The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-13
TREASURY AIM
TO PROP CASH
SEEN VIA BILLS
One Third of Proceeds of
Last Sale Turned Into
Balance.
BY BARROW LYONS
Tim~r special Writer


have watched the adroit financing
OF the United States treasury during
the trying latter months OF the New
Deal. when industrial uncertainty
and retrenchment have made large
financing Of any kind most diff
cult. we're exceedingly interested to-
day in the recent offering Of the
treasury department OF SIS 900 600
l52-day bills sold on a discount basis
% the highest bidder.
The feature Of this offering. which
attracted most attention was the
fact that about one-thlrd OF the
proceeds Of these bills are 10 be
turned into the treasury balance,
while only 100000 600 is 20 be used
10 retire maturities falling due on
Nov. Il
First Time i'm Months
Il vas the first time in a number
Of months in which so large a pro-
portion Of cash realized from the
sale OF bills has been used TO aug
ment the treasury balance
Acute observers surmised that Sec
Rotary Morgenthau was using this
method Of building up his cash bal
snces in anticipation OF s5O.14O,OOO
discount bills which become due on
Nov. p and 1892. 496 500 Of 2is per
cent certificates which fall due on
Dec. /.
Tho frracrrr-r ertFo~rl % ro,,cirlo,-
able drain in October. when II be-
came necessary to satisfy the hold
ers Of S225. 900. 900 Of the $3.50 OOO.-
600 in Fourth Liberty bonds called
for redemption. From oct. l, when
the net cash available TO the treas
ury stood at S2.193II7.439, the bal
ance fell 10 s1.7s2 1O9.O7l on Nov.
/. and was Sl,73l .465,47O on Nov 6.
$4,000, 100000 Balance on March l
This was a far CRY from the bal
anCe Of S49Ol .768. 800 on March l,
after the treasury had written up
its books through the devaluation
Of the dollar by s2.SOS. POI 1877. or the
total OF s5.8I7 .S7O.6l6 on April fol-
loving the collection Of March in
come tax receipts. These large fig
ures were reduced on March when
the gold profit" was transferred to
other accounts. $1,000. 100000 being
set aside for the sterilization fund.
With the swing TO the left taken
in the elections on Tuesday, finan-
Cial experts were wondering what
the attitude Of capital would be 10
continue financing of the New Deal
whether there would be continued
cooperation or a tendency 10 place
great obstacles in the way of gov
eminent financing.
Since 50 large a part Of the funds
Of banks are invested IN govern
ment securities. 1t is a foregone con-
cluSiOn that the banks themselves
can not afford TO take an attitude
which would endanger the position
OF government securities. But their
ability TO absorb further issues has
a limit
S5,7OO,OOO,OOO Due in Year
Within the next year. however,
government maturitieS amount 10
the tremendous sum of S5,790Il4.-
900. The largest items are s528.-
IOl 500 of % per cent notes due on
March Is. 1885. and $3.50 100000 Of
called Fourth Liberty AS due on
April Is. In addition. S4l6.602 800 of
3 per cent notes will be due on June
Is and s353.S65. 900 Is per cent
notes mature on Aug. l.
Moreover. the government Will
need large sums for its relief and
recovery measures. President RooSe-
welt has intimated he was depend
ing upon recovery. which would
mean higher earnings for corpora
tons and taxpayers generally, 10
produce the wherewithal.
Recovery. undoubtedly. would pro-
duce increased taxes. but with a
turn upward in the financial tides IL
is also hoped that funds viii flow
more freely into private enterprises.
II the capital market for private in
vestments opens up. as all invest
ment bankers are hoping that It
VIII. il Is not clear as yet that those
whose funds are accommodating in
LARGE bank balances will be as ready
10 invest in government securities.
This is one Of the 0ilemmaS which
New Deal financing faces.