and banker with rather extensive interests in the maintenance of our system, I had supposed until I read your letter that this proposal would in a small way help to protect that system. Doubtless you have considered all the pros and cons of this rather complicated subject before arriving at the judicial conclusions in your letter. Some other people, less interested perhaps in protecting this Nation than you are, seem to have a contrary view from yours, as exemplified in a letter — one of a good many I have received — copy of which I enclose. This particular one, you will note, is from a service man. Very truly yours, M. S. Eccles, Chairman. Enclosure ET:b B O A R D OF DF GOVERNORS THE FEDERAL RESERVE SYSTEM WASHINGTON OFFICIAL B U S I N E S S • \oi)A R. Kennedy I 4 3 AP» Noraandy Avenue I.3 Los Migeles JWMjFiKjmwm I RETURN JJnknown I . TO WRITER ; I U N C L A I M Ë D «re rir wens California c? M Y I A J 9 ;M P ^ 1945 OA \ B O A R D OF OF GOVERNORS THE FEDERAL RESERVE SYSTEM WASHINGTO N 2 5 OFFICE OF THE CHAIRMAN April 2U, Mr, John K. Kennedy, 1U35 No» Normandy Avenue, Los Angeles, California. Dear Mr. Kennedy: It is unfortunate that I did not have the advantage of your courteous and thoughtful letter of April 19 before suggesting the capital gains tax as an anti-inflation device. It had not occurred to me, until I received your letter, that the tax would "fleece" the investor of 90 per cent of his gains, since my proposal was that if one who purchased after January 1, as I deduce you did, were not looking for a quick speculative profit but was thinking in terms of income and longer range appreciation, the tax would be progressively lower until eventually it equalled the existing capital gains tax of 25 per cent maximum. Similarly, it had not occurred to me that I was jeopardizing my own personal interests by precipitating communism. As a business man and banker with rather extensive interests in the maintenance of our system, I had supposed until I read your letter that this proposal would in a small way help to protect that system. Doubtless you have considered all the pros and cons of this rather complicated subject before arriving at the judicial conclusions in your letter. Some other people, less interested perhaps in protecting this Nation than you are, seem to have a contrary view from yours, as exemplified in a letter — one of a good many I have received — copy of which I enclose. This particular one, you will note, is from a service man. M. S. Eccles, Chai m a n . Enclosure
