The Rush to Redeem

Outside thousands of U.S. banks last week, queues of Americans waited to take part in the biggest war-bond redemption spree of the war. The rush came just before Treasury Secretary Morgenthau announced a Sixth War Bond Drive, to start Nov. 20, and promised a seventh. The queues were caused by the Treasury's new redemption system, making bonds as easy to cash as Government checks.

Some citizens actually took the Treasury's convenience measure to mean that they had to cash in their bonds. (One Philadelphia matron called her bank to explain that she could not get down that day and to ask if she could still get her money next day.) Some felt they need not hang on to their bonds any longer. One woman cashed in $1,000 worth "to bet on a race horse"; another got $75 to do her Christmas shopping "before the rest of the women pick over everything." A middle-aged couple cashed in $225 worth of bonds "to have a good time."

But the rush was not so serious. By week's end redemptions had leveled off to normal (1.04% per month of total holdings) and it was apparent that the reasoning behind the cash-in-quick plan was sound. Formerly there was a delay of days or weeks before the citizen got his cash. The Treasury decided that if there were no such delay, people of small means would turn in bonds only when they actually needed cash.

While redemption-minded bondholders were rushing the banks, Frank Greene Dickinson, 45, economics professor at the University of Illinois, needled their consciences. He suggested that each individual buy enough bonds to cover his share of the $200,000,000,000 war debt (Dickinson's estimate).* Then everyone would burn these bonds in a gigantic "bondfire" next July 4, thereby wiping out the debt.

* Ohio's Senator Robert Taft estimated last week that the U.S. debt will total $300,000,000,000 when the war ends, declared that if the U.S. hewed to a close budget the debt could be paid off (at the rate of $1,000,000,000 a year) by 2245.

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