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C A P I 1 M $ 5 0 , 0 0 0 ? ? S U R P L U S 6iawwiMi®) Deo. Mr M S E c c l e s , c h a i r m a n B o a r d o f F e d e r a l R e s e r v e System W a s h i n g t o n , D C. Dear 30. f $ 5 0 , 0 0 0 ? ? Jiwwm, 19^7. Governors Sir:- causes We h a v e a c o p y o f and c o n t r o l s . your current Inflation problem, We a r e a s m a l l "feank 5 , 0 0 0 , 0 0 0 . 0 0 i n a small town, 4 0 0 0 , i n a f a r m i n g c o m m u n i t y . We t o n o t t h i n k i t i s t h e l o a n s we o r t h e ' b a n k s make t h a t w i l l c a u s e t h e i n f l a t i o n a s we t h i n k any b a n k t h a t w e n t t h r o t h e t r o u b l e y r s ago w i l l t r y a n d be on t h e s a f e s i d e t h i s t i m e . What i s c a u s i n g t h e i n f l a t i o n i n G l e n w o o t a n d o t h e r t o w n s i s t h e GOVERNMENT a g e n c i e s t h a t make a n t g u a r a n t e e l o a n s . T ^ e F H A w i l l g u a r a n t e e l o a n s o n homes a t 9 0 $ o f c o s t , t h e Or I b i l l w i l l g u a r a n t e e a t n l O O ^ . T e p r i c e o f h o u s e s h a s g o n e u p lOOflf s i n c e t h e y h a v e s t a r t e d t h i s . We k n o w o f a l o t o f l o a n s t h a t h a v e Tteen m a t e a n d g u a r a n t e e b y t h e g o v e r n m e n t w h e r e t h e p u r c h a s e r h a s t h e home a n t money i n h i s p o c k e t f r o m t h e t e a l . I f a p e r s o n c a n b u y a home g e t t h e home a n t some c a s h , i t t o e s n o t make a n y t i f f e r e n e e w h a t t h e y p a y . T ^ e o t h e r F H A l o a n s t h e y make, even i f t h e y know t h e y a r e n o t g o o t , as t h e government takes t h e i i over when_they missa payment, t h e l o a n i s j u s t m a t e t o make t h e s a l e . The P G A w i l l t a k e l o a n s no bank e x a m i n e r w i l l p a p s . T^e f e d e r a l l a n d bank w i l l w i l l l o a n 75% o f t h e c o s t o f a n y f a r m , n o t t h e v a l u e . Tlle way we s e e i t t h e g o v e r n n e n t a g e n c i e s a r e w h a t i s c a u s i n g t h e i n f l a t i o n a n d i n t h e e n d t h e y w i l l own so much p r o p e r t y a n d & a v e t o p u t u p so much mdmey t h e g o v e r n m e n t w i l l n o t Tie a i s l e t o s e l l b o n d s f a s t e n o u ^ h t t o p a y t h e b i l l . Yours Very Truly, January 1948. M r . L . G. Dean, o a s h i e r , Glenwood S t a t e b a n k , Glenwood, I o w a . Dear M r . Dean: On b e h a l f o f Chairman E c c l e s who i s . , spending t h e h o l i d a y s i n Utah, I wish t o ack n o w l e d g e y o u r l e t t e r o f December 30* You may n o t have seen t h e a d d i t i o n a l s t a t e ment w h i c h M r . E c c l e s . p r e s e n t e d a t t h e same t i m e he r e a d t h e one on t h e b r o a d e r a s p e c t s o f t h e c u r r e n t i n f l a t i o n problem. This separate statement deals w i t h t h e h o u s i n g m a t t e r w h i c h y o u d i s c u s s and I am e n c l o s i n g a copy because o f y o u r i n t e r e s t i n t h e subject. Sincerely yours, E l l i o t t Thurston, A s s i s t a n t t o t h e Chairman. Enclosure ET:b
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