Evening star., 1933-06-07
IWoodin Addresses Invitation
Mainly to Small Holders
of Capital.
FIGURE is EXPECTED
TO BE REACHED EASILY
Refnancing of Fourth Liberty
Bonds Studied, but No Immediate
Decision Seems Likely.
BY the Associated Press

By the Associated Press.
Tie Treasury called on the public to-
day to lend the Government a billion
dollars to launch the big industrial re-
covery-public works program and meet
current financing needs.
The invitation for funds was directed
especially at small holders of capital
whom Secretary Woodin wants in as
partners" of the Government. To favor
these, he announced he was reserving
the right to accept all subscriptions of
$4,000 or less, even though they require
more than the total of securities offered.
Bids were called for on 800, 100000
or thereabouts" of five-year, 2B per cent
Treasury notes, whose proceeds will go
largely to the public works spending.
In addition, there was offered "$4OO,-
100000 or thereabouts" of month,
y per cent certificates. Customarily
issues are oversubscribed, and the bill
lion figure Is expected to be reached
with ease.
Normal Rate on New Issues.
Financing to be done with the new
funds includes paying off s374,000, 900
of maturing certificates and $104 900 900
interest on the public debt, due June Is.
The issues will bring Roosevelt ad-
ministration securities sales to S2,372,-
100000, since in March the Treasury
sold $800,000,000 worth and in April
added $572, ,000 The banking up
heaval in March compelled an interest
rate Of Az per cent on the nine-month
offerings of that month, but the new
securities are down to normal interest
rates. as were those of April.
The new notes are not subject to re-
demption before maturity date, June
is, 1888. Both issues are exempt from
any taxes but inheritance and estate
levies
While this financial enterprise was
being launched Treasury men were
working on the possibility of refinanc-
ing some or all of the outstanding S.
268, ,000, 900 worth of 4A fourth Liberty
bonds to divide up maturity dates and
reduce interest. No immediate decision,
however. appeared in prospect.
Gold Sale Plan Studied.
Also under study was plan to per-
init American gold producers to sell
their metal abroad to get the higher
prices available there through depreci-
alton Of the dollar. There is almost a
81 per gold ounce gain in dollar value
available now in London. On this, too,
later action was expected.
President Roosevelt discussed yester-
day with Senator Bone, Democrat, of
Washington, plans for conversion of the
nv1ft ffctn r II.
erty bonds into securities bearing lower
interest.
Refunding part of the 8,2o1 ,000, 900
long-term bonds now outstanding has
confronted the Government since the
first Liberty loans, bearing 31a per cent
interest, became callable a year ago
The first Liberties and converted 4 and
2l5, 400.
The fourth Liberty 4H per cent bonds,
however, cannot be called until next
April, as the Government must give six
months notice on an interest date, the
next falling on october Is. They could
have been called next October had the
notice been given last April.
Early Refunding Urged.
The fourth Liberties, the most popu-
lar and the largest of all wartime bond
issues, under ordinary circumstances
would mature in 1888. while the first
Liberties do not mature until 1947. To
have the whole issue Of fourth Liberties
confront the Government for refunding
at one time, even four years hence,
might prove embarrassing. and financial
interests have urged that part of them
be refunded before the due date.
Plans were laid more than two years
ago to refund part of the outstanding
bonds, but were dropped when Con-
gress authorized payment Of 1000,-
100000 of the World War veterans
bonuses. Then business conditions went
into the doldrums and though money
rates were down it was felt any large
issue OF long-term bonds might further
depress the market.
Lately, however, conditions have
seemed to improve for floating a siz-
able issue of long-term securities.
Financial experts say this would be
done for only two reasons: First, to
save money through lower interest
rates, and, second, to prevent the en-
tire issue falling due at one time.
Saving Is Uncertain.
Just how much money could be
saved in a refunding issue is uncer-
tain depending upon the size of the
issue, the kind and length Of its ma
turity If 1t were a purely investment
bond, it was regarded likely that if con-
ditions were as at present the Govern
ment would possibly have to pay as
much as 37s per cent for its money,
thus saving % per cent interest.
On the other hand if they were cur
rency bonds-that is, carrying the
privilege of being deposited with the
Treasury by national banks to back ad-
ditional currercy-it is figured the Gov
ernment might be able to float an issue
at 3A per cent interest or at saving
of rs per cent.
This would save approximately Sill
250,000 on each billion dollars worth
issued. Whether the currency privilege
will continue to exert its influence on
bonds also is considered problematical.
Under the present law any Govern
ment security bearing less than 3$ per
cent interest may be deposited by ma
tional banks as backing for an equiva-
lent amount of national bank currency.
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