Micawber v. Morgenthau

"My other piece of advice, Copper field, you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the God of day goes down upon the dreary scene and --in short, you are flat."

If the words of that incurable optimist, Mr. Wilkins Micawber, rang in the ears of Treasury Secretary Henry Morgenthau last week, Mr. Morgenthau gave no sign. He had just floated the biggest peacetime loan in U.S. history--$1,504,425,000* to keep the Government going until Dec. 1. This loan brought the U.S. national debt to a record high of $52,710,632,552.76.

In Wilkins Micawber language, the U.S. Government's position is now about this: Monthly income: 700 million dollars; monthly expenditures: 700 million dollars and one billion more; results: any man's guess.

The new debt limit, set by Congress earlier this year, is only $65,000,000,000. Within the next few months Mr. Morgenthau will have to borrow several more billions. Before another year is out, Mr. Morgenthau will probably have to ask Congress to up the limit again.

* Only $1,200,000,000 of Mr. Morgenthau's bond issue was for sale to the public. Bearing 2 1/2% interest, maturing in 25 to 31 years, it was designed to appeal to individuals rather than to banks, and thus to discourage an inflationary increase in bank credit. The issue was snapped up by hungry investors in a few hours. Another $204,425,400 will be exchanged for old bonds, bearing 1 1/4%, which mature in December. The remaining $100,000,000 will be reinvested in Government trust accounts.

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