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July 17, 19*3 Chairman Eccles Treasury financing program L. M. Piser Mr. Seltser, one of Secretary Morgenthau1s part-time advisors, phoned this morning and asked a few questions about the financing memorandum that the System submitted. In the course of the conversation, he suggested that i t might be better to raise the b i l l rate to l/2 of 1 per cent than to offer 9-®onth b i l l s . He also suggested that if the Treasury and the System consider theiaselves committed to 3/S of 1 per cent on three-month b i l l s , i t might be desirable to extend the naturity to four months and to issue b i l l s at l/2 of 1 per cent. It seems to me entirely possible that he will make this recommendation to the Secretary. In addition, Mr. Seltxer said that he thought i t undesirable both to extend the maturity on 2 per eent bonds beyond 10 years and to sell a large additional amount of these issues to banks. His position on this point was that the Treasury and the System should sot deviate from the 10-year limitation on bank purchases of new issues and that if a large amount of 2 per eent bonds raised the income of the banking system materially a difficult political situation would be created*
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