Evening star., 1933-03-30
NEW GOVERNMENT
LOANS DISCUSSED
Treasury Must Soon Decide
on Revenue-Raising
Program.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, March 30.-The delay
by the Treasury in formulating a pro-
gram to deal with the great volume Of
short-term loans maturing this year
and in setting up q plan whereby
popular Government issue might be
floated is said to be due to the in
Vulnerable problems that Secretary
Woodin and his assistants must deal
with Immediately. 1t is also affected
by the present firm rates for money,
which may be expected to give way
with the return Of bank deposits during
the Spring.
In Government bond circles it is be-
lieved that the first announcement of
the Treasury concerning its financial
program will be MADE in about two
weeks and that the next Offering will
be dated April Is. This is expected to
take the form Of 9 and IL month notes
and possibly reach $1,000 100000. 1t
will provide for early maturities and
also supply the Government with the
funds necessary to initiate the various
relief programs that then will have
been enacted into law.
Investors Attitude.
The larger problem. and the one
that the Treasury officials and dealers
in Government bonds have constantly
in mind, has to do with the flotation
OF public loan. Those who have
sounded the market for such an issue
are convinced that the time is ripe to
make at least an attempt at one OF
this character, even if the amount in
volved is of moderatae size. They find
large numbers of investors willing, for
the first time in years, to subscribe to
q popular Government loan not only
because they now wish to assist the
Government just as they have helped
the banks since the holiday by deposit
ing long withheld funds, but to attain
the highest form of investment pos
sible in this country at an attractive
rate of interest.
Some of these who have been in
Clined to defer the offering of such a
loan take the position that it should
be of large proportions say $5,000,000,-
900, and that conditions are not yet
satisfactory for making an offering OF
such an amount; that to do so might
risk the success of it. The other view
is that it would be advisable to make a
test of the absorbing capacity OF the
public to such a loan with an issue
not to exceed $1,000 900 900. If the
justified it. the Treasury could proceed
at once with second loan of similar
character.
In spite of the heavy return of bank
deposits, the figures of money in circu-
lation indicate that there is still a vast
amount of currency in hiding and that
it will come out slowly unless it has an
inducement in the form of an abso-
lutte security and a rate of interest suf
frtn ly inl RI
tial loss of income on funds unem-
ployed With most of the large mutual
savings banks reducing their rate of in
terest on April l to 3 per cent, and
other banks taking the same position, it
Is confidently held that the Govern
ment could distribute $1,000,000, 900
or more Immediately, in moderate
amounts, to individual investors at a
coupon rate of 3l2 per cent. 1t would
nary to the offering. to set up an organ
1zation similar to that which had such
great success IN placing Liberty bonds
with the public during the war.
Would Balance Note Position.
There is little doubt, in the light of
the tremendous response by the public
to President Roosevelt's radio speech OF
March IL on the banking situation, that
an appeal Dy MN IN the same manner
for support of Government bond issue
would bring in thousands of subscrip-
tions from all sections of the country.
No attempt has been made since the
war to popularize United States Gov
ernment bonds. The banks and other
financial institutions, as well as cor
porationS that wish to be in liquid
condition, have practically monopoliZed
the market for Government loans.
Recently they. together with the Fed
eral Reserve banks, held about so per
cent of the entire Government debt.
From every standpoint this is the psy-
Geological time to promote popular
loan. The need of it as first step
in readjusting an overbalanced short
term Treasury note position by a sue
cession of long-term bonds is apparent