Evening star., 1950-09-24

that, for example, you could In
vest 500 in such an E-bond in
1851 and receive for it. say. $133
on maturity in 1861. Few people
like this idea. The banks which
act as issuing agents do not like
it. This method would entail ad-
ditional clerical expense to all
concerned in handling savings
bonds. AS compared with the au-
tomato extension of the life of
outstanding bonds as they ma
ture, reissuing new bonds would
cost the Treasury several million
dollars a year in extra expense.
Bank Certificate Idea.
Thought is being given to a.
suggestion that the commercial
banks be made fiscal agents OF
the Treasury. The scheme is some
thing like this. You would go to
a bank-any bank in your neigh
borhood-and turn in your saw
ings bonds. In exchange, you
would receive not a new bond,
but a certificate evidencing that
you have a savings-bond account
with the bank. And you would
continue to receive all the interest
and redemption benefits you now
get from savings bonds. Your
money would be every bit as safe.
Uncle Sam would guarantee that.
But the Treasury would be spared
a great deal of bookkeeping and
other clerical work.
The big hitch in this scheme
is whether the banks would be
willing to assume this job without
compensation; and whether the
war manpower shortage would in
any case interfere with the banks
doing this for you and the
Treasury.
At present commercial banks
issue savings bonds to the public
without charge to the Treasury
or the bondbuyer.
Repeated Queue-ups Feared.
If savings bonds as they ma
ture are replaced with new bonds.
a special problem will be posed
by the millions of persons who
have been buying E-bonds on the
payroll-deduction system. Such
persons may have bonds maturing
in every month of 1851 or 1852;
or maturing in only certain
months. For them to have to queue
UP at a bank every month to
effect the exchange or for their
employers to do so for them, will
be a nuisance.
For such bondholders it has been
proposed that the Treasury adopt
an average dating" plan. Under
it, for a number of E-bonds ma
turing in different months of a.
given year the holder could, if
he wished. receive single bond
of maturity such that ne would
lose nothing by the exchange.
Also talked about in Washing
ton financial circles is the is
suance of new form of savings
bond. For one thing, there has
been good deal of demand for
making E-bonds eligible as COL
lateral for bank loans At present
E-bonds are not, being non
negotiable.
A great many E-bond holders,
realizing that they are about 10
years older than when they started
buying such bonds, are becoming
more interested in having some
spendable income which they can
regularly use as pocket money. At
present. E-bond holders needing
cash have to cash a bond every
now and then. For such persons
it has been proposed that matur-
ing E-bonds be made convertible
at their holders option into new
savings bonds of the Series-G
type. under which plan the prlncj-
pal would be kept intact but the
interest would come to the bond
holder twice a year in The form
of check. Under the present
setup. the real little fellow with
mall-denomination bonds cam
not get his income currently. :
Some Other Plan Necessary.
The problem of what to do
about the billions Of savings bonds
which will start maturing next
year is not exactly simple. But,
in the light of the big Federal
deficit, the war outlook and the
imitation situation, some alterna-.
tive to cash on the barrelhead will