The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
March 23, 19^0 HE NEW REGULATION ON SAYINGS BONDS The Secretary announced yesterday that after April 1 Savings bonds "will be sold only to individualsj either a single individual, two individuals as co-owners, or an individual with another individual named as beneficiary* While this is a step in the direction of reducing the volume of sales to large holders, it does not go far enough* Below are some preliminary comments upon the effect of the action* 1* The reduction in sales will occur mainly in January, February, and March of 19^*1 because the ineligible purchasers will have largely filled their requirements for 19li0 by the end of this month* 2# The amount of the reduction in net sales for the year from April 1, 19^0 to March 30,19^1 will probably be not more than $350,000,000 out of the prospective total of perhaps $1,200,000,000 which would have been realized had there been no change in the regulation* 3ยป We may expect a rush from the future ineligible purchasers to get under the April 1 dead line, so that the increased sales for the rest of this month will probably be sufficient to offset any loss during the remaining three months of the current fiscal year* Consequently, our estimate of the Treasury1 s cash balance as of the end of June 19^0 should not be materially affected by the new regulation* lj.* Other reasons for not expecting so large a reduction in the net sales of Savings bonds as might be indicated by the new regulation are that the ineligible groups will be someishat less willing to redeem their present holdings if they can no longer purchase new bonds* There may also be some shift of new purchases to individuals -which would otherwise go to partnerships, trustees, or guardians. 5* Now that this regulation has been adopted, if sales continue in relatively large volume during the next few months, the question of reducing the maximum amount -which individuals are permitted to purchase might well be raised again*