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c 0p i. Y Sgt. K. L. Block, 37292008 Base Weather Station A.P.O. 605 Miami, Florida West Africa September 1, 19U3 Mr* W. C. Coffey, President University of Minnesota Minneapolis, Minnesota Dear President Coffey: Your letter of July 21st reached me in good time, and I was certainly pleased to hear from you again. Since I wrote you last I learned that your term of office had been extended another year. May I offer you my congratulations and thank you for the service that you are rendering to the University and to the people by consenting to guide the University through this most difficult period* Your comments regarding inflation were especially appreciated* 1 have nothing but the greatest admiration for anyone chosen for as important a post as a director of a Federal Reserve Bank* 1 am especially pleased that you, as well as many of our professors, have abolished the myth of the "ivory tower.** Never before has the need been so great for men of vision and ideals to exert a guiding force in building our economy* flight now the monetary and price situation is probably the greatest problem facing us* Victory is Inevitable, but dark clouds of inflation still loom ominously on the horizon of peace. Ralph Robey points out in a recent issue of "Newsweek15 that the excess purchasing power which we are piling up during the war will continue to affect our economic structure after the war* He disproves the theory that this excess will be drained off in the purchase of consumption goods after the war, since every dollar of production means another dollar of buying power in and of itself* You well know the results of inflation. But this time there will be even greater cause for discontent and unrest. This time we will have some ten million men and women from the military services who will form a formidable group if their plans are shattered by inflation. You might be surprised at the number of men itfio are making pians already for their return to civilian life. Publicly they may not say much about it, but I have talked to innumerable men who are saving all of the money they possibly can for the time that they get back. Some - 2 - are married or plan to be married and they are putting money into a house, a farm, or furniture. But this is rare* The majority are saving their money - counting it carefully - and dreaming of the comforts that it is going to buy* But the point is that they are dreaming of these things in terms of pre-war prices* We in the Army are not vitally affected by prices. Those of us in foreign service chalk up differences against the country in which we happen to do our small amount of buying* Those of us in the States buy little anyway* Certainly we read about the price of furniture advancing IOG7S or some other price index going up 5Q^. But it doesn*t strike home the way it would if we looked at a radio that we almost bought before the war for twenty-five dollars and now find that we have to pay fifty dollars for it. After the war that is the experience that each and &V9ry one of us in the Array is going to have* We have saved our money — denied ourselves many pleasures, and we are dreaming of a down payment on a house, new clothes, marriage, etc. But our air castles will fall with a very discomforting thud when we find that we can buy only half, or a third, or some smaller fraction of the commodities we had planned. That is when the protesting murmurs of ten million hearts will swell to a crashing crescendo of condemnation against our government. The results may well be catastrophic* That is the possibility; but none of us over here believe that it will actually occur* We have confidence that men of knowledge and judgment who are in positions of influence, such as you occupy in the Federal Heserve System, will solve this problem for us* Our confidence is unlimited1 you cannot afford to fail* I shall feel honored to hear from you at any time. My best wishes go to you for your continued health and success* Sincerely yours, (Signed) Ken. Kenneth L. Block Sergeant, A. C* UNIVERSITY OP MINNESOTA MIHNEAPOLIS Hi September 16, 1943 Office of the President Mr. Marriner S, Ecoles Chairman, Board of Governors Federal Reserve System Washington, D. C. Dear Marrinerj I am attaching a copy of a letter I received recently from one of our students in the armed services. Since reference is made to the Federal Reserve and certain interesting observations were made, I thought you might be interested in seeing it. Sincerely yours, (Signed) W. C. Coffey. W. C. Coffey President Enclosure p T October 13, Mr. W. C. Coffey. President, University of Minnesota, Minneapolis Ik, Minnesota. My dear "Dean"; Your letter of September 16 enclosing the one from Sergeant Block came toraydesk while I was on a visit in the West. I was interested in reading the Sergeant's comments, but I feel disturbed, as you must be, that he seems to feel that you and 1 and others in the Reserve System have the power to prevent inflationary developments. Certainly the Reserve System alone is powerless, and the small voice we have now or may have later in the shaping of Government economic policy scarcely justifies the Sergeant's confidence that we can "solve this problem1*. I trust that if you have occasion to write to hi® you can make clear that the problem cannot be solved by any one agency of Government or, for that matter, by a whole administration, unless the Congress is enlightened enough and willing to vote the necessary powers and support the kind of Government policy that will be effective, particularly in the post-war period, in maintaining reasonable economic stability. His letter reflects a deep feeling that I have no doubt is latent in the hearts and minds of millions of others in the services. I think he expresses it well. Possibly his concluding paragraphs are meant only to be complimentary, but they do suggest that you and others of us in the System occupy positions of far greater influence than is actually the case Insofar as meeting the inflation problem Is concerned. As thoughtful a man as he evidently is ought to be set right in case he thinks you and the rest of us in the System are as omnipotent as his well-meant words imply. Sincerely yours, (Signed) U. S. Eccles. October 28, 19U3- Bear Randolph: I am enclosing copies of a letter received from Dean Coffey and the letter regarding inflation •whioh he had received from a young nan in service overseas, together with my reply. fhi3 is the correspondence I mentioned to you today. You will note that 1 have marked that portion of the letter from Sergeant Block which I feel is most pertinent. Sincerely yours, Mr. Randolph E. Paul, General Counsel, Treasury Department, Washington 23, D. C. Enclosures 3 (IDENTICAL LETTER SENT TO MR. VINSON) MSE:VE:b
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