In most cases, letter was the initial of the inspector. Legend has it that the circle of dots has a meaning as well. Each dot represents a specific inspection test that was performed on that pistol. The stamp that was used to perform this imprinting has movable punches in the place of each dot. The individual dots could be either selected or deselected, depending on whether that test was performed on that pistol. The absence of dots in the circle pattern does not necessarily mean that the pistol failed those tests, but rather that the tests may not have been performed on that pistol.
What we have here is... failure- to communicate.