Evening star., 1924-09-22
j. s. MAY RETIRE
DEBT IN 25 YEARS
Bankers Asked to Aid Plan by
Encouraging Public to Hold
Federal Bonds.
BY the Associated Press.

CLEVELAND, September 22.-Com
plete retirement of the gigantic pub
lie debt of the United States in the
next 25 years is now contemplated
by the Treasury.
Federal fiscal affairs have reached
the stage, Assistant Secretary Dewey
Of the Treasury disclosed in state
ment prepared for delivery at the
annual convention of the Investment
Bankers Association today, where the
Treasury has been warranted in
ma piping out a program contempla ting
the wipinG out Of the entire debt, now
about twenty-one and one-haf billions,
in the next quarter of a century.
To put through such a program
however, Mr.. Dewey said, the Treas
ury must have the full cooperation
of all. He told the investment bank
ers that any effort to interfere Sc
riously with the present wide market
for Government securities would up
set the plan and he urged them to
aid in combating any movement that
would result in the trading off by
their holders of the Government Sc
curities.
Great Interest Payment.
Pointing out that the Government
has had to pay approximately one
billion dollars a year-almost one
fourth of its entire expenditure-in
interest on its public debt, the AS
sistant Secretary declared that out
lay must be reduced if material tax
reduction is to be an acComplished
fact.
1t is with view to this situa-
tion," he said that the Treasury has
mapped out program looking to
the ultimate retirement of the public
debt in about twenty-five years.
Through the use of the sinking fund
and other known sources of reve-
nues. this can be accomplished. pro-
vlded we maintain the popularity of
Government securities.
But it is absolutely necessary, if
this program is to be successfully
carried out. that the Government
should be able to sell its securities
at low rate OF interest and conduct
it's vast refunding operations under
favorable circumstances without un-
due disturbances of market condi-
tions. 1t will seriously interfere with
this program if successful effor,
is made to dislodge Government Sc
curitieS from the hands of their pres
ent holders"
RefundinE In Prospect.
Mr.. Dewey said that inasmuch as
about eight billion dollars in Gov
eminent securities mature during the
next four years, practically IS pei
cent of which will have to be re-
funded, the Treasury will continue
to be involved for some years in the
later phases of wartime financing
The effect of any movement to
divert Government bond holdings to
Industrial investment, he warned the
bankers, would be to force down the
quotation of Government securities
and compel the Treasury-and the
taxpayers-to pay a higher rate Of
interest on its new issues.
Those formerly holding Govern
ment securities" he added, would
be unable to trade the maturing OBJ
legations for new issues offered by
the Government and the Treasury
would have to look elsewhere for
customers for its bonds"
AS another reason against the dis
Judgement of Government securities
from their present hands, Mr.. Dewey
said that in many cases the conf
dence of investors would be impaired
through highly speculative invest
ments which might not yield returns.
Legitimate operators would not en-
courage such exchanges, he be-
ieved.