Evening star., 1937-04-06
INTEREST BOOST
|SFEARED0NNEW
US. BORROWINGS
Fiscal Officials Speculate
Over Maintenance of
Present Rate.
DISCOUNT BILL ISSUE
TOTALS $500, 900, 900
Reserve Buying of U. S. Securities
May Serve to Keep Charges
on Bonds Low.
BY the Associated Press.

BY the Associated Press.
Fiscal officials speculated today over
whether low interest rates on past
Government financing could be main
tanned when the Treasury carries out
its plan to borrow additional money
before July /.
In it's December and March flnanc-
ing. the Treasury issued 25 per cent
bonds. Now. however, bank liquida-
tion of Government securities and
other developments have led to belief
in some administration quarters that
any future bonds may carry higher
coupon rate.
In his statement that the Treasury
will borrow new cash this fiscal year,
Secretary Morgenthau did not say
how much would be borrowed, or what
type of obligations would be issued
The Treasury has been borrowing in
anticipation Of June IS tax payments
at the rate of $50,000,000 a week
through discount bill issues.
Further Bills May Be Issued.
Originally, Morgenthau contem-
plated borrowing only $500 100000 in
this manner. but some informed au-
thorities said today further bill issues
may be employed for the projected ad-
ditional financing.
With the sale of S5O0OO,OOO of bills
yesterday, the total issue reached
$500 900, 900. A slight stiffening of the
rate on these bills was reported last
night.
One factor which may tend to keep
interest rates low, however, is the Fed
eral Reserve Boards decision to buy
Government securities on the open
market
Meanwhile, members of Congress
looked to the revised budget expected
from President Roosevelt next week
for an explanation of Secretary Nor
genthau's projected new increase in
the Federal debt.
Revenues have totaled s3.762 900 900
SO far this fiscal year Only three
months of that year remain. Mr.
Roosevelt's January budget estima ted
the years revenue at s5,7s6, 900, 900.
Budget May Reduce Estimate.
Since heaviest revenues flow in with
the March income tax deadline, some
persons doubt this goa' will be
achieved. If income appears likely
to fall short, the Presidents revised
budget next week may scale down the
estimate
Morgenthau said yesterday, L am
quite sure we will need new money
between now and the end Of the fiscal
year, July l." He did not say whether
the decision was prompted by failure
of income tax receipts to meet esti-
mates.
About April IA. Mr.. Roosevelt will
send revised budget to Congress, and
it may scale down the estimate.
New High Debt Likely.
The new borrowing probably will
push the public debt over the $35,-
026 100000 originally forecast for the
end of this fiscal year. At present, the
debt stands at new all-time high of
S34 1882 100000.
Morgenthau's announcement of new
borrowing followed the heavy liquida-
ton movement in the Government
bond market the past several weeks.
1t was this movement that led to the
Federal Reserve Board decision to buy
Government securities on the open
market for the announced purpose of
maintaining orderly conditions.
This action will tend to bolster banks
supplies of idle cash, and thus officials
expect it to maintain easy money
conditions.
Morgenthau described the Reserve
Board action as "a constructive move. "
He said the Treasury itself has no
immediate plans for exerting any in
fluence on the money market, but that
it is keeping in close touch with Fed
eral Reserve activities.