Renewed Interest In Treasury Bills
! During previous interest surges | 'such as in 1969-70 and 1973-74, the i Treasury bill was the only place for ' a small investor to earn much more | than the federally controlled inter-i s est rate on bank savings accounts.</br></br>ÐÊÛÓ At present, however, small inves-/tors have many other places in Pwhich to invest their funds, including special bank and savings and ft loan association certificates of de-^ posit whose interest rates and magi turities are tied to Treasury bills. tå£ The new certificates of deposits were created by federal regulators Cto give savings and loan associate tions a fighting chance at keeping Û¢*f many of the deposits they lost to å£ Treasury bills in earlier years. Be-Ef cause S&Ls make most of the new & home loans in the nation, when ^Jthey run short of deposits and stop ÛÏsnaking 1 mortgages, it depresses Û÷ housing.</br></br>So far, the new certificates have .kept new funds flowing into S&Ls, fand the home building industry is ! going strong. But interest rates ) continue to rise as the Federal Re-I serve Board tries to fight inflation [ and prop up the dollar with a > stingy monetary policy. And as in-! terest rates climb, S&Ls are finding it increasingly expensive to sell the new certificates.</br></br>Furthermore, as investors are perhaps beginning to discover, the interest on the special certificates is fully taxable, while the interest Ûª on federal securities is not taxable 'at the state and local level (it is taxable on federal returns).</br></br>For whatever reason, small investor interest has been rekindled in Treasury bills, the shortest of the debt obligations issuedÛª by the federal government Dorothy Mou-gian, who runs the office that sells bills at the main Treasury Department building, said 50 to 60 individuals usually show up during the week to buy a bill. Last week, she said, about 200 made applications (tenders) to purchase a Treasury bill.