The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-02-18

| Mr.. Treadway: And without very
much success in the stabllizing feature
because the bonds are pretty low right
now."
Mr.. Meyer: at has been successful
to the extent that the amount has made
the market steadier than 1t otherwise
| would have BEEN"
Mr.. Treadway: was there marked
onering for sale just at the close of the
Year,"
Increase I'm December.
| Mr.. Meyer: There was a very con-
siderable increase in the month of De-
| cember over any month before or since"
Mr.. Treadway: Then there is evil
| dence IL was used in that manner to
AFFECT the amount OF the income taxes
| which large holders would have to pay.
| Was there a similar purchase In the
open market In the following month--ln
January--an indication of buying back
the same bonds?"
| Mr.. Meyer; There was some con-
siderable abatement of the sales 1t Is
dificult to say TO what II was due or
that It was due to sales that would re-
suit In Income taxes because the armi-
| stice itself occurring as II did in Novem-
Der was a very legitimate reason for
some people making sales on account Of
results proceeding from the armistice.''
| Mr.. Moore-"What would he our in
terest rate per annum IL this bill should
pass
Mr.. Leffingwen: "If the interest rate
were ~ per cent, say, and you had a
sinking fund of az altogether that
would make 6& per cent. think that
four billions per annum would include
the interest charge and the sinking fund
after deducting tho interest received
from foreign loans"
| Mr.. Moore: 1--WE are receiving that
regularly. are weT'
| Mr.. Leffingwell: Yes, regularly The
net interest and sinking fund charge
would be very much less than $1,000
| 100000 year. The sinking fund on
SIS. 000. 900, 900. which is assumed would
be the net amount Of the public debt. a
cumulative sinking fund at gag per
cent. (Which would exactly speaking be
required to retire the debt In twenty five
years as calculated) will amount to
s417.s61.532."
| Mr.. Moore: Per annum?"
| Hypothetical Estimate.
Mr.. Leffingwell: Per annum II you
| assume that the funded debt will reach
a total of $4,000. o0o, ooo-I am Just
making an assumption and not an esti-
| Hldte-dHu assume tne foreign loans VIII
| amount to $4,000, 900. 900 and that also
is an assumption. you will have a net
debt OF $4,000. 900. 900. The interest on
$4,000, 900. 900 at AZ per cent. would be
s765, DOC, 900 per annum and $417 900. 900
for sinking fund. making total of about
81. 200 .000, 000'
Mr. Moore Now then, II our ex-
penses to run the Government are about
$4,000, 900. 900 we know that we have to
include that charge of $1,000 900, 900 for
interest?
Mr. Ieffingwell: About 1900, 900. 900
could safely he included in that 81 ,000,-
900, 900. No one contemplates $4,000
000, 900 per annum TO run the Govern
ment on r. peace basis unless allowing
for interest"
Mr.. Moore "In the last analysis that
must be raised by taxation in one form
or another"
Mr.. Garner (Tex.) May I ask a
question about the probable expenditures
for 1920; are you able to give any fig-
ures on that?"
Secretary Glass: mo, Mr.. Garner /
have asked all the departments urgently
to give me estimates but have not been
able to get them"
Mr.. Garner while Il is not particu.
larly your province to call attention to
economic conditions, or at least to con-
| OF tne government, Is De-
ginning to assume an alarming point
to me. I am frank to say do not not
know where we are going, but do not
believe you can continue to sell a year
Ifrom now bonds to the extent OF &c.
900, 100000 to $4,000, 100000 a year
with the bonds We already have out
standing"
Must Appeal to Patriotism.
| Secretary Glass: "You could not do
IL now as an investment proposition.
That is what have been trying to con-
vince the bankers who talked about APP
preaching the subject in a cold blooded
. business way. You have to appeal TO
the patriotic impulses OF the country and
not merely on an investment PROPOSE
ton beca use there Is not sufficient de-
mand for bonds at a rational rate of
interest to make 1t possible TO place
them solely on investment basis"
Mr.. Garner Suppose we were driven
to the point where we have got to have
some money, what effect is that going TO
. have on business IL the United States
Is going into the market each year for
s., 000. 000, 900 credit for two or three
years?"
Mr. Glass I'VE hope We are not goins
to do that. We hope we are over the
hill now and are going down"
Mr. Garner. III you issue to the full
extent of the s25, ooo.oo0.oo authorized
in this bill in bonds and the ex-
: penditures go to $4,000, 900, 900 next
year and 81, 900 900 900 of taxes It only
: takes an adding machine to show you
have to have from four to six billion:
next year in order to run the Govern.
; ment."
E Secretary Glass: IT had in my offics
some days ago a committee OF bankers
and manufacturers who are insisting
your new tax bill is going to raiss
= $40, 900. 600. 900"
g Mr.. Garner: The only thing I In
= dulge is the hope that they are perfectly
y correct"
Mr.. Moore; THAT is the way the,
feel about IT,"
Mr.. Garner: IT want to say feel 4
q was a very grave mistake which wa.
made by Secretary McAdoo and tn,
President when they suggested reducing
the amount from $4,000. 900 to So,
), 900. 600, 900"
d Secretary Glass Disturbed.
q Secretary Glass: TT rather disturb
a my dreams to have anybody sugges
that Secretary McAdoo ever made an.
4 mistake. II he did l would begin t,
: wonder what will happen TO me-"
Mr.. Dickinson (Mo): 81 want to in
!, quire what In your judgment. II thi
lrcwer is given and this $40 00O, OOO. 00
!. 7 OF bonds at higher rate OF interest ar
U put on the market or issued will be tn
effect on the outstanding bonds at
: lower rate of interest now held by tn