The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
xj G&v.Eccles B'ROM AEMAHKS: Herevdth a draft of & letter to the xresident. riser has checked the statements and says they are correct. He says the long bonds are aoim just under S points. CHAIRMAN'S OFFICE May 17, 1940. My dear.Mr. Presi dent: It occurred to me that you would be interested to know tew well the bond market has withstood the ahoeic of the past week's events and tfeat you would find it re&sswrSj&g from the standpoint of sucli additional financing as may b© necessary becautae of increased defense needs. At no tin© lias there been any disorder in tiie market. The Open Market Coma!ttee has found it necessary to purchase only $9*5 Billions of Government securities, whereas in the comparable period after last September 1, some $300 millions i%ere purchased to steady the market. The decline in long term Qniii IIBWIII n has arerag«d slightly less thaa 3 points, while short term issues h&Ye declined much less, Buyera ha^e 'been in the market rl^it aloEg, so that at E S tlmo hac there been a sitiiatioii la which there was any snbstentlal Tolisne of offerings witii E O takers. I think the oatparatlf* stability of the market haB beoa due not only to the fteserre System's taivae«i that it stood ready to exert its influence towards steadying the market and to the experience of those investors wbo sold out last September only to discover that they were tumble to buy back at lower prices, as they had hoped, but mairJLy to the fact that the YQlum© of uninvested funds and of excess reserves of the banking system is so vast that the market can be depended upon to absorb ¥irtually any conceivable amotmt of Government securities that it may be necessary to offer in the future. Respectfully yours, U S« Beelee, Chairman. The Honorable the President of the United States, White House*