One of the long-standing difficulties of the Eisenhower Administration was its inability to persuade Congress to abolish the 4¼% interest ceiling on long-term (over five years) Government securities. The Kennedy Administration last week got around the problem deftly. In a letter to Treasury Secretary Douglas Dillon, Attorney General Robert Kennedy ruled that it was legally permissible for the Government to offer long-term bonds at a discount provided the coupon interest rate did not exceed 4¼%. Thus, a long-term $1,000 bond could be sold for $950, with the $50 discount in effect boosting the yield to the investor to more than 4¼%....
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