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February 15, I9k3
Chairman Eccles
David M. Kennedy

The following summary of recommendations in a report on the December
drive in the New York district, prepared by Perry E . Hall, Executive Manager,
is of interest in connection with the formulation of plans for the April drive,
1* The planning, coordination and direction of all sales of Government
securities has now become a task of sufficient magnitude to warrant the appointment of a single director of sales of all Treasury securities, in the Treasury
under the Secretary and Under Secretary,
2* The scope of future Victory Loan drives should be greatly broadened
to provide for covering the maximum number of prospects. There should be only
three—-certainly no more than four-- national drives in any twelve months 1 period,
such drives to last at least three, preferably four, weeks* Offerings to the
commercial banks should be separated from the drives for non-bank funds* (A
minority of the members of the Fictory Fund Committee do not agree with this last
3« The respective organizations of the Victory Fund Committee and the
War Savings Staff should be integrated under the leadership of the director of
i. For a drive of the necessary magnitude there should be a national
coordinated advertising, publicity and sales promotion campaign and the Treasury
should be given appropriations by the Congress to provide for a large part of the
expenses. Unified direction from the Treasury is essential but there should be a
continuation of the present flexibility •which allows for local autonomy in the
various Districts.
5* At the earliest possible date, the Treasury should determine the
time of the next drive and the approximate goal in dollars* (The roport suggests
a minimum of six weeks 1 notice to the Victory Fund Committees of the details of
the drive.)
6* The securities offered to the public in future drives should be of
types suitable for ajid available in denominations small enough for broad distribution*
(The report recommends denominations in the 2 l/2s of as small as |100, since many
potential sales were lost because of the largef500)denomination in December•)
7* The sale of Savings Bonds of Series F and G should be discontinued.
If these bonds were not available, sales of the 2 l/2 per cent Treasury Bonds of
I963-68 would be greatly increased. As a substitute for Series F and G Savings
Bonds, another form of savings bond could be devised incorporating features which
would offset the omission of a Mcashing in" privilege.

To: Chairman Eccles
From: David M* Kennedy

~ 2


8. In the December drive the principal sales resistance came from the
doubt and confusion in the public's mind -with respect to taxes, pay-as-you-earn
plans and compulsory savings. An early and clear-cut definitive decision on
these points would have a beneficial effect upon the Treasury bond-selling program.
9 # The successful December drive confirms the established policy in
this District of relying primarily on banks and their organizations and, where
available, on investment dealers for sales leadership* In Hew York City the
formation of teams composed of banks and dealers generally proved to be effective*
In most cities, however, reliance must be placed wholly or largely on the banks
because of the small number of investment dealers.
The report suggested that the Treasury might re-examine the question
of allowing purchasers to make payment in installments* We are reaching the stage
where many purchasers will have to buy out of anticipated resources.
The report further pointed out that there is too much time wasted
determining the question of credit for sales as between Districts* The organization
risks putting itself in a bad light with purchasers in allowing sectionalism to
get so much emphasis* Consideration should be given to reserving some of the
larger corporations which have funds on deposit in the principal cities of the
various Federal Reserve Districts for national coverage under direction of a
central committee.