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April 7, 191*2.



Mr* Bell



Mr. Socles

As you suggested, I am sending you
herewith the letter addressed to the Secretary
about which I spoke to you on the telephone
this afternoon in connection with the suggestion
that the limit on Series F and 6 bonds should be
raised from #50,000 to #100,000.


April 7 #

Bsmr floury t
In rqplj to ft r«^u«st from Jfr. Bell, X aa submitting
ssy TIOWO on tho st^gootloa that tho l i m i t on $«rl#» f wad 0
bonds •houl.i oo r&isod from f50,000 to |XO0#C00» I fool oorttdn
that tho sioafcors of tfce Board *e woll as tho ftnttldsatt of tho
ftoeorro Sft&k* w&uld agr«« w!th my pa*ttlon # «1BO« sy
IIn« with « ® «sp«ot of the e«r«ttle»ti«ii »#at t o fm an
A e&py of feis eoejmieatiMi I s «nolo»«d.
queetioa of inor«ikSlK^; th« l l a i t
F a^<t Q bonds thtuld be d«f«rr«d p«Rdlag d^eleio
t#rm ito^-sarlc«t*bl# l««u« which tb» F#dwmX itewwnr
for thi# p o r t i o n »»jr *• tiMMiriMNl *«
(1) fh# 2 l/Z per e«nt rat© carried by X^»y«ar F and § bend*
1* a tubtidy r»t# 4*aig^id prliaarily for «nall «aT©r»» Fifty
4 # l l a r i 1® ®#rta4niy not too |ow * limit for this t/p# of
(£) Tho issuo propote^ by tla» Fvdaral H#««rvi» would
the Faturtty to »i^h,t©*n y«ar« »c4 rvaorw tho tubwi^y foattiro. I t
eould, ^j»r«for«, haw a muofc hi(h«r U n i t * In flaet^ tho
slollar 3is?il proy*m»4 cou!4 latar »o raio^d or r«»o"r#4. Tho
rosed Isifto would, thorofore, *o rooh farth«r i » ifeootlsg tho
d«rtuid than would an inoro**o t o 1100*000 for P and a bondi.
tho l&»yoar 2 l/2 par oont mm^mrk»% is^uo wo
would ooc^Mito nueh loos with lc**£-t#m op«QHa&rkot l««y©» whloh you
say with to offer fro» t l e » to ti&e* twolro yoar Z 2/2 ^or oomt
bonds of tfeo F aM • tgrpo9 If fe# l i m i t b# ral«o4 t o f 100*000, would
definitely eompoto with opOfNaarkot isftuoa* H*o l@«yoar is&uo wo
propoM, on tho ^tlior hamd, would bo at 2 ly^ por oont snuoh olo»«r t o
tho «arlB»t aad would not oonpoto on a profontttial basis with l
tora Qpmto^mrk&t i s s u e s .
As you kn<m0 I am rroatly IS) f«cvw of rosortlng
to B«m-«»rk»t l$eit«s« I boll«T«, l»owoiror.9 for tt*« roasoms
stated, that tho ptirpeto would bo aoeomplishod «meh utoro amtisfao*

fion<Wftbl» H«nry Korfo&taum, 3r»


April 7»

proposed in our m«Biorandaei# tttan tgr imi«l&g the limit on F
Q bonds#

6«or*taiy of the
18^thinrton, & C*