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June tot From Underwwretery Bell Chalnasn Beelos Tbs Board p>aterd&y aft^naocm eonsi &©*"#*£ in detail tho program fcr isstslag Treasury ismx notes* Keg&rding Serial A notes, we present for eoasideratioa tfee possibility of ineremslog the lis&t from $1,200 to #1,500 or f1,800* Another suggestion advmneed i s tint mom ®0Qkm&m& should he &m±m& tm* ^Ivla the holdtnr of th» Tmturiag ijotoc a reosipt for tJ» aaawait of tsuces podd* TM» jtdght bo In the form of a stub fttt&ehed to the taoc not*s# ^d«h oo\dd be detMhsd, etaanped by the ooXleetorf tmd aidlod to the cnmsr of the notes* 3 3aoto@9 I t asms to me that the proposal ^iioh X «Ade aorao time ^ o for Issuing non-n«f*oti«iblo a©t«s having a S-year xaaturity sad paying sspdszBaa&X oo^oons st saaBual rates of l/u* 2/ 2 * 3/U# i L ^ X per oettt would be parefersJble* beeastse i t wcmXd meet mt oaly the issis<Siate problem of tax antloi* pation but also the larger problem of tapping idle deposits* The notea which 1 propose would be sold to investors other than eos*» i-sorcied hmkst vmsld be registered, viould be issued in deaoiaiHatiox» of |X,000 sad over, and would be redeemable on 30 day*1 notice. Provision sdfhfc also be inade for extending the maturity beyond 2 years* There i s no use having both the no^s idainh 1 propose »nd the Series B notes, since tWLs wmxld only add to the already large ausfeer of types of issues* The Series B notes are sot aseessary from the point of view of enabling tsa^aysrs to their tax r®q&iremnK&* this i s dom who would purchase Series B notes* larger tsj^>aysrs hm® substantial wmim%& of eash available, sot ^>nly as reserves for te« imysnsnts but for other ptar* poses as well* Ths plan whioh I jaropose, therefore# nould tap not ~ 2 - June only tba tax reserves but large additional sums of i»©»»y» This proposal would be better than the issuance of additional b i l l s , booause the b i l l s mould go largely to banks, while the speeial issue would aot« An advAata^e of the proposed eenuritles cnrnr Series. 3 notes i s that the interest that the Tr*&mxry would pay wcmld be smaller, ex&&p% where tJi© not#e were held for the entire 2 years* Another ad* •vantage i s that the holders, furt$*ersiore, night well fi»d that they have sufficient oaah when 5nm#m taxes are due to pay tbo taxes out of eash balsnees rather than to turn in the notes. In this way there would be a eomta&t increase in substantial holdings of noivnegotiable Goveraaeat seouritie^ and a oorraspondixig deerease in tiie need for openH^arlPit is sties* IMP/tBO
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