Evening star., 1922-06-25

dollars In orderly fashion. The total
gross debt has been cut down about
three and one-half billion from the
peak.
The government spent about half a
billion less during tho fiscal year now
closing than the spending depart
ments estimated In the beginning.
The budget has been arranged to
take care of the war debt along with
current expenditures, and, in spite OF
the speculative deficit of almost half
billion facing the country for the
coming hscal year, the prospects for
which are frankly declared to be mot
good. officials of the Treasury are
conhdent. They say that with the
budget definitely established on the
basis of paying not only running ex-
penseS, but of taking care of the war
debt, substantial progress in the busi-
ness or the country's finances may be
expected in the years ahead. But
there must be economy.
Outlined in Address.
B. P. Gilbert. jr,. undersecretary of
the Treasury. outlined the situation
in succinct and definite manner the
other day in an address on the war
debt, to the bankers down" in Maine.
The refunding plan, through which
the public debt is stretched out over
periods in such a way that the Treas
ury can handle IL without Throwing
undue strain on the financial world,
was laid before the bankers by Mr..
Gilbert as "a sound policy"
The effort of the government, said
Mr.. Gilbert, had been since the be-
ginning of the war Ito keep it's own
house in order, to maintain the gold
standard unimpaired and unrestricted.
10 finance the war on sound lines
through taxation and through the abb
nf oh co finy ne
out of savings, and after the cessa-
ton of hostilities to balance it's bud
get, current expenses against current
income, and, at the same time to carry
out a reasonable program for the
gradual liquidation and orderly fund
ing of the war debt.
This policy declared the under
secretary, 'the government has per-
sistently followed from the begin
ming of the war to this date, and, as
greatest war in history and through
the exceedingly difficult period of re-
adjustment which followed the war
with its credit not only unimpaired
but greatly improved. with the dollar
recognized as standard of value
throughout the world and with its
banking system in sound condition
to meet the peace time demands of
business and industry.
Foundation for Revival.
Thus there has been laid the foun-
dation for a healthful revival of busi-
ness in this country on normal
levels"
In planning to pay off the war debt,
Mr.. Gilbert said it had become clear
that the maturities of more than
$500 100000 which fell due within
two years after March 81, 1921, could
not be met by gradual retirement" but
that some program of orderly fund
ing had to be adopted in order to put
the short dated debt in manageable
shape and protect both the Treasury
and the financial markets of the
country against undue concentration
of public debt maturities."
A refunding policy was thereupon
adopted, announced by Secretary Mel
lon on April 80. 1921, he said, "to dis
tribute the shoft-dated debt over a
longer period of years, chiefly be-
tween the maturity of the victory
third liberty loan in 1928, and to do
this in such way as to spread the
matuTities of debt over the period In
manageable amounts that might be
taken up to some extent at least out
of surplus revenue receipts accruing
to the government in those years"
Following this program, Mr.. Gil
bert announced that five public offer
ings of Treasury notes had been
made, two for cash in June and Sep
change for AZ per cent victory notes
in February, 1922. and the other two
only in exchange for ~ per cent vic
tory notes. in March and June, 1922.
Every offering of notes." Mr.. Gill
bert asserted. has met with a hearty
able by this means to place about
$4,000 .00O, 900 of the early maturing
debt into more convenient maturities
and to reduce the victory loan to
manageable proportions. :
Tnx-Exempt. Series Cut. -
Further. it was added. the Treas
ury had taken advantage of its right
to call victory notes for redemption
before maturity and by calling all the
~ per cent notes for redemption on
June 15, it had entirely eliminated
that tax-exempt series. .-a.-.
In connection with the June Is Of
fering of Treasury notes, moreover,
1t was added, the Secretary has an
nounced his intention of calling for
redemption on December Is, 1929, a
substantial amount of the AZ per
cent victory notes still outstanding.
The policy of taking care Of the
war debt was declared by Mr. Gill
bert not only to be sound" but he
pointed out with official figures how
remarkable progress" had been
made over April 80, 1921, in retiring
that debt.
"Victory notes now outstanding"
he said, amount to only about two
billion dollars, as compared with
over four billion dollars at that time.
Treasury certificates aggregate about
1880, 100000, as compared with
about $2,750,Oo0.000. and war savings
certificates maturing or to be re-
deemed within the year amount to
about $650.000.000, as compared with
about $750.000.000 when the program
began to operate. There are now
outstanding, Of course, about $2,200.-
100000 of entirely new obligations
in the form of Treasury notes. but
these mature at various dates in the
years 1924. 1925 and 1926 and the
Treasury should, accordingly. be able
of them at maturity out of surplus
revenues or through secondary re-
funding operations, If necessary.
without undue strain to the financial
markets.
There still remains outstanding,
however" he added. about $4.500.-
100000 Of obligations maturing with.
which is In the form of victory
notes, and their refunding presents
a problem that will require the best
attention of the Treasury for prac-
tically the whole of the next fiscal
year"
S26,s96, 100000 Was Peak.
The country came through the
war, the undersecretary explained
with a gross public debt, at the high
point on August 81, 1919. of $26.5s6,-
100000, an increase Of almost s25.6oo'-
"This war debt, however" said Mr..
Gilbert. stood in quite different po-
sition than the debt which resulted
from the civil war, and from the out