Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-06-17
BY I. A. FLEMING.

The action of the Secretary of the
Treasury in making public utility
bonds, secured by first mortgage on
physical property, available as security
to the amount of Is per cent of their
market value for government deposits.
has been distinct relief to the banks
of Washington and has made the
financing of the liberty loan subscrip-
tions in Washington comparatively
easy matter.
that have sold at price to yield bet
ter than 532 per cent. This ruling
practically opens the way for the use
Of practically all the first-mortgage
utility bonds in the District, although
as a matter of fact only a percentage
of the bonds are up as collateral with
the banks; but this is no small amount.
probably more than s15,000.000. one of
the bonds coming under the restrictive
clause.
Washington has been the one strong
spot for utility bonds in the United
States at all times. 1t is not SO long
ago that Capital Traction SIS were sell
ing up around 1os. and Gas bs little
averages well above per cent basis,
even when like Issues in other mar
kets were several points under local
levels.
The largest issue Of bonds available
per cent bond Of the Washington
Railway and Electric Company. Of
which there are s11,643,000 outstanding.
A Popular Loan.
Estimates as to the number of sub
scribers to the liberty loan of 1917.
with the returns coming IN slowly.
have been placed at 100000.
For Great Britain's first popular war
loan, In November, 1914. calling for
$3.50 100000, subscriptions were re-
ceived from about 100000 persons.
Effect on Money Market.
The enormous expansion of credit in
financing the liberty loan has been par
TALLY rejected in the heavy rediscount-
ing of the national banks through the
federal reserve system, many OF the
maturities being for very short terms
The initial payments which the banks
have had to make with the regional
banks and subtreasuries have not been
a burden as yet. First payments were
but per cent Of the subscriptions, SO
that banks taking in installment pay
ments received much more than the
initial expenditure, while very many
subscriptions were received and paid
in full. the bank having to meet the
obligations on the Treasury schedule.
and also being permitted to hold sub
scriptions in the banks until funds
were needed, an indefinite term. but
long enough to make no important re-
financing necessary for some time to
come.
1t is known that Washington sub
scriptions were close to S19,000,000.
Pass Reserve Amendments.
The House of Representatives has
passed the Glass bill amending the fed
eral reserve act to permit a greater
concentration of reserves in the twelve
regional banks.
By the terms of this amendment
bank not in a reserve or central re-
serve city shall maintain with the
regional bank Of its district not less
than per cent OF its demand and 3
per cent of its time deposits.
In reserve cities member banks shall
maintain 10 per cent of actual reserves
against demand deposits and per cent
against time deposits. In central
reserve city the proportion is to be
10 and per cent. provided the act be-
comes a law.
Chairman Glass of the House COM
nittee on banking and finance said
that this measure would, IL enacted, re-
lease about $350.000,000 to the worka-
Bile reserves of the federal reserve
banks.
The measure also provides that the
federal reserve board may regulate ex-
change charges and regulate the col
lection Of checks by member and nom
member banks.
Another amendment opens the way
for non-msmber state banks and trust