The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
H ARM ON V SW A R T A s s o c ia t e s , in c 84- W I L L I A M S T R E E T N E W Y O R K , N.Y. . W H I T E H A L L -4 -3 1 4 6 IN S U R A N C E - B O N D IN G - F IN A N C E November 27# 1959» Hon* Marriner S. Eccles» Chairman Board of Governors, Federal Reserve System, Washington, D. C* Dear Mr. Chairman: I have read a limited press report of your talk on November 9th. to the bankers at St. Louis and coraaend you for the many pungent statements which you made* You favor "increasing domestic purchasing power.1* That is fine# You favor doing this by decreasing consumption taxes. Unless these consumption taxes are replaced by other taxes, this deorease only results in lowering the total of domestic purchasing power or consumption* Vihy is it that you and other leaders do not step right out in front of the parade to hanaer home the real basic truth about our economic difficulties? You go a long "Way, and to the discerning reader it would seem fully evident that you are capable of stating the case in definite, if not startling terms* The country’s economic problem is dished up as unemployment* However, unemployment in itself is not the problem* Is it not rather how business and industry can sell their products? As long as business is able to find a buyer for what it has to offer, it is not in the least concerned as to whether the buyer is employed or unemployed* Is it not true under our money-profit system, in the absence of other measures for distributing purchasing power that increase in employment only more rapidly hastens the building up of inven tories and the necessity of again greatly increasing unemployment* The reason for this being that in the normal turnover of our system of production, business is unable to distribute enough purchasing power to buy the resulting products which are offered for sale* The only purchasing power available to move these goods into consumption being the insufficient amount of purchasing November 27* 1939* Hon* Marriner S. Ecoles* power distributed in the production of these same goods* It is reported that at the end of your present term, you may not acoept re-appointment but choose instead to run for the Senate* If you should do this with your mind set upon doing something about Monetary Reform, I think it would be wonderful* Very t ru ly yours, EVSsll HARMON V * START. November 28, 1939* Mr. Harmon V. Swart, &U 'William Street, New York City. My dear Mr. Swart: On behalf of the Chairman who is temporarily in the West, I wish to acknowl edge receipt of your letter of November ¿7, in which I know he will be interested when he has an opportunity to read it upon his return. You may be interested in seeing the complete text of the St. Louis address to which you refer and, accordingly, I am en closing a copy. Reports that the Chairman might run for the Senate are entirely unfounded. Sincerely yours, Elliott Thurston, Special Assistant to the Chairman. enclosure ET:b H A R M A O N V I s s o c ia t e s S W A R T , in c . ©4 w il l ia m new street york . n .y . W H I T E H A L L <4-31-46 IN S U R A N C E - B O N D IN G - F IN A N C E Dooosiber i)., 1939* Hon* Marriner S. Eccles, Chairman Board of Governors, Federal Reserve System, Washington, D» C. Dear Hr* Chairman: Your address to the banters of St* Louis on November 9 ^ * so kindly senfc to me by Mr* Thurston, has been read with very ia»oh in te re s t. P a rtic u la rly impressed was I by the seoond paragraph on page fift e e n in which you gently — oh so gently — point out the p o s s ib ilit ie s of “taxation that w i l l keep these funds, (savin gs) that are unused fo r plant or fo r dividend purposes moving in the income stream*” You a lso say these funds oannot be taken out o f the income stream without reducing i t and thus reducing employment and production*" Right here you have the whole kernel of the nation’ s economic problem ~ "d istrib u tio n of buying power*” This was' most lu o id ly explained about twelve years ago by Foster and Catohings in the book "P r o fit s 1* — beginning on page 221* They describe i t as "the dilemma of t h r i f t * " I find that men in both banking and business are shocked with a sense of fru stra tio n whqn they "see" that t h r if t which i s so essen tial to the in d ivid u al^aevastatin g in it s e ffe o t upon the nation as a whole — under our present economic system* However, that is the fa o t* I hope that you w i l l continue to explain th is fa c t to the f u l l extent of your opportunities* The public must be made to re a liz e that money must be made "unhoardable." ■When money f a i l s to do i t s job of exchanging goods and services, i t simply must be foroed into a c tiv ity * Conditions must be brought about or oreated which w i l l make i t more desirable to hoard goods than money* Very tru ly yours, H7S:11 Harmon V* Swart* December 11, 1939» Mr. Harmon V. Swart, Harmon V. Swart Associates, Inc., 84 M l l i a m Street, New York City. Dear Mr. Swart: Your letter of December A and your pre ceding one were particularly interesting to me and I want to express my appreciation of your comments and encouragement. I think you have aptly expressed it when you point out that men in both banking and business are shocked with a sense of frustration when— and if— they grasp the fact that thrift, which is de sirable for the individual, can be entirely unde sirable from the standpoint of the economy as a whole. I agree with you that the essential problem is one of how business and industry can find a market for the increasing volume of production which is identical with a rising standard of living. Sincerely yours, M. S. Eccles, Chairman. ET:b
@FedFRASER