Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-01
FINANCING
|NTR|GUES STREET
Belief Is Held Treasury De-
partment viii Seek
$500, 600, 900 Loan.
BY DONALD C. BoLLEs.

NEW YORK. February 2s RO.-Just
how Uncle Sam is going to arrange to
meet unforeseen demands on a debated
wallet is q question Of intriguing interest
to Wall street. where he comes Just like
any other big business man when he
wants to borrow money.
The unusual interest that surrounds
the plans Of the Treasury Department
for financing the soldiers bonus and
other operations is explained by the
prospect that for the first time since
1928 the Government may expand its
long-term debt and float bond issue.
AS preferred customer with credit
rating par excellence that is the envy
Of all the world, there is no doubt that
whatever the Governments needs they
will be quickly met. The street has
been q little apprehensive as to what
effect the financing will have on the
bond market at a time when business
and industry look to it to lead the
country out Of the valley Of depression
This has cramped new finacing of all
kinds through the offering Of new
y
only about $3.50 100000 is the lowest for
this month in flve years.
$500, 100000 Loan Seen.
Some light will be thrown on the
Treasury'S plans on Monday when for
NAL announcement of its March financ-
ing operations will be made. The Street
appears to have agreed the Treasury
will seek $500, 100000 new money, in
a14 30 - M
issue Of 32 per cent notes which 1t
called for payment far In advance of
maturity.
Since the Governments short-term
debt amounts to approximately $780,
100000, and the Treasury faces a heavy
strain two years hence in handling huge
Liberty loan issues which become call
able, good policy dictates that this huge
short-term debt be reduced instead of
enlarged
That fact, coupled with the prospect
the Government will probably fail to
the extent Of $500, 000, 900 to make both
ends meet in the current fiscal year.
together with the millions needed for
meeting loans to veterans, variously es-
timated between $500 ,0OO, 900 and
81 ,000, O00, 900, leads bankers to conclude
q large long-term bond issue Is inevi-
table.
Bankers Views Differ.
While agreeing in a general way on
what the Treasury Department is likely
to do, bankers here hold divergent views
as 10 the manner in which the Govern
ment will take advantage of the long
and short term credit markets. It Is
held by some it may offer an indeter-
inmate amount Of bonds maturing in
from IL to IS years, with 312 per cent
coupon in exchange for the called 3h
per cent notes.
In this manner the short-term debt
would be greatly reduced and the adj
ditional money needed to meet the
soldiers bonus would be raised through
large issue OF certificates of indebted
ness. Another suggestion has been that
the Treasury would refund the notes
with similar issue, and float a $780,
100000 bond issue with coupon of
around ga per cent.
Normally Government financing is
handled by the banks and other insti-
buttons with a huge reserve of funds to
invest, and 1t Is quite possible, bankers
say, the Treasury will be able to raise
the additional funds without disturbing
the capital market. The most SAN
guine believe that once the uncertainty
is removed. the bond market may re-
sumo Its rise, halted a few weeks ago
by the soldiers bonus agitation, and en-
able business and industry to obtain
new money and accelerate the recovery
which economists believe is on the hori-
ION. 1t is pointed out the soldiers
bonus money will fiow quickly into trade,
with . temporarily stimulating effect.