Evening star., 1914-11-27
LOCAL STOCK EXCHANGE
WILL RESUME MONDAY
Unrestricted Trading in Bonds Will
Feature the Reopening-No Prob
ability Of Important Recessions.
Bankers Do Not Like Recent Rul.
ings-s1oo, ,ooo, 900 Disburse-
ments December /.
BY I. A. FLEMING,

BY I. A. FLEMING.
The Washington Stock Exchange will
reopen at noon Monday, November so.
for unrestricted trading under the call
system in bonds
An executive session will be held just
before the call. This is a step In the
right direction. and in conformity with
the practice of the New York and other
stock exchanges, partial reopening.
before the final and unrestricted re-
opening.
This decision was reached at a meet
ing Of the governing committee of the
exchange at the American Security and
Trust Company this afternoon The
matter was thoroughly considered and
action taken carries with 1t no danger
OF serious loss to security holders or
periling Of margins on stocks; as the
bond market for locals has given suf-
flcient assurance of stability during
the last month to prevent any serious
sacrifice of values.
Mondays session will be largely at
tended. Brokers will welcome the re-
opening and visitors viii be present in
large numbers to note the underlying
condition of the market. An official
market with actual market quotations
IOT DOn0S VIII welcomed Oy lnNeS-
tors. traders and the public.
Moreover. the local exchange is the
first body to remove all restrictions in
Its partial reopening.
Object to Rulings.
Bankers are up in arms against two
rulings recently handed down, one by
the controller of the currency and the
other by the Treasury Department.
The first is an innovation in that IT
forces banks in the federal reserve sys-
tenn to carry regular reserves against
bond secured government deposits and
deposits secured by other securities"
Heretofore banks have not been forced
to carry reserves against these de-
posits. They. pay per cent interest,
are liable to be called on to repay at
the pleasure Of the department or to
substitute other security for that held
against the deposits.
1t means just so much more surplus
tied up and SO much more revenue on
the war tax. an honest effort being
made to raise this revenue to the full
possibilities of the measure.
Some bankers are wondering under
what law this decision was made. Some
suspect Joker" giving authority in
the new reserve Law. Special objection
is offered against the method which
banks have been ordered to employ in
in = undivided profits by taking the daily
statements for 365 days, less holidays
and Sundays, and the average Is the
amount upon which. plus capital and
surplus. the war tax Shall be paid.
The new system is certainly putting
work on junior officials. and. while
lessened reserves are required, they
are going to be maintained.
Not Much Of a Problem"
Reference in a morning cotemporary
to the calculated loss of overhead
charges on supposititious case of re-
discounting of $4,000 of commercial
paper as "a problem that Washington
bankers would like to have solved"
isn't really presenting any difficult SUD-
ject for their consideration.
There isn't any profit to a local mem
ber bank. in Offering paper for redis-
count in these days of money plenty,
and this is evidenced by the fact that
a little over s5,0Oo.000 represented the
total rediscounts of the system in it's
first week of existence. Probably this
rediscounting was for the account OF
southern banks, where the funds could
be employed at and 10 per cent, ana
therefore profitable. and not d dollar
from this city.
The real object of the federal reserve
law is to make an elastic currency
readily available in times OF stress ana
need Inelasticity was the only fault
found with the national banking act
there was no expansion to 1t.
A loss of $25.65 was shown to attend
a rediscount of $4,000 commercial pa
per in the article referred to. This Is
an inconsiderable sum in times OF
emergency-a mere nothing that any
merchant in financial stress would
gladly pay for the accommoslat tion, and
he would unquestionably reimburse
his bank and express keen satisfaction
at the loan at the same time.
In emergency money has risen in New
York on call loans to all kinds of high
to points where hun
dreds of dollars would be paid for
round sums like $4,000 to s25o.o00 for
a day or two days use.
There is one other supposition that
doesn't hold good in the argument.
Washington bankers are not accepting
unsecured notes for $4,000 from any
one. and the twenty e-thousand-doi-
lar notes offered for discount in Wash
inKton-commercia paper unsecured
are Just about as scarce as the former
IT is a fact that bankers have to guar
antee pavncnt of rediscounted paper at
maturity II tine maker desires an eX-
tension. a curtail would be expected
and new PAPER given for rediscount or
q substitution.
Big Disbursements.
Banks corporations. etc, VIII pay
out about $4,000 900 in dividend and