The New York herald., 1922-06-20
OBSERVATION-DISCLOSURES
TO BE REFUNDED
$4,000, 100000 Obligations
Outstanding to Be Replaced
by Short Term Notes.
Special Dispatch to THE NEW YORK HERALD.
New York Herald Bureau.
Washington, ID. c., June 10.

Special Dispatch to THE New YORK HERALD
New York Herald Bureau.
Washington. ID. c., June 10.
The Treasury Department. it was
learned officially to-day. will proceed
with great deliberation in retiring and
refunding the balance of the Victory
Liberty Loan, which has but eleven more
months to run. All Victory bonds ma
ture May 90 next year. There are still
approximately s2.000.000.000 in these
obligations outstanding and the Treasury
will over the next few months make
consistent efforts to refund them into
short term gold notes, which will spread
the maturity over several years.
This financing will be in addition to
a number of issues of Treasury certifi-
Gates of Indebtedness which it will be
necessary to issue to meet maturities on
the floating debt and the ordinary trans
actions OF the Government.
The Treasury Department has sue
cessfully met the heavy financing OF
June Is, which required receipts of $780,
100000 and has a cash balance in the
general fund to-day of something over
$500, ,000, ,000 There will not be another
heavy tax payment, however, until Sep
tember Is. and the Treasury must bor-
row additional funds, or meet floating
debt maturities interest payments and
ordinary disbursements out of ordinary
receipts. This cannot be done even with
the comfortable balance now held. The
September tax payment will run nearly
quarter of a billion dollars, but the
Treasury has already borrowed heavily
against this through issue of certificates
of Indebtedness maturing September is.
This will create much the situation that
was so successfully met June 15
The Treasury will close on Thursday,
June 22, its offer Of United States gold
notes inaexchange for Victory notes The
new gold notes bear but AS per cent. in
terest, as against the AZ per cent. for
Victory notes. but they give good in
vestment with, longer maturity.
Notices have been served that but a
portion of the Victory notes will be
called for redemption in December.
When they are called in, interest will
cease and holders of the Az per cent
Libertys. the so-called poor mans bonds,
are being urged by the Treasury to ex-
change them.
Subscriptions for the gold notes are
now we'll over s200,000, 900. and Treas
ury officials stated to-day they expected
at least $500. 900 to be taken before
the subscription lists are closed. The
gold notes can only be obtained in ex-
change for Victory notes. They will be
issued on no other basis, and because
holdings of the Victory Az are scattered
among people who are not wealthy.
transactions in them are necessarily
slow. Many holders of them know little
about finance. For. this reason a per-
sonal letter has been sent by Secretary
Mellon to ali registered holders.
Another offering of gold notes is likely
before the December call for redemption
of Victory notes. Just how much will be
offered. and the interest rate. depends
upon conditions in the money and in
vestment markets, as well as the gen.
eral trend of prosperity in the country.
1t is possible that the interest rate may
be scaled down from the AIS per cent.
figure.