Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-22
payment ON DEBT
FUND IS DEBATED
Proposed Suspension Of U. S.
Deposits Has Supporters
and Opponents.
BY cHARLEs 2. aPKARK.

Special Dispatch 70 1ne star. $3.50.
NEW YORK, November 12.--Thnre
are two points Of view among members
Of Congress and students Of Govern
ment finance on the proposal 70 dis
continue sinking fund pAynenss on the
national debt in order TO carry through
. period when q substantial Treasury
dellcit n anticipated. 80
original provinlons for debt reduction
~ ainking fund operations should not
b disturbed and that the expected
deficit ahOuld be met either b. further
Government economies or hY the iaap.
ance OF short tenn Treasury cartin,
Gates. The latter method would be un.
usual Tor u r. many years since The
United States Government has had 10
meet . situation ct the end Of ia tiscAl
ton. -
Rapid Rednetlsn Of Debl 4,
The other argument Il that, e The
Government debt has been reduced
much more rapidly than provided for
under the law Of 10 years aRo' IRE
present Treasury emergency should 10
met BY O reduction in the sinking fund
operation, and also that, ct d time whAn
personal incomes and tlaoae OF corpora
tons are seriously cut into, tlAe fe.
auction allowed on income taxes raid
this year should be permitted 20 stand.
The extent TO which car national bor-
rowing has been reduced since the war
has astonished all other countries, Ti1e
debt was ct It's maximum In August.
1919, when tt amounted 70 o1o.JeA.-
207,e7o. On October 81, this year, ere
Treasury statement Indicated that TIE
total ercss debt Of the United states
then was 4i6i7e.esT, $50 In q iittle
more than IL years, therefore. the debe
O00, 900, or about 20 per cent. Tnia had
resulted IN o decrease IN the annual
carrying charges on thA ccuntey'B
fnterest-bearing debt from a., lOe ,ooO. 1bA
% about $3.50, 900, 900, or IS per cent.
In the fiscal year 1879 the debt ~
duction was over S673,O00.00o A. the
gross debt On june 80, 1870, Was
ei6.e31, 49, IA, It b apparent that n
the rs months TO October 81, thie year,
been eliminated and that the process
OF debt reduction has bsen auinG On at
rapid rate. in spite Of the increasing
Treasury, deficit due to o falling or N
income tax payments and in custCns
Lattsriy the percentage Of decrease IN
the carrying costs Of the national debt
has been greater than that Ia the pF5n.
cipal Of the debt, owing 10 the steady
refunding Of high-coupon, shnft -terTa
Treasury notes which Secretary Mellon
was compelled TO issue during the period
Of tight money.
Not . little Of this years bcgrowina
has been done through the agency al
discount bills sold on less ta1anEa 4 per
cent basis.
OutstAiDaine Lean&
The highest coupon Government 4.
sues outstanding today are the AZ per
cent Liberty Bonds and the az p0P
cent Treasury notes. The lowest c0ufon
bearing Treasury certificates tn any
considerable amount are the AZ per
cents which mature ia September. 1881.
AZ this time, q year ago, Treasury Ger.
tincates aggregating $3.50 100000 and
averaging per cent interest were be-
Ing carried In the Governments debt
within the next few months IN.
Treasury win have to taxa up el6S ,sli,s
600 3Z per cent certificates and HfO2,.
500, 900 bills. with interest rates A.
their present low level a1ld An treatie-
ned demand from the institutions for
the highest Grade paper that they can
obtain, regardless Of the rate az return
on It, - ~ not unlikely that the rof1nal1c.
ing Of these amounts VII Be aeoon.
plished ct . considerable net eaS1sag A
interest charges 20 the Government.
tCopyriaAt. 1s8al