Second Serving

Last January in his budget message President Roosevelt set up as his goal the borrowing of $10,000,000,000 from U. S. investors before July 1. Of this sum six billions was to be new money added to the Public Debt, four billions old money for refunding outstanding loans. Presumably the President was going to try to spend as fast as he borrowed--a rate that figured out about $25,000 per minute. In January the Treasury dished up its first big serving of securities--$1,000,000,000 worth, which was oversubscribed five times. Last week it dished up its second big serving--$800,000,000 in notes. Its total borrowings since the President's budget message approximated $3,000,000,000--only a trifle behind the schedule prescribed by the President.

Who undertook the delicate job of gauging investors' appetites for the second serving, of judging how much interest-sauce was necessary to make it palatable, was last week something of a mystery. The official explanation was that Scientific-Farmer Morgenthau had had to bear most of the burden. Certainly he had been aided by good advice either from friends in Wall Street or from his new Mormon assistant, Marriner Stoddard Eccles, who lately came out of Utah (TIME, Jan. 22) with the wisdom of 43 years of age, with economic ideas like those of most New Dealers, and the record of having brought his chain of 26 intermountain State banks through Depression with no casualties except a few amalgamations.

Messrs. Morgenthau, Eccles et al. looked on the U S. investment appetite, found it whetted rather than satisfied since the first serving. They offered $400,000,000 on 22-month notes at 2 1/2% interest--the same rate as offered in January on 13 1/2 month notes. Their offering was oversubscribed more than three times. They also offered $400,000,000 of 3% notes payable in three years and got an oversubscription of five times. This was good news because it indicated that soon they might be able to return to long-term financing rather than keep on piling up short-term debts.

With his eye on the rest of his financing job Secretary Morgenthau rushed earnest advice to Representatives who were last week pondering a new tax bill: let them not consider taxing hitherto tax-free U. S. securities; let them not even publicly talk about such taxation; let them kill all such proposals quietly and effectively in committee. Otherwise Mr. Morgenthau might not be able to persuade the public to take his securities.

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