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T O W N S E N D •; • 7 5 2 11BG u n iv e rs ity LEVEY B O X N O . 61 L I N W O O D S T A T I O N D E T R O IT , M IC H . January 6, 1939 Mr. Iferriner S. Eccles, Federal Reserve, Washington, D. 0. Dear Mr* Eccles: I am enclosing herewith copies of letters which I sent to Mr. Lewis Haney on October 10th, 1938 and January 5th, 1939, "which I believe may be of interest to you. I also wish to acknowledge receipt of your letter of December 7th, 1938 in which you enclosed a copy of your address delivered Decomber 1, 1938 before the Hevf York Chapter American Institute of Banking in Hew York City« In this address I feel you have clearly and entirely summed up the present situation. I think that American banking should be separated entirely from control of industry. They should be made to go out and ■work for a living for tinder the present set-up they have absolutely no community of interest with our people« I again wish to thank you for your courtesy in sending me a copy of your address as I have most certainly benefited through reading the same« "THERE IS N O SUBSTITUTE FOR DEMOCRACY" ( 0N GEORG E (COPT OF L3TTER SSKT TO MR. LETIflS HANEY) October 10th, 19i>8 Mr. Lewis Haney, King Features Inc., New York City, N.Y. Dear Mr. Haney: I read with interest your article under date of October 6th headed "Hew Deal lays slump period on business men”. I note particularly your comparison of the President*s attitude with that of Hitler in desiring peace on his own terms. As a constant reader of your column, I have during the past twelve months particularly noticed your placing the blame for present financial conditions on Government interference. Just what has big business to offer the .American people other than waving the constitution or blaming the Government for everything that is happening. Who instructed the banks to go out in the late 20*s and with other people*s money attempt to buy up con trol vf American industry and business through mergers which they unloaded on the public at fancy prices - to unload hundreds of millions in foreign bonds, that have since turned out worth less on the investment public - the most ruthless period of liquidation placed into effect by bankers during 30 and 31 which threw hundreds of millions of dollars of undigested mer chandise on the market at distress prices with which no manu facturer could compete, causing plant shut down, increasing unemployment,and intensifying the holocaust. These same gentlemen who as President Roosevelt said "had abdicated from their positions of authority" and now having cleiabored back to prosperity on the coat tails of Mr. Roosevelt with their coffers filled, complain that everything Mr. Roosevelt proposes is all wrong# During the past 35 years our business leader» have taken the American worlsnan who was living within walking distance of his place of employment, transported him to a gigantic city, making possession of his own means of transportation a neoessity, increased his productive power, taught him the benefit of motor cars, radios, moving pictures, created billion dollar corporations with annual earnings running into the hundreds of millions, ex ploited every principle of our American Democracy to their own benefit and having failed to consider the American workman or to provide for him in their order of things, being absolutely un willing to assume responsibility for their own creation they are now ready to sell Democraoy down the river, turning to Faoism in a mistaken belief that by so doing th«y will perpetuate their own position* #2— Haney* Throughout the ages and history of mankind every past era of civilization has been destroyed by the greed of those at the top, their blind refusal to give those at the bottom a more equitable share of what they are producing. Is history again to repeat itself? I see a direct tie-up between what is hap pening abroad for which leaders of European Democracy are directly responsible -with happenings in this country during the past twelve months. The sit down strike of Capital. The utter lack of sales effort during the current year, and even today with orders on hand for hundreds of thousands of auto mobiles no great effort is being made to speed up production. We see reports in the papers of the tie-up of industrial leaders with unamerican activities, Mr. Hitler bestowing decorations on leading American industrialists. The cry of Communism will not continue to act as a smoke screen, protecting those who are definitely engaged in sabotaging our Democracy. I am not impressed by the claim of Rugged Individualism that has per mitted bankers to loot railroads, issuing hundreds of millions of dollars in bond issues, the proceeds of which were used mainly in fnanoing the acquisition of control in other units, and when said control had BHtarti accomplished its purpose, additional bond issues were floated to finance the resale of same at advantageous profits to themselves. "Why blame Labor unions entirely for the conditions that these roads now find themselves in? Neither am I impressed by the claim of bankers that they cannot find worthwhile loans or secured investments for their funds. I think if the service charges that the bankers have installed since 1933 whereby they are able to pass on the entire cost of operation, and at times I strongly suspect their dividend requirements also, to their depositors, were to be eliminated and the bankers compelled to go out and work for a living they would soon find plenty of attractive and meri torious loans. Sincerely yours, GL:DS CrEORGK LEVEY January 5, 1939 W m Lewis Haney* Kings Features Xno*, Bear York City, E.Y* Dear Mr* Haney; Z have noted with interest certain oonaents in your articles of the last few days on the philosophy of Ur* Booles* Ton dispute the statesnt that Government borrowing ore&tes bank deposits and thereby provides newly created money. How do you account for the fact that we have some fifty five billion dollars in bank deposits as against a total of six billion dol lars of currency in existence? You ornament on those greedy buyers of foreigi bonds in 1929 that ware bad« How about the distributors who exploited the desire of thsse "greedy investors* who In many instances Z knew were only seeking a secured investment that had been highly re commended to them« To offset Hr* Socles* statement, what did the banlssrs accomplish in their desire to obtain control of our national industrial life that brought on the crisis of 1929« In a desire to save themselves from the results of their own felly they placed into effect the most ruthless period of liquidation the world has ever eoen so that by 1935 our entire banking systen was a shambles« Thousands of business msn were forced out of business through this ruthless liquidation, others forced to close their doors unable to oompete with distress merchandise of un precedented proportion« Sow having claxabored back to prosperity on the ooat tails of Mr* Hoosevelt these gsntlemen oseplaln of Qovsmaent spending* the very spending that enabled theaa to do what they did in 1953* 1954, and 1935* X feel that if the Government were to make these gentleman go cut and work for a living* stop the easy picking of Government financing* eliminate service charges which enables the banker to pass on their entire cost of overhead to the depositors, and in many instances Z strongly suspect dividend requirements* Mr* Eccles might not have so difficult a time In placing the funds created through Government borrowing* into circulation« Sincerely yours* GL:DS m m OS LEVEY January 9, 1959 Mr* George Levey, Box Ho. 61, Linwood Station, Detroit, Michigan* Dear Mr* Levey: Permit me to thank you for your letter of January 6th enclosing copies of the two letters which you addressed to Sir* Lewis Haney* X a;a gratified to know that you challenged some of the statements which lie has been putting out, and I was interested to note the incisive points which you laade* I appreciate your interest and your thought fulness in sending m this material* Sincerely yours. M* S. Kccles, Chairman.
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