On October 29, 1931, Howard received a letter from Harry Bates, editor of Soldier and Fortune, Astounding Stories and Strange Tales (The Clayton Magazines, Inc.):

Dear Mr. Howard:

The originality of your story, "The People of the Dark," appeals to me. I liked it better than anything of yours I have yet seen.

But I feel it will be much improved if altered. Being a short story, it should not be told in chapters. Asterisks may mark important breaks.

The chief fault that I found in the story was that there was too much fighting and chasing and maneuvering within the body of the story - say, from around page 7 to page 18. I feel that this could be cut by one-third; possibly, in skillful hands, by one-half. Too much of this fighting, physical action spoils the rounded reincarnation effect which is the chief merit of the piece. And such prolonged bloody physical action does not go well in a weird story, anyway. I am not suggesting that you change the quality and nature of the conflict in the body of the story, but only its length.

How about it? If you care to cut this yarn I will be glad to see it again. I cannot promise you now that it will be bought, for Mr. Clayton reads and decides on all stories with me. However, we usually agree pretty closely.

Sincerly yours, 
Harry Bates, Editor
SOLDIERS OF FORTUNE
ASTOUNDING STORIES
STRANGE TALES

In a letter (#184) to Tevis Clyde Smith, ca. November 1931 we learn about the rewrite mentioned above:

Just before I left Cross Plains, work descended on me in large quantities. A novelet returned from Street & Smith, requesting that I alter it — i.e., eliminate the saloon and speakeasy setting. My hero was a bouncer in a tough waterfront bar. I made him a cook in a hamburger stand. Also a lengthish yarn from Clayton, requesting me to cut down the action, which they said was out of place in a tale of that nature. I acceded to both requests, practically rewriting the stories, at least once, some parts more, and wrote a Costigan yarn before I went all to pieces. I feel that my revised jobs will be turned down because I sent them off without corrections, without even reading them over for mistakes. When I finished them, I’d been working so long and so hard I wasn’t in any shape to hunt for mistakes. I tried to read the stuff over, and the sentences didn’t make sense to me.  

The Street & Smith story mentioned is "Fighting Nerves".

In a letter (#189) written to HPL circa January 1932, he mentions the story at the end:

P.S. I almost forgot to tell you that I finally made Clayton’s Strange Tales with a yarn called, “The People of the Dark” a tale of reincarnation, pre-Roman Britain, Mongoloid aborigines, yellow-haired Britons, Irish pirates, and anything else I could lug in; I hope you’ve also made this market, and certainly, no weird magazine is complete without your magnificent tales.

Howard was pleased with what the Claytons paid which is mentioned in a letter (#191) to Tevis Clyde Smith, circa February 1932:

Oh, yes; I finally made Claytons’. I sold them a couple of yarns in a row, and while they kept me waiting awhile for the dough, they paid well when they did pay — $134 for one, and $144 for the other. Short stories too. I hope to gosh I can sell them a long novelet.

The first one is "People of the Dark" and the second one is "The Cairn on the Headland".

From a letter (#195) to Tevis Clyde Smith, circa March 1932:

Glad you liked the Roof business and the Sowers stuff I’ve had quite a few praises on the Sowers thing, but don’t know whether they’ll get into the Souk. Likely not. Those yarns I sold Clayton were to their Strange Tales.

The "Roof business" is "The Thing on the Roof", and the "Sowers stuff" is "The Sowers of Thunder". The Souk is the letters column of Oriental Stories and the stories sold to Clayton are as mentioned earlier: "People of the Dark" and "The Cairn on the Headland".

In another letter (#206) to Tevis Clyde Smith, circa May 1932, we learn:

By the way, a friend of mine in Marlin wrote Bates, boosting my “People of the Dark”, and he wrote her telling her that he guessed she could consider me as a regular now — I hope he remembers that, and holds to it. God knows I need the money. Markets are cracking every day. The depression is beginning to lick the wood-pulps.

The friend mentioned was Mrs. F.M. Torbett, of Marlin, the mother of Howard’s friend Thurston Torbett.

And after receiving a letter from Lovecraft, Howard replies in a letter (#208) on May 24, 1932:

Thank you very much for your comments on “People of the Dark” and “The Horror from the Mound.” Your remarks concerning the latter story especially encourages me. I’d begun to fear it was a complete wash-out, seeing that Bates originally rejected it, and some of my friends weren’t much impressed with it. But your kind comments revive my confidence. Please extend my heartiest thanks, also, to Mr. Cook and Mr. Munn, both gentlemen for whose literary talents I have the sincerest regard. I fear my demoniac Black Book scarcely deserves Mr. Munn’s high compliments.