Evening star., 1917-03-04
EVANGELICAL AND OTHERWISE.
BY I, A, FLEMING.

BY I. A. FLEMING.
Indications are that the proposed
amendments to the federal reserve act,
advanced by the reserve board and
generally given Endorsement by advis-
ory council and the banking and cur
rency committees Of Congress. will go
by the board. in the jam and rush Of
business in the final session.
The amendment that is considered
most important from tho bankers
standpoint 10 the ono which would
require member banks to transfer the
remainder Of their reserves to the
regional banks Immediately, rather
than November 16, as required by the
law.
This amendment was counted upon
to shift probably $14o,0o0,ooO to the
regional vaults. on which member
banks would receive no interest,
Other amendments were expected to
gather in millions of gold. for the pur-
pose of controlling the movement after
the war, when there might be calls for
gold abroad.
With the situation calm and peace
talk dominant when these amendments
were suggested, the reserve board
hoped to make the movement OF re-
serve to regional centers without
causing uneasiness.
Other suggested amendments to the
law would have further regulated till
reserves of banks. and 1t was reported
that Chairman Glass would introduce
a measure giving bankers the right to
charge a dollar thousand on COL
lections.
Bankers would welcome the right to
retain their exchange profits. They
claim that post offices. express com
charges for collections. but they are
prevented by the par collection sys-
tenn Of the regional bank.
Mr, Glass is said to have expressed
himself as considering the amendments
sfdetracked for this session.
Unless there Is an extra session OF
Congress it will be impossible to ad-
vance the date of transfer OF reserves
Moreover, other amendments. II not
given consideration at this time, will
have to be reintroduced and run the
gantlet Of the committees again.
Farm Loan Matters.
Statements made public during the
past week of q probable sale Of farm
loan bonds to a syndicate of New York
and other bankers were not founded
on fact.
Obviously no bonds can be sold. until
after the farm loan banks have COM
menced making farm loans. for there
the mortgages taken on farms to secure
loans will, under the law. be the Sc
curity back of the bond issue. which
may equal twenty times the par value
Of the stock Of the land banks.
Moreover, the sale Of stock in the
land banks was not expected to be
successful from the standpoint Of pub
lie investors buying. The stock car
ries no voting power, gives no ad-
vantage to the holder in the matter
are matter for future consideration
and the surprise was that such a large
amount was actually sold.
Subscriptions were received through
subtreasurfes, post offices and through
internal revenue collectors.
The law creating the federal farm
loan board provided that the Treasury
Department should furnish the neces-
sary amount of capital for the twelve
banks. less the amount subscribed for
by the public.
Inquiries for farm loans have been
enormous. as may be inferred from the
expected placing Of s100.00o.0 900 of
the bonds during the first year that the
indicate as complete a success for the
measure as has attended the federal
reserve system.
...... Local Securities.
During the week there has been a
gradual lessening Of the volume of
business on the Washington Stock Ex-
change. especially in the bond section,
where but $4,000 face value were
bought and sold.
he fio11 frfh fad IN
the fact that banks are waiting for
government bond issue, which Is
looked upon as certainty of the i'm
mediate future. which will be well
come, as absolutely tax free.
The gradual easing of prices for
local bonds under moderate liquidation
may also be attributed to desire to
avoid the $40 Of l per cent intangible
property tax. which will become law
July /. 1917.
The general bond market is soft and
under pressure and no uneasiness need
be felt because Capital Traction SIS have
eased from around LOT to 05x-they
and other issues are still higher than
the average high-grade per cent is
sue.
AS a matter Of fact a bond is the real
investment, but there are many who
consider that the Capital Traction divi-
dend at the per cent rate is positive
ly assured--a bond Is an evidence of
indebtedness and ahead Of the stock,
which is q partner: hip interest.
On the basis of 105. Capital Traction
5s net the investor 4.76 per cent. The
stock Of the Capital Traction Company.
at SO returns 6.02 per cent. It would
cause small surprise II a number of
bondholders were shifting their invest
ments for the income, plus the differ
ence of $22 on face value Of 800 q
share. There are other local invest
ments showing comparatively good re-
turns from shifting Investment. but
Capital Traction is one example Of the
opportunity offered.
Then. too. the Intangible tax Is to be
considered; stocks of corporations
doing business in the District of CO.
lumbia, free; bonds. $40 of l per cent
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