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Board of Directors: G. E. L E I G H T Y J. P. S H I E L D S A. J. G L O V E R IRVIN BARNEY CHAS. J. MacGOWAN GEO. M. H A R R I S O N LABOR NOT PUBLISHED FOB PROFIT ACCEPTS NO ADVERTISING LABOR BUILDING, 10 INDEPENDENCE AVENUE W A S H I N G T O N 4. D. C. EDWARD KEATING, Mam W . P. N E V I L L E , Treasurer February 19, 1951 Hon* M. S. Iccles, Federal Reserve System, Washington 25, D. C. Dear Mr. Socles: Official Washington Weekly Paper of the following Recognized Standard Railroad Labor Organizations: Brotherhood of Locomotive Engineers, J. P. Shields, Grand Chief Engineer. Brotherhood of Locomotive Firemen and Enginemen, D . B. Robertson, President. Order of Railway Conductors, R. O. Hughes, President. International Brotherhood of Blacksmiths, Drop Forgers and Helpers, John Pelkofer, General President. International Association of Machinists, A. J. Hayes, International President. International Brotherhood of Boilermakers, Iron Shipbuilders and Helpers of America, Chas. J. MacGowan, President. Sheet Metal Association, dent. Workers' International Robert Byron, Presi- International Brotherhood of Electrical Workers, D. W . Tracy, International President. Brotherhood Railway Carmen of America, Irvin Barney, General President. Switchmen's Union of North Amerioa, A. J. Glover, President. Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employes, Geo. M . Harrison, Grand President. The Order of Railroad Telegraphers, G. E. Leighty, President. Brotherhood of Maintenance of Way Employes, T. C. Carroll, President. Brotherhood of Railroad Signalmen of America, Jesse Clark, President. International Brotherhood of Firemen and Oilers, Anthony Matz, President. Railway Employes' Department, American Federation of Labor, Michael Fox, Acting President. Tour letter of February 6, addressed to Mr. William P. Neville, Secretary-Treasurer of LABOR, has been referred to me. I did not have an opportunity to examine the article to which you refer u n t i l after I had read your statement. I have been away frcm the office f o r a considerable period, because of illness. I am sure I need not say to you that no one connected with IABGR would deliberately do you an injustice. We have always regarded you as one of the outstanding liberals i n the so-called "Hew Deal" administrations. Perhaps I am Justified i n recalling that our l i t t l e paper was the f i r s t publication with a national circulation which gave adequate space to your economic views. That was i n the Hoover administration, as I recall i t . Friends i n Utah sent us copies of speeches you delivered before business groups i n your home state and we were very favorably Impressed. When you came to Washington as a member of the Federal Reserve System, we rejoiced, and said so. I w i l l examine the documents you attached to your letter and may communicate with you again. For the time being, may I say we have been greatly perturbed by the suggestion that something might be done by some government agency which would d i s - \ turb the stability of the bond market. We were not r e ! assured when we found that certain big bankers were adj vocating a policy which we feared might interfere with government support of bond prices. Workers who Invested i n government securities s t i l l remember what happened after World War I . A repetition of that tragedy seems to me to be unthinkable. time. However, I must not go into that subject at this F i r s t I must read spur statements. With a wOTld"of good wishes, I remain ^Sincerely,,( Manager. February 6, 1951. Dear Mr. Neville: I have read with interest the statement in your paper, LABOR, of February 3 entitled "Eccles Would Take Cost of War Out of Workers1 Hides"• You further state that I have been considered a l i b e r a l and imply that my statement before the Joint Committee on the Economic Report on January 25 takes me out of that classification. I believe i f you w i l l read carefully my entire statement and not portions taken out of the context you w i l l not be able to come to that conclusion. I am, therefore, enclosing herewith a copy of my statement, which I hope you, or some of your economists, may find time to read carefully and objectively. I have no axes to grind with any group and there is no special group which I am i n terested in protecting. I am not & partiisan. I have always tried, in accordance with my best judgment, to do what in the longer run would be in the best interest of the country as a whole. I am as anxious a;s anyone to preserve our capitalistic democracy. To do this, the defense of the dollar is as important as the defense of the country. You may be interested in an article, entitled "The Defense of the Dollar", which I prepared last September for FORTUNE, which appeared in the November issue of that magazine. Whether they may be adverse or favorable, I am glad to have your reactions to my views and I appreciate the interest you take in them. I t is only by disagreement and debate that the essentials of democracy is preserved. Sincerely yours, M. S. Eccles. Mr. William P. Neville, Secretary-Treasurer, LABOR, 10 Independence Avenue, Washington, D. C. February 23, 1951 !r. Edward Keating, Manager, LABOR, 10 IndeDendence Avenue, Washington 4, D. C. Deer 4r. Keating» I appreciate your letter of February 19# and hope that a reading of lay statements in f u l l w i l l olarify any misconception* as to where I stand on this vitally important issue of preserving the purchasing power of the dollar* In one paragraph you mention the fact that you have been greatly perturbed over the possibility that something might be done to disturb the stability of the bond market, and of the workers1 ooneern that there may be some repetition of the post World War X experience, A>st workers, I believe, have invested their savings in Series £ bonds, rather than the marketable bonds which are held by banks and insurance companies, No matter #iat may finally be done about maintaining or lowering the support price for marketable bonds, the Series E bonds will not be affected—-their value at any time prior to maturity is predetermined and set forth in tables of redemption values. Even in the event marketable bonds dropped below par, any worker who holds a Series E bond can claim the predetermined redemption value at any tine, or the f u l l face value upon maturity. There is no possibility, therefore, that a Series £ bondholder could suffer any loss because the value of marketable long-term bonds were allowed to decline. What is and should be of serious concern to each and every worker is the decline in the purchasing power of the dollar in his pay envelope and the dollars invested in Series E bonds, when you consider that today's dollar is worth only 56 cents in terms of what i t would buy 10 years ago, you realise how serious the inflationary threat to the workers' standard of living has become. For responsible people to argue about the increased cost of servicing the public debt resulting from a drop in the price of marketable Government bonds >/ - 2 I think now, as never before, the t i n e has oome for a l l those who believe i n sound monetary, o r e d i t , and f i s c a l policies directed t o ward defending the value of the d o l l a r , to stand together and to present the r e a l l y basie issues f a i r l y , d e a r l y and objectively to the p u b l i o . Sincerely, If. S. Secies. evs CHSxraf
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