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May 5, 1939

Honorable Marriner S. Eccles
Chairman of the Board
Federal Reserve System
Washington, D. C.

Dear Marriner:

I attach hereto Wall Street Journal of today.
I hope you will have time to read the editorial marked.
I believe too you will be interested in reading the marked article commenting upon Under Secretary of
the Treasury John W. Hanes1 speech, which also touches upon
the subject of "Venture Capital".
There is also an article in the New York Times
this morning which I enclose.

Sincerely yours,

Stewart McDonald

The following articles are protected by copyright and have been removed.
The citations for the original articles are:
Wall Street Journal, “Review and Outlook: Restricting Venture Capital,” May 5, 1939.
Cooper, Lee. “Rental-Housing Program at a Standstill Due to Uncertainty Over FHA
Amendments.” New York Times, May 5, 1939.
Wall Street Journal, “Expansion in Profits Essential to Full Recovery, Says Hanes: Tells Indiana
Bankers Removal of Obstacles Blocking Employment of Capital Would Help,” May 5,


Lay 9, 1939.

Dear Stewart:
This is to acknowledge receipt of
your letLer of inlay 5 ^rid. the enclosures from
the hall btreet Journal bad hew YortC Times.
"¥ou will, oi" course, nave to deal
v»ith that amendment in conference, uiid it
beems to me that the case is so strong against
it that you ou^ht to be able to knock it out.
bincerely yours,

M. 5. Secies,

Honorable btewart McDonald, Administratorf
Federal Housing ^dminibtration,
Washington1 D. C.



mast of you ioaoir, the F&

fe lie I

.-our-gee latjgt Malt r.:*:t~.l housing

\0% --"bout tfct iMk i f prosperity today.

r- t*.


lowest i M d in history, aoaey s.pp&r&ntiy i s a

drug on the market•

l a l iUAd i t U tpM UMft small has® building under

the FHA h*^ ttfVMMti to tli« 1929 l e v a l , yet 14-irg© dpuxtstent I M M building,
which ie s- vitftl part ••

And s t l



aormai construction program, hat» lagged fur
- crying nee;;

ae« r«ntsd ^unrterfi teciiuse

f of our people Kill il«api hi renters- for on« MMM0
The Rtt ha& ciavaloped in ^


.^t f&ft |»ars >..a entirely a©« typa of

-tneat house, streamlined to f i t the ttettfc

Th^ WtL%* H eadlier I M

the f«fo±li*s ar^ j&jsall^r, und the ae» design HiMiiij embodies ti»o or threestory walk-ups*

fhe outst^rtdifig feature, ho»ev»rt i* thts NMtU l o t

Projects built with F A iMMMMit IMPI -:i. 9$ i&rc®nt lo% MMplgi ^
70 0 80 percent for th# old type*
, gardening, etc*

fh±& gives $itie &co,je for pl^ygrouads,

In the rent-. I

-jects •..Ii^iidy laiilt under


" *fcMfc IhiWi !*<• some one iMHlNi Ml f i f t y

throughout toe country, i t t l notable th< t r . a i l :

th «B&11 child

them out i a order to m M autoiaobile h»?uurd£ aaa 9th«r dfttig^rs In
populated p( M I
lM N«
To build these large developments tmUU ftr •veature11 capital.
gre.'-'teet problem h&& been to tllilMl reaponsible venture Hpiti
»&ae time ftt pat IW
government1 e r i ^ k .

t the

I into • ilMlV>|a^BM in ord^r to isiaisi^e the
To do HdJ,

big problem, tuad yet I


t i l l give ,\ u-pur to the Wilder, ha« we maw itOi i t .

1* a l l i^gree, X tfaimc, taml venture c a p i t a l need** «rncour«§HMat to take

The other &uy Egbert If* Eajaae, F i r s t Vic$ President of tbm Awwric&a

B&nkers A&soci&tion, g**id th *t recover/ M i t f upon venture c&pit&l risking.
invgntaent in *nterpri*e«

Construction una other durable goods i n d u a t n e e ,

lie M i a , M the a&Jor sources of ungBpjLoy&cuit.

And those ap« th« Industrie &

th t c'^ts-io M tlM ®iIliAga«s® of irive^tore to KMk invgfetei<int»

fhi£- t h e /

w i l l not i a except in un eflviroa»«?it of encour^g«aeot concuvjlvt* to p r o f i t , *
he &«£&•


Riis fcavir^iB^at c-.n b« provided only by government."
our sueessg in prsvidiag c--.pit^l ^ i t h Ml ine*mtlvts .,na &t the

k««piag IIM gaverament'^ Viik i t , aiaijaua, & gre&t aaay people do
not s#«s to Uttd«rstana «hat we have been trying to do,

Th*re h&s bfeea an

r c c e n t i j i a Coogree& ^& to mietr,&r «r not Vt fehauiti permit X&nd
s high onou^h to givti Ml i s c e a t l v e to bullaers irtao are goii'14 to rlafc
of 'hnnninrti of eoii*-r^ i a c^eh ••<

iia Eerrices ae

for tflMM lMTg*i MMlttI iMPtlffpMSl
very ©trongiy thi.t *e should p^iTBit the* 4 f a i r chance to
«ui o i t i a ^ t e profit*

For thi& i s the &ina of buiiaiag which l i p t e g to

provide lov-reut l i v i n g ;a.- r t e r s , ae well &# e a p i o ^ e c t far



^skd though »© huTe iasurtsd aortg^ges on oa^ hundred B i l l i o n M l t t l worth of
these building;^ IkMTi BM nev«r
,ts pro^rsB.


five eeat£ 1-ajst by the PiU in th.

l e t , bect*uise of u mistfJtmk itttitud« on th« BBTt of f@w p&opit

^"h-3 ai«usicl©rstsdiCl aur p o l i c i e s , *« ao&- teft f ^ r t j - f i v e million

tioii^r& worth

of woric iitfld up, work which «ouici be giving employment to


thousand people.