Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-03-17
DISCOUNT RATE up TEST OF TAX law
Bank of England Seeks to
Check 0utgo of Gold.
FROM 3 TO q PER CENT
Increase Was Not Unexpected in
New York Money Market.
Bonds Purchased.

LONDON. March 1.-THE directors of
the Bank Of England at their weekly
meeting today raised the minimum rate
OF discount from to 4 per cent. This
action was caused by the continued
foreign demands for gold, which serious
ly depleted the banks reserves. These
are now nearly 81. 1000. 600 lower than at
the same time last year, and prospective
further Withdrawals OF the metal neces-
stated measures to increase the bank g
holdings.
For some time India has been drawing
heavily on the available supplies of gold.
and considerable sums are still wanted to
move the large crops. In addition to this
demand there is large number of for
eign issues. including big delivery Of
American bonds in exchange for British
gold, to be provided for. Forthcoming
Internal monetary requirements also de-
mand the building up of the reserve.
1t Is quite unusual for the bank rate
to be advanced at this time of the year.
No doubt one of the chief causes thereo.
is the governments failure to collect
taxes. This made money SO plentiful
that it weakened continental exchanges
on London, and made it easier for for
eign markets to take gold from this
center.
Increase Not Unexpected.
NEW YORK, March II. = Leading
financiers here expressed little surprise
at the increase Of the London bank
rate to per cent. limitations to that
effect having been quite general yester
day. In some quarters there was a dis
position to accept the advanced rate
as warning to the speculative inter
ests responsible for the recent sensa-
tlonal rise in rubber shares in the Lon
don market
The best authorities are agreed that
large proportions of the bonds anu
notes recently offered by our bankers
nave been placed abroad. This includes
such issues as the Chicago and Great
Western per cent gold bonds, tota,
issue, s1S,000.000; Lake Shore and Mich
igan Southern railway per cent gold
bonds, total, s15.0O0,000; Kansas City
Terminal railway first mortgage per
land, Arkansas and Louisiana railway
" per cent bonds, total, $1,000, 900:
st. Louis and San Francisco railroad,
SS,00O.0OO per cent three-year notes
and the $12.500,00o of Cincinnati, Ham
1lton and Dayton roads 4 per cent
notes guaranteed by the Baltimore ard
Ohio Railroad Company.
exchanged SLOckS IOr bOnQS.
In addition, to these particular issues,
it is declared that large amounts of the
better known bond issues regularly dealt
In on the stock exchange have been taken
by European investors in exchange for
stocks purchased in this market during
the period of lower prices in January
and February. and which have since been
sold back to this market with profit to
the European purchasers.
Direct sales of bonds by our bankers to
Europe within the past two months vary
widely, but a conservative estimate
places the total well above $100, 600.
That foreign gold will come in exchange
for these purchases is secuted in banking
circles. where 1t is pointed out that Eu-
ropes absorption of our securities to
date Is but small offset to our debit
balance abroad
International bankers will figure ex-
tensively in the forthcoming issue Of New
York city 45OOOO.OOO ~ per cent bonds,
bids for which will be opened next week.
1t Is not at all unlikely that fully 40 to 80
per cent OF this issue will be taken by
London and Paris bankers.