Search

The article reports developments in the U.S. debt market as of mid-December 1974. It cites the growing complexities in the sector, citing as example the issue of whether to treat a 25-year bonds, a 60-day bank loan and a 90-day note or commercial paper as long-term debt or current liabilities. The opinions of Arthur Andersen & Co.'s Robert May and AT&T's Warren W. Brown on the developments are also cited.

This article predicts that the debt markets will not be swamped by corporations in 1972 even if the U.S. economy is on its way to recovery. Corporate treasurers that they have enough money to finance expansion in 1972 and even in 1973. This views by corporate treasurers raise doubts about the expected that capital spending in 1972 will increase by 14%. This financial state of companies is said to be the result of their reaction to 1969 economic instability by building liquidity.

The article discusses the reduction of the New York Stock Exchange margin requirement from 75% to 50% as a response of the Federal Reserve Board to the small volume of stock market credit in 1953. It says that the cut boosted the business activity and the stock prices. It tells that though the securities industry projected the cut, the change was a surprise. It presents charts such as one that lists brokers' borrowings from 1929 to 1952 and one that shows stock market gains from 1949 to 1953.