Evening star., 1941-10-16
Plan for Treasury
To Handle All j. ).
Borrowing Studied
Moreenthou Considers
Banning Security Issues
BY Federal Agencies
ey the Associated Press.

ey the Associated Press.
Secretary of the Treasury Morgen-
thau announced today he was con-
siderlng a plan of abolishing all
borrowing by Federal agencies other
than the Treasury Department.
He told a press conference that
the plan. if adopted would provide
that the Treasury would be the
only Federal borrower and any other
Federal agencies needing money
would be required to borrow it from
the Treasury.
THE borrowing program to
finance the defense program is so
immense that the decks must be
cleared for United States Treasury
securities" Mr.. Morgenthau ex-
planned.
Several Federal agencies, includ-
ing the Reconstruction Finance
Corp, Commodity Credit Corp. and
United States Housing Authority,
now borrow money directly from
the public, from time to time.
Would Be Refunded.
The total debt of Federal agencies
other than the Treasury on Septem-
Der 80 was S6,928 ,941 ,OO5. In period
OF five years, as these securities come
due for payments. Mr.. Morgenthau
said, they might all be refunded by
direct Treasury obligations
The Treasury itself owes S51 .554,-
a45 ,436. With deficit running over
81 100000, 1000 month, the Treasury
Is due within possibly the next year
to crowd the new statutory debt
limit of $65 100000 900.
However, Mr. Morgenthau said,
we must be realistic about the debt
limit. There is no question about it,
1t will have to be raised"
Denies Political Influence.
Reminded by one inquirer that
opponents of the Roosevelt admins
tratlon have frequently criticized
the Government for allegedly con-
cealing its debts, through extensive
borrowing by other Government
agencies, Mr.. Morgenthau said,
There is nothing political il this
Although emphasizing that no
hnal decision has been made on
the plan, Mr.. Morgenthau said it
will be applied at least to the United
States Housing Authority. A s1l2.-
100000 security issue of this agency
Is coming due in the next few
weeks. and Mr.. Morgenthau said
1t would be refunded by direct
Treasury obligations.
Mr.. Morgenthau said the defense
program would require the Treas
ury to float large securities issues
"st least every other month
We don't want TO go to the
market too often" he added, "and
one way to prevent confusion would
be to have the Treasury the only
borrower"
Will Save Interest.
Some interest money also. can be
saved by the process, Mr.. Morgen-
thau asserted
The other agencies have to pay
more for their money than the
Treasury. and so the agencies could |
not object if We lent them the money
as cheap or cheaper than they could !
get directly from the public he |
said.
Mr.. Morgenthau also remarked |
that the proposal had been discussed !
with Jesse H. Jones, Federal loan |
administrator. and, he said, Mr.. |
Jones is sympathetic.
Tho hnfhnr
outstanding include:
Commodity Credit Corp. notes.
1905, 300 900: Federal Farm Mortgage
Corp. bonds. s1269 400 900: Federal
Housing Administration debentures,
sl6900,000; Home Owners Loan
Corp. bonds. S2,408 900 900: Recon-
struction Finance Corp. notes. 81
101 100000; United States Housing
Authority notes, 1926, 100000.
OF these, the H. o. L. C. bonds
probably would be the last to be
converted into Treasury obligations,
under the plan. The H. 0. L. c. at
present. is supposed to be only COL
lectlng money from its mortgages to |
pay off the bonds and would have
no need for refunding its bonds |
under present conditions.
The R. F. c., however, is the
agency which would be the prin-
cipal borrower from the Treasury
instead of the public under the
plan.
With over $4,000 1000 of defense
commitments, that agency may
need a great deal of money in the
coming years. Congress has Just
a bill giving the R. F. c.
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