Word: longer-term
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...short-term (i.e., one year or less) Government securities has come due, the U.S. has simply offered another short-term issue to replace it. Last week, in exchange for an $8.9 billion issue of one-year certificates falling due Feb. 15, Treasury Secretary George M. Humphrey gave investors a choice of 1) a similar one-year replacement issue of certificates, or 2) bonds maturing in five years, ten months. Humphrey's eventual goal: to put the $267 billion national debt, now 80% concentrated in securities maturing or redeemable in five years or less, on a longer-term basis...
Among other things, this would help ward off further inflation by tying up money for longer periods; it would also lessen the danger of U.S. bonds going begging in future economic crises. The new issues will cost the U.S. more in interest (2¼% for the one-year securities, 2½% for the longer-term bonds, v. 1⅞% for the maturing issue). But actually the new rates are in line with or better than the current market in U.S. bonds. Furthermore, Secretary Humphrey and his chief fiscal adviser, Randolph Burgess, think that the long-run advantages to the Government...
...longer-term securities should discourage commercial borrowing, thus tighten up on credit, restrict inflation. Investors other than banks should be lured by their higher interest rates, hence fewer Government securities will be available as cash with which to expand bank lending. And the Federal Reserve System, which in the past was kept busy pouring support money into the U.S. bond market to keep it steady for new issues, will be freer to make major anti-inflationary moves...