The sun., 1918-12-02

OOO,UOO issue, maturing within five OF
ten years. The chances are that It will
be quickly placed with a public which
has always shown a partially for shor,
term securities offering a fairly gener.
Gus interest rate and backed by a strong
borrower. The Treasury officials have
not convinced themselves that II would
be we'll for them to provide for continu-
Gus sales OF Government bonds, as ha,
been done so successfully in Great Brit
ain. The probability is that the forth
coming loan will involve a three weeks
selling campaign, and that there will be
again nationwide distribution of the
bonds 1t Is an interesting proposal, and
although the issue is a largo one the
probability is that the bond market by
that time will have broadened so mate
rally as TO make II easy for the Gov
eminent TO place the loan at an income
basis very near that observed in the
case OF long term bonds. The prelimi.
nary sales of certificates In anticipation
of the larger offerings will call for q
semi-monthly investment by all the
banks and trust companies OF the coun.
try amounting to cts per cent. OF theli
gross resources.
This system OF short term financing
adopted by Secretary McAdoo has beer
most ingenious. An important achieve.
ment of the system has been the cooper.
alton OF large and small banks every.
where in a nationwide plan TO helr
finance the Governments war OUTLAWS
The seven issues OF these certificate,
which preceded the offering OF tn,
Fourth Liberty loan were placed with
23.s90 banks and trust companies. a,
well as with 922 corporations and in
dividuals. Nothing like these system
attic investments by virtually all tn,
banking institutions OF the country hav,
been seen before in American finance
They have brought together an I'm
mense number of small banking insti
tutions which never before participated
in the flotation of a great Government
loan. The operation has been immensel,
helpful. therefore. in giving the countr,
bankers some realization OF their re
sponsibility in helping the Federal Gov
eminent finance the huge OUTLAWS OF III,
, great world war. In view OF the success
of this experiment something ought &
be done by tho Government officials t
retain this machinery for obtaining ma
tionwide banking cooperation in placinl
, large Government loan The result
: show that the country bankers are full.
: as patriotic as the city bankers, II the,
are appealed to intelligently through
request 70 make systematic investment
, in Government bonds.
Relaxing Market Restrictions.
1t is clear also that the general vv,,,
} market has been helped by the absorp
ton OF the four separate Liberty Loal
issues by about 30, o00.00o individual In
vestors who never before knew what 1
ment bond. This means a good dea
more than that the Liberty bonds hav
been placed with one out OF every fou
, of the population OF the continental
, United States, The conspicuous achieve
, ment has been the education OF tn
general public IN the value and con
, venience OF bond investments. TIL
, United States enters the reconstruction
period, therefore. with the strongest po
: tential bond buying public in the world
as there is little doubt that this countr.
: has surpassed France as the creates
, nation of bond buyers. Action last wee
by the Money Pool Committee in ex
q empting from present restrictions gov
= erning advances by banks upon stocl
= exchange collateral all such loans a
: should be based upon the pledge o
= bonds or other interest bearing obliga
: tons purchased after last Saturday Wi
, also be of distinct help to the bon
. market. Although this ruling does no
( have the effect OF enlarglng the loanabl
e fund based upon shares OF stock,
o makes available as collateral very larg
= holdings OF bonds and short term note
r in the vaults of the bond dealers an
= others who ordinarily accumulate ut thi
v season heavy aggregate holdings of thes
+ securities for the purpose of meeting tn
{ retail demand" for bonds from tn
/ rank and file OF investors The move
r therefore, Is OF Importance to the hon
= market and will promote the distribu
= ton OF bonds among little investor
= everywhere.
n This move by the Money Pool Com
n mittee to relax its restrictions coverin
z loans TO brokers and other borrower
h upon Stock Exchange collateral show
I that the money situation is less tens
a than II was before the Fourth Iibert
Loan was placed with 100000 in
i vestors. The stock market was natu
| rally cheered by the announcement. ro
g because il enlarged the credit facilitic
o for speculative borrowers, but for tn
II reason that It marked the gradual let
e ting down OF the bars which have s
t long restricted stock market activity
Y These restrictions will be gradual
o abandoned. as tho end OF the year en-
= gagementa have been provided for an
:, progress is made toward providing tn
. Government with what remaining ac
i commodation II needs in closing up II
z historic war enterprise and the inc
}. dental expenses which 1t has involved.
y This has been tho most successfl
g money pool committee that Wall Stree
l. has had largely for the reason that
y has been operating under Governmer
L protection. 1t has been an emergenc
e committee which has done remarkabl
: work In an extraordinary money markt
u crisis, This latest move by the con
u mittee will enable the Stock EXchang
- houses TO extend their investment bus
9 ness, which usually reaches largo pre-
v portions In tho December markets A
= though borrowers have been warned tina
!, should these modified regulations resu
- in an important expansion OF Stoc
: Exchange loans II may be necessary
| enforce the old rules again the prot