Open Books

Economist Beardsley Ruml, who fathered the pay-as-you-go tax plan adopted by Congress in 1943, is having less success with his Ruml Plan to balance the budget by bookkeeping tricks such as taking public works and commodity inventories out of the current expense budget and treating them as capital assets (TIME, Aug. 24).

Last week Treasury Secretary George Humphrey gave a commonsense appraisal of Ruml's plan. Said he: "We are not particularly impressed with it ... It has been tried in ... foreign countries . . . They had disastrous results. I think that it might even encourage a lack of economy. We are all better off to have all of our accounts right out where . . . they hit us in the face and where they are ... in front of us to work on every day."

Humphrey's hope of getting more of the U.S. debt into long-term bonds is being still further deferred by relentless facts. Last week he faced the problem of refunding $8 billion of maturing World War II bonds, which were fairly long-term (ten years). To refinance them on a long-term basis would cost prohibitive interest rates. Instead, Humphrey announced he would offer the holders a choice of one-year certificates at 2#&8541;%, or 3 1/2-year Treasury notes at 2#&8542;%. That is short-term, and it is the highest interest the Government has ever had to offer for such issues.

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