Evening star., 1923-05-07
SS4llD,OD0,0(O NOTE
ISSUE ANNOUNCED
Sale of New Securities to Pay
off Last Series of Victory
Loan Paper.

For rcfundinE the last series of VIC
tory notes maturing May 30 the
Treasury announced last night Il new
offering of $500 900, 900 in 4al per cent
Treasury notes, which virtually conf
rletes the first phase of the refinanr-
ing of the governments war-ttm"
debt
In announcing the new note issue
which will mature March 10. 1927.
Secretary Mellon declared in a state
ment that at the present outlook all
Of tho remaining short-term debt
might be retired gradually from sur
plus revenues of the government
prior to 1928. Thus the heavy re-
financing necessary in connection
with the maturity that year of the
third liberty loan would be left un-
embarrassed by other government
borrowing in the interim.
Sees Cut in Debt.
Mr.. Mellon estimated that the gross
public debt of the nation would be
cut to about S22,i00.0 900. 900 by the
"nd OF the fiscal year. or approximate
l. $4,000 600 less than the total
On April 80, 1921. and also predicted
a Treasury surplus then of Sl65,00d.
600. This is $65.000.000 more than
the forecast made the day before by
Director of the Budget Lord.
Announcement of the new note Of
ferinG with its rate of 4a4 per cent
interest is in line with the Treasury
policy. noted throughout its postwar
financing thus far excepting the is
sue of thirty-year bonds last fall. of
Tefundiug such Of its mtturitieS as
Necessary into short term ohlisa-
tionS This program. inauSurated
two years ago. contemplated a grad
ual retirement ahead Of the first big
wartime issue of such obligations
over the interim between that and
the maturity of the third loan of all
debt that had to be refinanced.
Meets Good Results.
This has met with encouraging re
suits, Mr. Mellon said. adding that at
NO time has the federal fiscal opera
ti"ns disturbed industry and business.
The Treasury Secretary aScribed
success Of the effort to rigid ad-
herence to the policy of balancing the
budget as nearly as possible from
year In year.
The surplus. estimated for this
fiscal wear at SIPS 900. 900. automatic
ally is applied TO retirement of the
debt under the policy of the Treasury
now in effect and. providing the re-
ceiptS from internal revenue and
customs duties continue at the pres
larger amounts may be applied to the
purchase of interest bearing Securi-
ties The Treasury, however. is hold
inc fast to the plan Of counting only
such amounts as appear reasonably
assured
Give Five Days Interest.
The new offering of notes, maturing
IN three years and ten months, was
announced to total 100000. 600. but
provision has been made by the Treas
ury to accept such additional amounts
above that figure as may be repre-
srnted by exchanges of the old for
the new securities. The statement eX-
plained that interest to maturity
would he allowed on the victory notes
which have not been called and which
do not mature until May 20. Five
days interest therefore is accorded
holders of victories who convert them
into the new Treasury notes. which
Will be issued in denominations OF
slno. $500. $1,000. $4,000, $4,000 and
500. 900 with interest coupons at
tached.
There are still outstanding an ag
gregate of SS30,000.000 in called and
uncalled victory notes. OF these $b3.-
900 900 is i'll notes which were called
for. redemption December Is. and on
which interest has ceased. The offer
ing of 100000 in new securities.
therefore. seems TO contemplate the
exchange of about an equal amount
sold for cash. although no indication
was given as to the Treasurys view
Of the amount of securities which Will
he offered in exchange.
If the combination of amounts OF
sales and exchanges do not equal the
total retirement value of the out
standing victory notes. the difference
will have to come from the Treasury
general fund. which has been carry
ing around $500. 100000. The Treasury
appeared to figure, however, that
there would be enough exchanges Of
fered that only a small call would be
made on the general fund, for the
formal statement explained that it
was expected there would be Suffi-
cieut money left in the general fund
To meet current expenditures until
.lIne 10
ON that date. the statement said.
another quarterly offering of Treas
ury certificates will have to be made.
but this probably will be on a moder-
'ate scale, inaSmuch as a tax payment
is due on that date to help bear the
governments expenses. The issue an
nounced last night, therefore. ConSti-
tuteS the last important piece of
financing for the current fiscal year
and for all practical purposes COM
pletes the financing of the victory
loan.