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THE SECOND NATIONAL BANK OF BOSTON THOMAS - BOSTON MASSACHUSETTS P. B E A L PRESIDENT May 18, 1945 Mr. M. S. Eccles, Chairman Federal Reserve Board Washington, D. C. Dear Mr. Eccles: Thank you f o r your l e t t e r of May 15, explaining more in detail than was stated at the recent meeting of the Federal Advisory Council with your Board, your views on the need of establishing the 100$ requirements and making a substantial increase i n the present excess p r o f i t s tax on capital gains. I appreciate your arguments in favor of these r e s t r i c t i o n s on speculation and have noted with interest what took place in the past which you believe the inactment of such proposals would prevent i n the future. As you state, such corrections of inflationary tendencies i s a matter of alternatives. Personally, I cannot help continue my feeling that the p o s s i b i l i t y of such actions further r e s t r i c t i n g the free flow of capital which w i l l be very helpful t o increased production i s greater than the possible benefits t o be gained under conditions as they now e x i s t . I f speculation became much greater with a substantial further increase i n p r i c e s , which was largely the result of such speculation rather than the result of the relative supply and demand then i t might be that the benefits of some such measures restricting speculation would be greater than the dangers. I s t i l l believe that the earliest possible increase i n supply of whatever may be sought f o r purchase i s the best means of avoiding undue increases in the price of such things. I appreciated the opportunity of meeting with you and your Board as a temporary member of the Federal Advisory Council, and hope that sometime I may have another such opportunity of again seeing you and your associates. President
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