The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1933-12-01
Use P.O. SAVINGS
u. S. Buys Its Own Bonds
to Keep Prices
Up
TAX BURDENS SEEN
Treasury Determined to
Pay Interest to
Bankers

The Roosevelt government
narrowly averted a crisis last
week by using funds from
from the Postal; Savings
Banks, the Farm Credit fund,
the Federal Deposit Insur-
ance fund, to buy up govern
ment bonds which are falling
rapidly in the Wall Street
market.
At the same time, Director of
the Budget Douglas warned that
new and heavier taxes" will be
levied against the people to sup
ply funds for the payment of in
tenest and principal on some %
billion dollars worth of govern
nent bonds held bv Wall Street
bankers.
The gold-buying manoexvers of
President Roosevelt have not
helped the United States govern
ment to ride over the world crisis
successfully, and last week saw
United States government bonds,
long regarded as strong as the
| rock of Gibraltar, begin to tobog-
gan downward. Rich bondholders
began unloading their bonds on
/ the market which drove the prices
> down still lower.
- To Cov6 RauIro~r =
ITO protect the credit of the
country" which means protecting
the investments of these bankers,
4 Acting Secretary of Treasury
t Morgenthau rushed into the mar
e ket with all the government funds
s available and began buying up
: these bonds in an effort to stop
f the downward drop in the prices.
e The savings Of city workers and
farmers deposited In the Postal
Savings banks were used. The
funds of the Farm Credit Admin
4 stration. intended for relief to
q mortgaged farmers, were next
a used. Towards the end of the
IS week. an upturn was noted, but
4. the buying by the government is
Il being continued to avoid a slide
te backward if possible.
u The government is determined
= to continue payments of Interest
and principal to the holders Of tht
% billion dollars of government
bonds.
70 There is very little chance, how
at ever, that the government can boil
Mt ster the bonds permanently. Tn
or policy of initiation which Rresiden
d Roosevelt is following-althougi
Of under the name of gold-buying-
will in all likelihood continue.
u anticipation of more initiation bon
# holders foresee a government
at credit crisis and will continue +
a unload their holdings. The Treas
urv department cannot continue t
buy bonds, even with tremendou
- tax burdens on the masses.
1t is believed that in order t
help the Treasury Department
weather the present storm tenn
n porarily, Roosevelt may call
II short halt to gold-buying initiation
u Afterwards, however, niue
= sleeper inflationary policy is Gel
tain.
Sale Tax Coming
The government is determined [
continue payments of interest an
principal to the holders of the
billion dollars of governmer
bonds. at the expense, of cours,
of the masses. Director of Budgt
Douglas has declared that the peC
pie must be willing to make
sacrifice" and Subject themselve
to increased taxation" A sale
tax will be proposed when con
gress convenes in January.
He hints at more "governmer
q economies" The reader will N
a member that by government ecOnC
q mics. the officials do not mea
cutting down expenditures for wa
preparations. On the contrary, .
means slashing more veterans o.
pension lists, or cutting the wage
of government clerks and en-
ployes.
The new crisis is accompanieI
he of course, by very optimistic stat
ments in the capitalist press. IT
I've Financial editor of the Associate
re, Press sends out an article, place
he on page of the big papers, whiC
claims that signs of returnir
- prosperity are more clear. Mr.
ee Administrator Johnson claims v
rst are "25 per cent recovered" Pres
asst dent Roosevelt from his whit,
MT quarters in Georgia, attacks ever
mt one who criticizes the New Deal
red "squawkens."
II