Surrender

For months the U.S. Treasury and the Federal Reserve Board have been squabbling over the Treasury's cheap money policy. The Treasury, which wants to keep down the cost of carrying the $257 billion national debt, wanted to keep interest rates where they were. FRB wanted to raise them, to help check inflationary spending. Last week FRB won.

The Treasury announced a new $8 billion issue of five-year notes at 1 1/4%, or 1/4% higher than the rate on its last big long-term issue last August (TIME, Sept. 4). Since the rate on Government bonds largely determines what private interest rates will be, the prospect was that all borrowers would soon find themselves paying a little more for new loans.

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