The Daily Alaska empire., 1936-09-14
THE NATIONS FINANCIAL PICTURE

Tomorrow the U S. Treasury will borrow $400- 100000 in cash in addition to refunding about $514- 100000 in F per cent notes maturing at that time. Secretary Morgenthau in announcing the action cited troubled foreign conditions which may possibly dis turb the American money market
 MT Morgenthau said that he planned to main tain working cash balance of around $1 1O00 GOO 0O0 which he characterized as "the safest insurance we carry for the American people should anything unforeseen occur"
 It was explained that should serious dition develop Europe the result might be tight enng of the American money market and rise in interest rates Treasury borrowing particularly long-term securities
 The Treasury on September had cash balance of $1883 95558 and working balance" of $1419- 936746 The exchange stabilization fund continued to be listed sl,8oooOO,OOo The original fund was s20O00oOO0O but s2OO 100000 placed in the gen. eral fund for active use. The Treasury has said little of the operation of this fund but it believed to be intact.
 Maintenance of the $100O 100000 cash balance has nothing with stabilization activities It was not believed that any toward general inter- national stabzaton would take place in the near future. Continuation of the large balance was de- signed to protect Treasury borrowing against foreign difficulties which would upset the money market in this country
  not exceed $75oO000O0 for the 1897 fiscal year. as stated in the Presidents revised budget esti- mates made public few days ago.
 We want to keep our cash balance at about it's present level in these times with conditions they exist abroad MT. Morgenthau said
 Tt is very desirable thing to do This balance costs us only about $20O0OO0 a year to maintain in interest and the cheapest and safest insurance the American people have"
 One factor in the low cost of financing the public debt is the rate of less than per the S2 353- a52000 on outstanding bills. The average rate of erest the public debt of s33 376 991 25l is about 2h per
 During the fiscal year to date the Treasury cash balance has been reduced by about s80OOOO <N In MT. Roosevets revised budget statement he said that the reduction of the cash balance during the fiscal year would be SllOoOOO0OO move which would aim at checking the rise in the public debt.
 In discussing the necessity of borrowing s400 0OO- 900 in new money Secretary Morgenthau called at- tention to the Treasurys financing of certain Home Owners Corporation securities and to the fact that the collection of the "wndfall" or unjust en- richment," tax due to the refunding of processing taxes was postponed from September IS to December Is. It is estimated that this tax will yield about $s2 100000
 The Treasury expected to purchase sl0O- 100000 in capital stock of Federal loan and savings associations during the year
 The Home Owers Loan Corporation it was ex- plained. is making monthly collections of interest from its mortgagors in amount about s4OO00O greater than its disbursements for operating expenses including bond interest However in accordance with Congressional man. date the corporation is investing ss00oOOo to $Io- 10000 month in the shares of savings and loanI