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January 23, 19U6.

Dear Harolds
Because of your interest and responsibilities, I
tiiought you might like to see, if you had not already noted,
the relatively brief commentary I issued in connection with
the Board*8 action raising margin requirements to 100 per
cent. Accordingly, I am venturing to enclose a copy.
I know that in the rush of affairs here I sometimes overlook statements that I would like to take note
of, which is my excuse, if any is needed, for bothering
you with this. I purposely refrained from being any more
explicit about the way in which the commercial banks are
competing for an excessive amount of Government securities,
but I wanted to say enough to call the attention of those
who would understand its significance to this extremely
serious situation.
Sincerely your«,

The Honorable Harold D. Smith,
Director of the Budget,
Washington 25, D. C.