Evening star., 1934-06-04
TREASURY SEEKS
s8OO,OOO,OOO LOAN
Financing Operation May
Reach Maximum of
$1,32O,0OO,000.
BY the Associated Press.

BY the Associated Press.
The Government has asked Ameri-
can investors for $500 600, 900 of new
money in Treasury financing opera
ton which may reach maximum of
1890, 900 900.
Secretary Morgenthau today offered
buyers two security issues-$300. .000,-
900 in 12-14 year per cent bonds
and $500 10000 in 5-year 2h per
cent notes.
He reserved the right to increase
the bond issue by a maximum of
$500 1913. .10O-enough to exchange new
bonds for STA, ,905 500 in one-quarter
of l per cent certificates maturing
June Is, and for $345 ,292 800 in 2s
per cent notes maturing August /.
The financing meant the Treasury
wanted a minimum of $500 900 900 in
new money to meet recovery costs.
After that it was willing to boost the
size of the per cent bond issue by
whatever amount holders of the ma
turing certificates and notes wished to
exchange them for bonds.
Cheapest Since 1881.
The interest rate set on the bond
issue-3 per cent-was the cheapest
to the Government on any bond
f1otation since an issue of 24-year 3's
in September, 1881. This SITS 100000
sale later became known in financial
circles as MELONS 3's."
That both the new issues were S.
year paper or more was regarded as
a new evidence of Morgenthau's desire
to convert much of the large Short
term debt into longer-term securities.
By including the August maturity
in the conversion offer. Morgenthau
took the first bite into the huge ma
turtles which the Government must
meet during the 1885 fiscal year be-
ginning July l, in addition to the bor-
rowing which must be done for
emergency outlays.
Besides more than a billion in three
and six month bills already outstand-
ing, in the 1885 financial year the
Treasury has the following obligations
falling due:
S345, ,292 600 in 2is per cent notes
due August l Gncluded in the ex-
change offer).
S524,748, 500 in 1i2 certificates ma
turing September Is.
Sl,200,000,000 in Al fourth Liberties
called for October IS.
1892, 1885, 500 in "a certificates ma
turing December Is.
28,l01 900 in 2l2 notes maturing
March IS
s416,602,s 800 in notes maturing
June Is. 1885.
The aggregate of these maturities
is S40o7 ,242, 900.
Emergency Spending Down.
Borrowing $500 900, 900 in new
money was interpreted in some quar-.
ters as indicating the administra ton!
/ belief emergency spending will jumI
forward in the Summer months. Pub.
lie works outlayS and funds fol
drought areas are expected
to be heavy.
Just now. emergency spending /:
at low ebb. With all expenditure.
amounting to only $549, ,355 900, thu
month of May showed the lowest fig
ure since last November.
The Treasury has O21.7l3.0o0 o.
cash on hand. Excluding 1888 900 ,00(
of dollar profit on devaluation which
is not counted in gauging pocketbool
needs, $l,188,000 1000 is left for ready
spending.
officials said that in normal time.
the Treasury carried from a half u
billion dollars and that in the face
of an extraordinary spending pro.
gram. a $4,000 100000 fund woulc
not be overlarge The public deb
now stands at s26, ,155. 100000
The new bond issue will be datec
June Is and will bear interest from
that date payable semi-annually The
bonds will mature June Is, l948, but
may be redeemed at the Treasury.
| option on and after June Is, 1916.
The notes will be dated June IS
bearing interest payable semiannual.
ly from that date. They will mature
June Is, 1899.
/ Exempt From Taxation.
Interest payment dates for botf
the bonds and notes will be June /;
/ cations for the new issues will be re.
! CelVeO dI IcucIdI lNSSclNC UdllhS dilt
branches and at the Treasury.
The new bonds will be exempt, botf
! as to principal and interest, from al
taxation except estate or inheritance
taxes, surtaxes. excess-proflts ant
war profits taxes. The interest or
bonds up to 5000 of principal amoun
under one ownership will be exemp
from all taxation. The notes will b,
exempt, both as to principal and in
terest, from all taxation except estat,
or inheritance taxes.
The bonds, with coupons attached
will be issued in denominations o
! $50, S10O, $500, $1,000, $4,000, S10,00t
/ and 100000. The notes will be is
sued in bearer form only with inter
est coupons attached, in denomina
/ tions of s100, $500, $1,000, $4,000
! $4,000 and 100000.