Evening star., 1935-01-22
BOND ISSUE BOOST
IS GIVEN APPROVAL
Nine Billions Increase in
Limit Favored Along With
"Baby" Bonds.
BY the Associated Press.

! BY the Associated Press.
The Treasury bill to permit iSsu-
ance of nine billino dollars of new
long-term bonds and so-called baby
bonds" was approved unanimously to-
day by the House Ways and Means
Committee.
The action was taken quickly after
Secretary Morgenthau testified for
nearly an hour that the Treasury
needed more leeway in the f1otation
of securities.
The measure was introduced only
yesterday by Chairman Dougnton of
the committee.
Bond Limit Approaching.
The New Deal, finding itself within
81, 100000 of the legal limit be-
yond which it could not issue any more
bonds. is seeking to have its au-
thority to sell such securities increased
by about s9,000,0O0,000
At the same time, Secretary Nor
genthau disclosed what he termed
new string on our Cmoney) bow
a proposal that new type of baby
bond" be issued for the general public,
including persons of moderate means.
In denominations ranging from $25
to $4,000, these bonds would be of
10 to 20 year maturity. They would
be on a discount basis and would be
E1L
lent of between ? and 3 per cent.
Those buying the bonds could Lot
sell them on the market, but they
could be turned in after six months,
and interest up to that time would be
paid. They would be issued on the
first of every month.
To Stay Within Estimates.
Commenting on the proposal to ex-
tend the bond issue limit, Secretary
Morgenthau stressed that there was
no intention of using bonds in excess
of budget estimates.
Offlcials said the request for a
change in the TreaSury's authority
grew out of the provisions of the Sec
ond Liberty loan act. That law placed
limit of $28,000,000 900 on the ag-
gregate of Federal bonds that might
be issued
Already S25,45O,487,l15 has been
issued. OF this sum, almost $4,000
100000 has been retired, but under the
law no bonds can be issued in place
of those retired.
Revolving Principle Sought.
The proposal is that instead of the
S28000,O00,000 gross limit. a revolving
authorization of $4,000, ,O00.O 900 be
set up. This, it is said, would give the
Treasury power to issue between SILL
00,0OO,000 and $12,000,0O0, 900 more
bonds than are now outstanding. The
S1l oO0,O000O0 or $12 900, 900, 900 would
be approximately the amount retired
under the present authorization.
Inc Treasury proposal comes at a
time when the Government is PLAN
ming to spend $4,000, 900 900 in a drive
to transfer the needy from the dole
to work relief. and about S10O. .OOO.OO
on the first years operation of the
social security program
Morgenthau said the new-type
bonds would be designed to meet the
requirements of people who wanted to
save.
R. F. c. Loans Criticized.
Another development on the finan-
cal front yesterday was criticism of
the Reconstruction Corps loans-to-
industry activities, voiced at hearing
before the House Banking Committee.
Jesse Jones, chairman of the r. F.
c., was on the stand, explaining bill
to extend the life of the R. F. c. two
years. Representative Fish, Repub-
llcan, New York, said
Both the r. F. C. and the Federal
Reserve Banks have absolutely failed
IN carrying out our intent to make
loans to private industry
Some Democratic members Joined
IN the criticism. Jones said indus
trial loans have been our most diff
cult job because most people who come
to US apparently can't provide the Sc
curity required by law" He said I'VE
can give the money away, if you want
us to-"