310 THE WORK OF THE STOCK EXCHANGE

a whole. Moreover, there has been an ominous decline in the
outstanding amounts of open-market paper or securities now
eligible for rediscount; the commercial paper business has been
slowly drying up as companies have been obtaining their working
 capital from new security issues, the rapid reduction of our
national debt has reduced and threatens further to reduce the
Reserve’s dealings in U. S. Government securities or the
collateral loans based upon them; and the bill market in
New York seems likely to grow only gradually in accord with
the increase in our foreign trade. ‘The price of over-limitation
of eligibility for rediscount, if these tendencies continue, is
bound to be an increasing limitation upon the power, importance
 and prestige of the Federal Reserve system. It seems
likely that the technique of rediscounting security loans so as
to prevent the undue or inflationary employment of Reserve
credit in the stock market, or interference with flexibility of
the note issue, could be mastered by Reserve authorities if they
were permitted by Congress to undertake it.