Evening star., 1933-02-11
Special Dispatch to The Star.

NEW YORK, February 11.-F1gureS
recently compiled by the National In
dustria1 Conference Board for 1929 in
dicate that the interest bearing debt in
the United States, public and private,
| three years ago was approximately
| s155, ,000, ,00O, ,0o0 The service charge
each IL months on this debt Is $8,607,-
600 900.
An analysis Of domestic debt statis-
| tics shows that the average interest
rate on the debt is $50 per cent, or
slightly less than the prevailing legal
rate in many States. Splitting 1t up
into the different classes of debtors one
discovers that the interest charge of
! $12, ,224 100000 paid by farmers on their
debts is 6 per cent; that on individuals,
| including partnerships Is also 6 per
cent; on>State and local debts, 500 per
cent and >sl railroads, 4.50 per cent,
with the general average materially
affected by carrying charge on the
| Federal debt amounting to a trifle over
per cent.
Carrying Charges Mount.
| The total amount Of interest paid on
| all private and public debts in 1929
| was nearly eight and one-half times
| the prewar United States Government
debt. With the increase in this debt
this year to nearly $21, ,000, 900 900, the
| annual cost of carrying the obligations
of the United States - rapidly ap-
preaching point where 1t equals the
| principal Of the debt is years ago.
There has been a reduction in the debts
OF farmers In the past decade, but at
the same time an expansion of nearly
most 100 per cent In the borrowings of
States and municipalities. It is in these
last two items that the greatest respon-
sibility rests for the growth in the In
tereSt charges that are "gnawing away
| at u.s." and much of it has developed
| since the end of the panic In the early
| 1920s
One of the great problems facing the
| country at the present time Is to ef-
feet an easier situation for debtors.
| If we take per cent as the average
| age Of per cent, we have p cut In
i the cost Of borrowed money of 161s
per cent, or about the average reduc-
tion already made throughout the
country in the wages and salaries OF
those still employed. This degree of
interest reduction would cut the an
nual service costs of the farmers on
their debts by $4,000, 900. 1t would
| ease the cost to individuals Of carry
! ing their loans by $3.50, 100000 a year
| and to States and municipalities by
about $135, ,000, 900. It is estimated that
| if the United States Government could
obligations now outstanding at Az per
cent, a saving Of approximately $70.-
| 600 900 a year would be effected. This
| would bring the average interest rate
on all Government obligations down to
about 3.75 per cent.
Relief Bills Multiply.
Those portions Of the total interest
bearing debt In the United States on
! which 1t is hoped the greatest degree
of interest concession can be made are
| the borrowings Of farmers and Of indi-
viduals. They include, to consider
able extent, borrowings on farm prop
erty and urban real estate. The at
tack on the current interest rate by
Congress and by State Legislatures, as
| in cities and in towns, is becoming more
insistent. Each day sees some new bill
| in Congress to provide relief to debtors
who are paying what are believed to be
rates of interest beyond their present
capacity to pay and charges that are
out of harmony with going rates for
money In the leading financial centers.
The latest measure OF TINS klnd Is
that of Senator Hull, who proposes that
all future rates charged by the Re
construction Finance Corporation shall
not exceed per cent. This would COM
| pare with present rates for institutional
and corporation loans between 5 and 6
per cent. About one-fifth of the farm
mortgages are held by the Federal Land
| Banks and the Joint Stock Land Banks,
whose average charge to borrowers Is 6
per cent. It has been suggested that
the rate on such loans be reduced to
per cent. In addition bills have been
| introduced into Congress to create a
| 81 ,0OO, ,00O, 900 corporation to lend money
| to the farmers at per cent and
another authorizing the Federal Gov
ernment to refnance all farm mort
cages at 112 per cent.
Creditor Incomes Affected.
Negotiations are being entered into
daily between creditors and debtors in
the urban real estate field by which
voluntary concessions are being made.
| Interest rates on mortgages are being
reduced from per cent to 8 per cent
where necessity compels. 1t Is the