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2317 South Jackson St.
Denver, Colorado

March 10, 19U5

Mr. Marriner S. Eccles
Chairman, Board of Governors
Federal Reserve Bank
Washington, D. C.
Dear Sir:
In your search for practices which lead to inflation and
particularly with reference to your desire to curb "margin" trading,
please do not overlook the extreme example offered by real estate
dealers and builders at the present time. It is common practice
in Denver and I am sure elsewhere, for a builder to obtain permits
to construct "war housing", obtain a 90$ loan from the F3IA and then
rent the property for an amount which brings an extraordinarily
large return on the equity. After renting for a few months, many
of these housing units are sold at profits which must run from 100%
to 500$ or 600%.
In buying stocks on the Stock Exchange, a loan from a
broker can be obtained equal to about 50/* of the value of the stocks.
Likewise, collateral loans can be arranged at banks at around the same
level. But in buying "war housing", a loan of 90/° caii D e obtained,
and the ironical part of it is that the money is actually put up by
a governmental agency and at a very low rate of interest.
In fact, builders many times include an exorbitant wage for
themselves in determining the cost of the property, so that the loan
is closer to 95/° of the true cost. You can readily see that this leads
to ownership of real estate on a very thin margin of equity and is a
great inducement to speculate wildly in the construction of large
housing units. If you are truly interested in curbing inflationary
practices, the housing industry offers a far more flagrant situation
than the stock market. Perhaps it would be wise to investigate these
situations in the order of their importance.

Very truly yours,

David F. Lawrence

March H , 1945.

Mr. David F. Lawrence,
2317 kouth Jackson btreet,
Denver, Colorado.
Dear Mr. Lawrence:
This is to acknowledge your letter of
March 10 which deals with FRh. practices or procedures,
and I am, accordingly, referring it to Mr. John B.
Blandford, Jr., Administrator of the National Housing
Agency, for his information and such reply as he may
care to make,
I appreciate your interest and courtesy
in writing.
Sincerely yours,

[. S. Eccles,


March lU, 19U5-

Honorable John B. Blandford, Jr.,
Admi ni s trator ,
National Housing Administration,
Washington 2*?, D. C.
Dear John:
Enclosed is a letter I received from Mr*
David P. Lawrence of Denver, Colorado, whloh cites
alleged practices in regard to EHA financing operations.
I am not familiar with the situation to which he refers
and thought possibly you would be interested to see it
and sight care to reply.
Accordingly, I have advised Mr» Lawrence that
I was referring his letter to you* In case you feel
that some reply is appropriate, I would appreciate having
a copy for ay oura information.
With kindest personal regards,



March 21, 1945


Marriner S. Eccles, Chairman
Board of Governors
Federal Reserve Bank
Washington, D. C.
Dear Marriner:
I think Mr. Lawrence misunderstands the entire
3PHA financing operations, so I suggested that he visit
W. M. Bennett, IRk State Director in Denver.
Attached is a copy of my letter to Mr. Lawrence.




MAR 211945
Mr. Barid 1, La-wroaojo
231? South imdmm, 8tre#t
Bear Mr. Lawrencej
M&rriner S. Iccles, Chairman of the Board of
of the federal &o3*r?o Bsak, has aakod s* la roply to your
latter af Mar oh 10.
lo one questions that thoro has b-?*n a re&l estate i»—
flatl<m aad v« all are trytag to @3««at it. lo«9vorv t)io
practicoi jom. otto la your lot tor to Mr. loeloo do not exiot
oo far MM I know.
In the flrot pl*C6, tko JFedor&l Mooaliag Admlnistratloa
do«s aot lo«aftayaoney. 411 It can. do It l»»ur« a mortg&go
loan sado oy a privato loading instlttttioii. tho pr^tiuarotion Is
that tho private loading instltutioa »««tea to aako a sound loan
—and tho H A ekoeko «#o& that loaa for ito ovn protection.
la the toeoftd place, if warfcouaingio boiag oold at tho
profit you mention. It is a eaoo for court action aad vo vould
appreciate oo*o evidence.
It is true th&t ISA Title TI vas paoood by Coagreos in order
to protect builders under w&rtiae condition*. Bat as close a choek
as possible under euch coaditieaa 1ms been Bade throt^iout the war
I suggest you pay & vioit to W. K. Bennett, MA Stato
Director, 203-211 Boston Building, Denrer. Ho xay be able to explain oo&o of the situations which trouble you*

John 1* Blandford,

©OS Mr,