The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-02-20
BABY Bonds
ARE BAIT FOR
boarded Cash
Denominations May Run as
Low as $50, in Drive
for Stacker Dollars.
BY RAY TUCKER
Times stan Correspondent

WASHINGTON, Feb. 2O.-Plans
for issuance of baby bonds" in
small denominations as another
means of extracting hoarded dollars
from socks and mattresses virtually
have been perfected by treasury
officials, it was learned today.
Although Representative F. H. La
Guardia Rep., N. " insists that all
future bonds of the new RECONSTRUCT
ton finance corporation should be Of
small denominations, the treasury
department does not contemplate
using this method of obtaining
funds as part of its regular
financing.
1t will be resorted to solely as a
method Of restoring confidence, and
present plans contemplate a COM
paratively small issue, though the
size has not been determined.
The bonds would be short-term
issues bearing low rate of inter-
est, possibly something less than
savings bank accounts pay. The de-
nominations will be as low as 500,
and may run as low as $50.
1t is estimated that boarded dol
lars amount to from $780, 100000
to $l,700,000,000, but there will be
no attempt to match this sum in
the proposed anti-hoardiug bond
issue.
After Stacker Dollars
1t is hoped that people will buy
these issues because of the conf
dence they have in government
bonds, and that this confidence will
become so contagious that it will
extend to securities bearing a high
er return, and regarded as a sound
investment.
The proposed friendly raid upon
boarded funds is simply part of the
general campaign to enlist Stacker"
dollars and credits.
The other parts of the plan are
the general campaign headed by Col
Frank Knox and the Glass-Steagall
bill, which is designed to loosen eli
gible paper now held in banks port
folios.
There is no intention of reviving
Liberty loan campaign methods, ac-
cording to treasury officials. The
bonds probably will be sold through
federal reserve banks in various
cities, and agencies established by
Colonel Knox may be used in some
communities.
To lessen the cost and inconveni-
ence of distribution and bookkeep-
ing, headquarters may be set up in
various cities where the public can
purchase the bonds without any per-
Sonal inconvenience.
Seek to Avoid Competition
Proceeds from sales would be left
in banks throughout the country,
thus furnishing those institutions
with cash which would keep them
in a liquid state. The purchaser
would be expected to hold his bonds
until maturity, or, in view of their
expected market ability, dispose Of
them to meet obligations.
In view of increased taxes facing
many citizens within the next few
YEARS, EuICIldoC VI bIlCoC oCCL14O1Co
may prove to be an easy way of
setting aside means with which to
make tax payments, as is done by
large corporations.
Deposits Of the proceeds in banks
may be necessary to offset possible
Withdrawals of deposits with which
to purchase these bonds. If pur-
chasers should buy the government
securities with money withdrawn
from banks, there would be no i'm
provement in the situation and pos
sibly no increase in the amount Of
money in circulation.
The interest rate will be placed
at a figure lower than savings
banks, to induce hoarders to place
their money in banking institutions.
Otherwise, the proposed issue would
become competitive rather than
helpful to the very structure it is
desired to strengthen.