A Fee For Lending Uncle Sam Money?

THE DAYS OF PURCHASING Treasury securities directly from the government for free may be numbered. In May, the feds will assess a $25 fee on all Treasury Direct accounts of $100,000 or more. Sure, $25 is a pittance for someone able to spring for a hundred grand's worth of T-bills. But some bond experts think fees will next be imposed on the common folk who hold far smaller amounts for their accounts, where the Treasury keeps their paper, as a brokerage does.

The Treasury Direct program, in operation since 1986, enables people to bypass brokers, who charge commissions of $50 or more per transaction. The $25 Treasury Direct maintenance fee is a bid to recoup some of the program's $25 million annual cost, although the $2.5 million expected in its first year isn't much.

To fixed-income sages such as Jay Chitnis, a bond dealer with Stoever Glass in New York, the fee on heavyweight investors could be "a revenue-raising trial balloon." John Markese, president of the American Association of Individual Investors, expects that fees on $10,000 accounts may not be far off. Then, people may simply go to brokers, he says.

Meanwhile, the U.S. Bureau of the Public Debt swears that there are no plans afoot to extend the fees. Still, concedes spokesman Peter Hollenbach, "anything's possible."

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