Milford chronicle., 1936-02-14
ECONOMIC
HlGHLIGHTS
HappeuinEs That Affect The Dinner Pals
Dividend Cheeks And Tax nins OF Evesy
individual - National ana international
Problems Inseparable From Local
u-----...


No federal Official has a tougher
! job than Secretary of the Treasury
Morgenthau.
The Secretary Of the Treasury is
purely an executive official. He is
entirely without legislative power.
Yet. when Congress passes a bill
requiring public expenditures for
which no known funds are avail
able, the Secretary must find the
money. He may think the bill is
dangerous or unwise-but, in spite
Of that, his duties force him to do
everything in bis power to pave the
fiscal way.
A short time ago, the President
delivered a budget message, which
showed an estimated defecit Of ST.
500, ,000, ,000-less than in other re-
cent years. However. the President
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 ST.
OOO.O00,000 for that purpose before
it is finished. In addition, maturing
government obligations call for an /
additional s5,S0O,0OO.OOO. The bonus,
not considered in the Presidents |
budget message, will cost at least 4
$4,000. 100000.
AS a result, the deficit will be in
the neighbOrhOOd of $11 200, ,0O0, 900
every cent of which must be rails
ed In the next year and half. That
is Mr.. MOrgenthau's job. The Secre-
tary of the Treasury must determine
what type Of bonds to issue, and
what interest rate to pay. He must
estimate conditions in
the bond market. A successful Sec
retary is one who raises money
most easily at the lowest interest
cost-an unsuccessful Secretary is
one who fails in either of these two
particulars.
So far, the New Deal has had
things all its own way in financing.
Issues have been Overscribed with
n a few hours of their appearance.
The cost of carrying the debt is
over now than it was few years
lgo, because IL has been found pos
ible to cut interest rates much be- 6
Ow previous levels due to inves-
ors' fear of rishing money in COM I
nercial enterprises. I
Whether it will find conditions !
he same in the future is the ques-
ion. A short time ago, Secretary
Iorgenthau was called before the h
enate Finance Committee, which p
lished to ask him whether he
hought the Treasury could stand T
he drain Of bonus payments. He !
yoided answering this question di- n
ectly, though he was obviously
Oubtful of the bonus financial wis
ON. And he was, according to all
bservers, somewhat worried about
lture financing. He pointed to the II
onfused outlook and said, $50 many d
lings have happened that affect the N
that I certainly am not N
mart enough, and haven't met
nybody that is smart enough, to eC
" what is the future of the gov
-nment bond market" bi
When asked what would happen
the Treasury attempted to float al
q ,000, 100000 worth of bonds and vi
lied, the Secretary replied: "The Ia
mute cannot raise the money re-
Tired to finance the government. he
AT minute you will have complete ne
laos"
Mr.. Morgenthau certainly did not DC
has any other re- Ss
,onsible authority-that the U. S.
edit is in danger. However, there nc
ems to be a saturatiOn point be- ST
md. which government bonds, no
after how securely backed, cannot aft
foated on favorable terms. As OC
nditions improve, oddly enough, 1t
comes increasingly difficult for Ln
e government to obtain cheap sh
oney-better business tempts in da
stors to purchase industrial Sc
rites which either pay higher in en-