The Washington times., 1937-01-06
u. 5. SKATERS
RECORDS FOR
BORROWING
By ERIC FRIEDMAN
International News Service

time year was inscribed on the
Federal Treasury'S ledgerS during
1885.
Laboring under the stupendous
burden Of providing relief, pay
ing the soldiers bonus, revitaliz-
ing agriculture and strengthening
the national defense establish
ments, the Government was forced
to go to the nations money martS
for more than $4,000, 900 900, a
figure exceeded only during
periods of war financing.
In his annual fiscal message
to Congress last January, Presi-
dent Roosevelt spoke hopefully Of
the imminence of q balanced bud
get, explaining that only the re-
curing cost of relief stood in the
way of bringing expenditures into
line with receipts.
The President, however. failed
to reckon with two outstanding
developments that were destined
to nullify the proposed budgetary
program for the 1887 fiscal year
which began in July and ends
next June.
High Court Ruling
The first of these was the deci-
sion Of the Supreme Court hold
ing unconstitutional the Agricul-
tural Adjustment Act causing the
Treasury to lose substantial rev.
enue from processing taxes.
The second was the passage by
Congress of the bonus bill direct
ing payment in June of approx
mately 2,000,OO0,000 of veterans
adjusted service certificates.
Although tax legislation was
passed which will greatly step up
Government income to meet these
added cost burdens, the full bene-
fits of the 1886 Revenue Act will
not accrue to the Treasury until
later.
During the calendar year OF
1886, which includes the last half
Of the 1886 and the first half of
the 1887 fiscal years, Federal ex-
penditureS aggregated roughly
about $500, ,000,0 Receipts dur
ing the year amounted to approx
nately 81, 400, 900, 900.
The major items of disburse-
ment throughout the year in
cluded about $3,000,000 900 for re-
lief and 1900 100000 for bonus
payments. The remainder was
divided among outlays for the
Army and Navy, general depart
mentS of the Governm e n t,
veterans pensions, Civilian Conser-
vation Corps, public debt charges,
Agricultural Adjustment Admins
tration and the legislative and
executive establishments.
Big Note Issues Met
In addition, the Treasury dur
ing 1886 was required to meet
maturing note issues amounting to
$3.50, ,290, 900, which was not due
for payment until February Is
but which was refinanced as part
Of the quarterly financing pro-
gram in December.
Another factor that played
prominently in the Governments
fiscal operations was the continu-
alton Of the policy Of keeping
close to 81, ,000, 900 900 in the Treas
ury'S cash balance. Secretary Of
the Treasury Morgenthau ex-
planned that the Administration
deemed it wise to maintain sucn
q rnSoY1ya m aoVd Foy oVoI, oy1oorrr
ency arising from unstable pollti-
cal conditions abroad.
Three CategOries
AS a means of financing the
enormous drains on the Federal
money till, the Treasury through
out the year placed its borrowing
operations into three categories.
First, cash was raised through
issuance of new securities; second,
maturing obligations were refi-
nanced by permitting holders to
exchange them for new issues, and
third, additional cash was obtained
through weekly issuance of short
term bills.
The first two phases of the bor-
rowing program were carried for
ward at the regular quarterly fl
nancing periods in March, June,
September and December. The
weekly bills never exceeded $780,
100000 except for eight weeks in
the spring and during the last five
weeks of the year when they were
raised to $100,000,O00.
In First Quarter
During the first quarter financ-
ing operation in March, the Treas
ury issued $1,250, 900, 900 in bonds
and notes to obtain fresh funds
and exchanged $558, ,819 900 in ma
turing notes for new securities.
In June financing established a
high-mark for any peace-time quar-
ter. Because of the bonus pay
ments, the Administration raised
$1,000, 100000 in new money and
refinanced $1,050, 100000 in note
maturities.
In September, the Treasury
foated another bond issue which
netted 100000, 900 in new money
and refinanced $514,00O, 900 in ma
turtles.
The final operation in December
included issuance of new securities
to raise $700,O00,O0 in cash, and
the refinancing of $787, ,00O, 900 in
notes. Out of the cash raised by
this operation, the Treasury paid
off 4O0,000,000 in maturing bills.
Borrowing Summarized
The following table S1ir,nr,nn ,.;un.