The Omaha guide., 1936-02-08
HAPPENINGS THAT EFFECT
THE DINNER PALS
National and international Prob
lens Inseparable from Local
Welfare

treasury MorBenCnau. - =. -.----.
The secretary Of the treasury
is purely an executive official. He
is entirely without legislative po-
wer. Yet, when congress passes a
bill requiring public expenditures
for which no funds are available,
the secretary must find the money.
He may think the bill is danger
GUS or unwise-but, IN spite OF
that, his duties force him to do
everything in his power to pave
the fiscal way.
A short time age, the President
delivered q budget message, that
showed an estimated deficit OF
81, soc, 600, 000-less than in other
recent years. However, the presi-
dent was frank to admit that the
budget was incomplete-such vital
matters as relief expenditures were
yet to be detailed, and were not
included. Best guessers say that,
while relief spending will be less
this year than last, Congress will
appropriate $4,000, O0O, 900 for the
purpose before it is finished. In
addition, maturing government
obligations call for an additional
SIS, 800, 100000. The bonus, not con-
sidered in he presidents budget
message, will cost at least another
So, O00, 000, 900.
AS a result, the deficit will be in
the neighborhood of $11,000,000-
000-eyery cent of which must be
raised in the next year and a half.
That is Dir. Mofganthau's job.
The secretary of the treasury must
determine what type of bonds to
issue, and what rate of interest to
pay. He must accurately estimate
conditions in the bond market. A
successful secretary is one who
raises money most easily at the
lowest interest cost@an nuccess
full secretary is one who fails in
either of these two particulars.
So far, the New Deal has had
things all its own way in financ-
ing. Issues have been oversubscrib-
ed within a few hours after their
appearance. The cost of carrying
the debt is lower now than it was
a few years ago, because it has
bean found possible to cut the in
terest rates much below previous
/ levels due to investors fear of
risking money in commercial en-
terprises.
Whether it will find conditions
the same in the future is the ques-
ton A short time ago, Secretary
Morganthau was called before the
Senate Finance Committee, which
wished to ask him whether he
thought the Treasury could stand
the drain of bonus payments. He
avoided answering the question
directly, though he was obviously
doubtful Of the bonus financial
wisdom. And he was, according to
all observers, somewhat worried
about future financing. He pointed
to the confused outlook and said,
$50 many things have happened
that effect the Treasury that l
certainly am not smart enough,
and l haven't met anybody that is
smart enough, to say what is the
future of the government bond
market"
When asked what would happen
if the Treasury attempted to float
$11, 000, 900 600 worth of bonds and
failed, the Secretary replied: "the
minute i cannot raise the money
required to finance the govern
ment, that minute you will have
complete chaos"
MI. Morganthau did not init
mate-nor has any other respon-
sible authority-that the u. S.
credit is in danger. However, there
seems to be a saturation point be-
yond which government bonds, no
matter how securely backed, can
not be floated on favorable terms.
AS conditions improve, oddly
enough, it becomes increasingly
difficult for the government to OBJ
tain cheap money-better business
tempts investors to purchase in
dustrial securities which either pay
higher interest rate, in the Ease CT
bonds, or offer the chance of great
appreciation of principal and earn
ings, in the case of common stocks.
Some observers think that the pre-
sent Congress, listening to words
such as Mr.. Morganthau poke, will
GO low in spending. And there is
also the possibility, and perhaps
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