Evening star., 1937-04-04
TREASURY FACES
BEAR|SH MARKET
ASB0NDS SLUMP
New Long-T Term Loans Held
Impracticab|e Except at
Higher Rates.
SHORT-TERM OPERATIONS
EXPECTED TO CONTINUE
Absence of Program to Curtail
Federal Expenses or Boost
Revenues Stressed.
BY CHARLES F. SPEARE.

BY CHARLES r. SPEARE.
Special Dispatch to The Star.
NEW YORK, April 3.-For the first
time in several years, the Roosevelt
administration, and its Treasury
hands in Government financing The
latest issues of 2l2 per cent Treasury
bonds were at discount this week
OF over points. The pa and the
27s per cents, for the first time, we're
under par.
The obvious effect Of this is that
no fresh long-term loans would be
salable except as coupon rates were
lifted well above those of the 1886
offerings.
1t is doubtful if today the Treasury
could dispose of any considerable
amount of long-term bonds under 3
per cent. The 334s, As and 4As are
now quoted to yield better than that
figure, to maturity
The effect, therefore, is to continue
the habit Of borrowing for short
periods and run the risk of refunding
in flrmer money market than is now
in sight.
Sharpest in Five Years.
The first break in the 3 per cent
rate on United States Treasury bonds
came in March, 1885, when 27s per
cents we're offered. Three months
later the market handsomely received
an issue of 234s. The climax of the
cheap-money period was approaching
last December, when 21as came out
and were seven times oversubscribed,
and it had arrived in March, when
another loan at this same rate was
announced. Since this was sold
there has been the sharpest decline
in the Government bond market In
five years
This market is adjusting its values
to a new level of interest rates. II
that were all. the reaction that has
taken place in United States Treas
ury issues would be well along to its
end.
However, sentiment, or buyer psy-
chology, toward Governments" has
been rendered bearish by q weakness
to which the majority OF institutions
that have been buying were not
accustomed and whose force they
exaggerate, as well as by the absence
OF any program in sight to curtail
Government expenses or increase
revenues and, by one method or the
other, reduce the national debt.
Debt Growth Shown.
An exhaustive study Of the progress
OF United States Government securi-
ties, published this week by C. J..
Devlne q Co., Inc, shows the growth
OF the debt in the form of grants for
relief and for public works in the
1876 period. In the first category
the amount is s5,282,947,444 and in
the second s5,339,6l2,2o3. For all
forms Of recovery and relief" in the
f1ve-year term the expenditures have
aggregated the sum of s14,545, ,35l ,937
and are about 81 per cent of the grand
total.
In his budget message last January
President Roosevelt estimated that
81 ,537 100000 would be required for
relief purposes, including w. P. A.,
in the fiscal year 1878. Now come
forward the mayors OF the country
with a demand that this figure be
raised to s2,2OO,0OO, 900.
Cites Relief Demands.
From the majority opinion OF the
United States Supreme Court last
Monday on the minimum wage act for
women, written by Chief Justice
Hughes. is taken the following:
There is an additional and COM
pelling consideration which recent
economic experience has brought into
a strong light. The exploitation Of a
class of workers who are in an unequal
position with respect to bargaining
power, and thus relatively defenseless
against the denial of living wage. is
not only detrimental to their health
and well-being, but casts a direct
burden for their support upon the
community.
What these workers lose in wages
the taxpayers are called upon to pay.
The bare cost of living must be met.
I'VE may take judicial notice of the
unparalleled demands for relief which
arose during the recent period Of de-
preston and still continue to an
alarming extent, despite the degree Of
economic recovery which has been
achieved It is unnecessary to cite
official statistics to establish what is
of common knowledge through the
length and breadth of the land
1t is "the unparalleled demands
for relief which still continue
to an alarming extent, despite the
degree OF economic recovery" that
ISan CPEARE paua G-ol