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 work- 
ing 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, impor- 
tance 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.