Perth Amboy evening news., 1922-06-15

WASHINGTON, June 1.-THE
next twelve months will bring n
United States Treasury the most diff
icult financing job 1t has yet had
10 handle. In that brief period the
treasury must fund approximately
$4,000, 900, 900 in Indebtedness. in
other words, the United States gov
eminent must pay the equivalent OF
$50 to every man, woman and child
in the United States.
This is the governments biggest
financing job for the reason hat the
nation is at peace and the war pat
riotism which stimulated the Liberty
Loan drives between 1917 and 1919
is absent. The financing must be
done in a cool business way. There
will be no brass bands. no flaming
| Liberty Loan posters and no groups
| of volunteer workers to help handle
the problem. 1t must be done by a
handful of hard working officials
and clerks in the treasury depart
ment.
Slightly more than half of the vast
sum is needed to pay Outstanding
notes of the Victory Liberty Loan
1t will be recalled hat this, the asst
of the big war loans, vas a short
term loan of but four years and
that the four years will be up next
May. Before that time, the trea-
sury must also meet treasury certi-
ficates of Indebtedness and war saw
ings certificates to an amount which
will make up a total of approximate
ly five billion dollars.
The task will be accomplished,
not by paying off the whole amount
in fact, but by a shifting of credits
Ap1 ara1EFAra aTghGtn ptfa1 nor
ton will be paid off outright, but
some of this Indebtedness will be
met with new borrowings. in many
cases from the same persons. Thus,
a man holds $4,000 in Victory
notes. This year the treasury will
pay him in cash or will give him new
notes or bonds for ar equal amount.
He may take part payment IN cash
and part in new bonds. The same
method will be pursued in retiring
the whole $4,000, 900 900 to be paid
in the next year. If all Or a large
portion OF the present holders OF
the maturing securities want cash,
then other purchasers must be found
for the new securities in order to
provide the money to redeem the old
ones.
I But even considering that the
| treasury will borrow some new mo-
nev to pay this huge debt, the trans
action is in effect the same. A total
debt OF $4,000, 000, 900 must be met
in one way Dr. another.
The problem is especially delicate
just now because the government
cannot afford 10 pay so high = rate
| of interest as II did during the var
It must induce holders OF securl-
ties which now pay 4 IA per cent or
more to accept new securities pay
ing only 4 per cent or 4 IA per cent.
II the treasury begins bidding fran
ticallv for funds. the interest rate
will rise and taxes will have TO be
raised to meet the high interest
charges. Therefore, the financing
must be done smoothly and over as
long a series OF months as possible
so az TO create the least possible dis
turbence in the money market.
Business Demands Capital
Another important fact is that the
country is on the edge Of a boom.
Industries are reviving their activi-
| ties and this brings a demand for
new money. Private industries u.s.
ually are willing to pay higher in
terest rates thar the government
cares to pay and therefore there will
1 NC d ItuaCASJ AOA dtSSt $40
panies 10 bid the money away from
the government. There is no war
pressure now to bring to bear on the
citizen to induce him to forego priv
ate profits and put his money in gov
eminent bonds. The treasury must
go into the money market as a r
der and make the best deal 1t can.
A review OF the public financing
situation shows hat much progress
has been made since the armistice
in pairing down the public debt The
peak of the debt was reached on
August 81, 1919, when 1t stood at
500. 500, 900. 900 which is equivalent
to 1855 for every man, woman and
child in the United States. On March
81, 1922, the last date on which
a government financial statement
was issued, the debt stood at $23,-
100000 oo or sS,451, 100000 less
than the peak. That NEAR that
every person in the United States
has paid off s34 OF his Indebtedness
incurred on account Of the war,
Everyone still owes 1921.
Many persons who owned Liberty
| Bonds have felt some resentment
axainst the government IN the lass
two years because Of the deprecia-