Word: longer-term
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Dates: during 1953-1953
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...support and supply units, his ammunition stocks, and "our greatest weakness"-tactical air power; he was disturbed that West Germany's "contribution" was still denied him. Above all, he was alarmed by the way "nations are beginning to change their planned military programs from rapid rearmament to a longer-term policy . . . Any real slackening of effort may itself open the way to aggression...
Last week Humphrey temporarily abandoned his hope of floating new longer-term issues. For $4.9 billion worth of refinancing required for June, he resorted to one-year certificates. But he did not abandon his policy of higher interest. The certificates were offered at 2 5/8%, the highest short-term Treasury rate in 20 years...
...less, will be a long and difficult job. Nine weeks ago, Secretary Humphrey offered investors a choice of fiveyear, ten-month, 2½% bonds or short-term notes in exchange for $3.8 billion of maturing certificates (TIME, Feb. 9). The certificate holders took only $619 million worth of the longer-term issue. But as the bonds went on sale this week, it looked like a quick sellout...
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...