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1027 FEDERAL RESERVE BOARD WASHINGTON November $_,lg20. Subject: X--2054 Broadening of Market for Bankers' Acceptances* Dear S i r : During the past f i v e years the Federal Reserve Banks have been called upon t o carry that portion of the increasing volume of bankers' acceptances which has not been absorbed by the discount market, The f a c t that, with the increase i n the volume of bankers' acceptances, the Federal Reserve Banks have not been called upon t o carry an even larger amount, i s evidence of the better distribution of b i l l s and of the broadening of the discount market. The strength of t h i s market l i e s i n i t s breadth, that i s , i n the number of i n s t i t u t i o n s of individuals forming the habit of purchasing bankers' acceptances. The Board f e e l s that the development of the broddest possible market for bankers' acceptances i s of v i t a l i n t e r s s t to the e f f e c t i v e functioning of the Federal Reserve Banks> and that t h i s w i l l be increasingly so a s international movements of credit approach the freedom of flow which obtained before the war. With r a t e s f o r b i l l s at the high l e v e l s now prevailing, the Board f e e l s that the present opportunity i s most favorable for i n t e r e s t i n g the widest p o s s i b l e c i r c l e of buyers and i t b e l i e v e s that the influence of the Federal Reserve Banks, in t h e i r respective D i s t r i c t s , might appropriately be used to bring about a more general d i s t r i b u t i o n of b i l l s . The Board requests that you furnish i t with any information you may have a s t o the extent t o which bankers, investors and others i n your D i s t r i c t are now purchasing bankers' acceptances, and advise a l s o to what extent your Bank has been able to a s s i s t i n awakening an i n t e r e s t i n b i l l s among such purchasers. The Board would be pleased t o have your views as to what can be done to a s s i s t further development of s a l e s of bankers' acceptances within your D i s t r i c t , To Chairmen Very truly yours, Governor. of a l l F.R. Banks.
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