Evening star., 1939-11-28
Increase Debt Limit
Or Levy New Taxes,
Morgenthau Says
Bids to Be Received
Today for Treosury's
$500,000, 1000 Issue
By the Associated Press

By the Associated Press.
Secretary Morgenthau, asking the
public to lend the Treasury $780,
100000 for imminent Federal ex-
penses, said yesterday that Congress
soon must do something about in
creasing the national debt limit or
levying new taxes, ''if the boys are
going to eat"
He made the "eating" comment in
a joking tone and declined to ex-
plain it. However, it was under
stood the Secretary meant that If
congressional appropriations were
going to be met the Treasury would
need some means of getting the
money.
The $780, 100000, for which bids
will be received today, will be an
addition to the public debt, now SAL :
6.551, ,646. With more deficits in
view, the Treasury is getting close to
the $45 ,000,000,0 900 limit placed on
the debt more than Is years ago.
Secretary Not Worried.
Secretary Morgenthau, grinning to
show he was not worried about the
debt situation, said his confidence in
public investment demand for Gov
ernment bonds was shown by his
choice of per cent interest rate
on the 9-to-11-year bonds to be sold
to raise the $500 100000. This was,
he said, the lowest interest rate ever
offered on comparable Govern
ment security.
Although the Treasury has 81, 1,500,-
100000 in cash on hand, Secretary
Morgenthau said the borrowing was
being undertaken because of the
need for more cash to pay for the
deficit in coming months. Since the
fiscal year began July /, the Treas
ury has spent $3,756,470,503 and
taken in S2,125 1885, 800, causing a
deficit of $3.50, ,473 ,582. The deficit
may increase another $2,0O0,0O0 900
before the fiscal year ends next
June 80.
Secretary Morgenthau also an
nounced a new plan for enabling
small stockholders to buy portions of
a Government bond Issue would be
tried out in today's financing. Usu-
ally, all bids for new bonds are filed
on the basis of immediate delivery of
the bonds, which enables the pur-
chasers to resell them whenever
they please. Such offers usually
total many times the amount of
bonds the Treasury wants to sell.
and the bidders are apportioned
small shares of their bids.
This procedure will be allowed
again today, but any small investors
wanting to buy not more than S.
600 worth of the new bonds and will
ing to let the Treasury hold the Sc
curities for 60 days to prevent resale
until then, will be sold all they ask
for up to S5000 Secretary Morgen-
thau explained that spectators
were unlikely to file this type of bid
because of the 60-day restriction.
Another S5O,000,0O0 Issue.
In addition to the $5OO.O00, 900
worth of the new bonds to be sold
the public, the Treasury will issue
another $50 100000 of the same type
of bonds to refund other Treasury
obligations owned by Government
trust accounts such as postal saw
ings. This batch of securities will
not affect the total debt.
The borrowing decision was made
after conference with Federal Re-
serve Board officials Secretary
Morgenthau said that after an in
terval of at least a couple of weeks
the group would consider refunding
$l,378,364,200 worth of Treasury
notes which will mature March Is
After that the Tennessee alley Au-
thority may borrow between $50,-
100000 and s6O,OOOOOO in order to
repay money advanced by the Treas
ury for the purchase of private util-
tiles in TennesSe.