Word: terme
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Dates: during 1950-1959
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Three days after it had marched up the hill to spear the President's request for authorization of a long-term foreign-aid development fund, the House Foreign Affairs Committee did an abrupt about-face last week, marched back down again to approve the bill...
...Secretary Humphrey has failed to make much headway toward one of his primary goals in 1953; this was to stretch out and stabilize the debt by transferring much of it from short-term into long-term securities. Not only would such a transfer help combat inflation by sopping up credit, it would also make the Treasury's debt management job much simpler by cutting down on refinancing operations...
...average 3¾% for corporate issues; the bonds soon became known as "Humphrey's Dumpties," dropped far below par, and still sell at 93.26. A 40-year issue at 3% in 1955 has tumbled to 87.24. The result, says Humphrey, is that "we must therefore sell mostly short-term securities, which are attractive because of their liquidity...
...done soon. Many bankers argue that the Treasury should have moved much faster to keep U.S. Government securities rates in line with the overall money market. By hiking rates a fraction at a time, always too little too late, Secretary Humphrey has, in effect, guaranteed the failure of long-term issues. He has also increased the margin between Government and corporate bonds instead of narrowing it. On a straight interest basis, Government bonds paid as much as 2.37½^% in 1952 v. an average 3.42% for corporate issues; today, the highest paying Government bond rate is 3¼% v. almost...
...make long-term Government bonds more attractive, some bankers think that the Treasury should boost its rates more in line with the market level. While some financial men fear that such a move would demoralize the entire Government bond market by depressing lower-paying issues, others argue that the Treasury needs strong medicine to solve its problems. Still another idea is to float a convertible bond. The U.S. Treasury could issue a convertible bond at 4% interest, for example, give investors the option of either cashing it in after one year, or of converting it into a longterm, twelve-year...