Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-14

clear. There is at present outstanding
short-terrn debt of approximately
81, 800 100000, which, under existing
circumstances, is already toe large. Or
March is next $l,l09, 000, 900 of old OBJ.
Iiga ate MS mi mature. In june. 1899
bonds become callable. of which $780,.
100000 bear 4A per cent interest. Ir
october, 1888. $6,268, 0000 of Fourth
Liberty loan 4A per cent bonds become
callable.
Irrespective Of the desirability of re-
firing the S536,000,000 First Liberty
loan 4K4 per cent bonds and the $6,268,
100000 Of Fourth AZ per cent Liberty
loan bonds because of the high inter.
est rate they bear, 1t Is obvious that
refunding operations must be under
taken in 1888, since it is unthinkable
that $6,268, 000, 900 of obligations should
be allowed to mature in the single year
1888. 1t Is evident, therefore, that i'm
portant refunding operations must be
undertaken both in the immediate and
the near future.
Big Short Term Debt.
On June 80 our short-term debt
amounted to something over $1,000
100000. At that time it was reasonable
to anticipate that ordinary debt retire.
ments through sinking fund, foreign re-
payments and other smaller amounts
would permit the reduction of the short
term debt by about 81 SOC, 900, 900 in the
three-year period ending June 80, 1898
Present indications are that there will
be no decrease in the public debt, but
rather an increase this fiscal year, and
very material cut in the estimated
debt retirement figures for 1882 and
1888. So that in the three-year period
the public debt will be reduced by prob
ably not more than 100000, 900 or
$500, 100000, leaving a short-term debt
outstanding on June 30, 1888, of ap-
proximately $2,200,000,000.
This Is altogether too large an amount
in view of the necessity of making pro-
vision for the Fourth Liberty loan bonds
in October, 1888. At least a billion
dollars should be refunded some time
before that date If to this be added
$500 ,000,0 900 or more required for loans
on adjusted service certificates, it be-
comes apparent. that, leaving out of
consideration the first AZ per cent
Liberty loan bonds, it will become neces-
sary to undertake in the course of the
next % months, exclusive of those of
March is next, refunding operations to
the extent of 81 ZOO, 900, 900 and, in
addition, to raise 100000 900, more or
less, Of new money, which, directly or
indirectly, must be obtained through
the medium Of long-term securities.
One Months Offering.
Coming to- the operations that must
be conducted next March, If the
Treasury is obliged to borrow $500 ,0O0,-
600 to take care of the potential loans
that may have to be made until the
June quarter day, the Treasury will be
obliged to offer billion and a half of
securities in single month, of which
81, 100 ,000,0 900 will be of a refunding
character and 10000, 900 will have to
be sold to new buyers to obtain addi-
tional funds.
The Treasury wishes earnestly to call
attention of the committee to the cumu-
lative effect of all these factors which
make the problem of current financing
extraordinarily difficult, particularly in
view Of the desirability of the Govern
ment's not making too great demands
upon the investment market at this
time. regret that cannot, in view of
the situation explained above, approve
of the Treasury assuming the obliga-
tons imposed by this bill
cannot too urgently recommend that
this measure should have reconsider
alton in order that it should be placed
upon basis which will not damage our
whole financial position.