The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-11-03
new LIBERTY BONDS
ON EXCHANGE LIST
Trading in Fourth Issue Sane
toned by New York Fed
eral Reserve Bank.
WILL BEGIN TOMORROW
Securities Must Be in Sellers
Hands and Sold Only
for Cash.
WILL BEGIN TOMORROW

Initial trading in the new Fourth Lib
erty bonds will begin on the hoor OF the
New York Stock Exchange tomorrow,
sixteen days after the close Of the cam
naign, according TO announcement made
Yesterday by George W. Bly, secretary
OF the exchange. en-.
The perfn ission to start trading was
granted by the New York Federal Re-
serve Bank following the receipt OF IN
structions from Washington. where II
was found that this district had paid for
Go per cent, or approximately s1.9oo,-
ooo, 900 OF It's $4,000, 100000 Subscription,
and that the entire country had paid
for ciose to 40 per cent, or se,I5o.noo,-
600 OF It's entire subscription Of ss,sss,-
oop, 900. This leaves. according to M
official figures. only $500, 00O, 900 In this
district and $4.l00, 900, 900 in the entire
country, amounts which are more than
half covered BY, outstanding certificates
OF Indebtedness, which assure the future
payments without financial Strain OF any
sort.
Dealings tomorrow will be for Cash
In the regular way. the latter method
being the same as that which governs
the purchase and sale of all securities o.
the floor OF the exchange The seller
OF the bonds must have them actual"
on hand In order TO dispose OF them. be-
cause transactions In which the seller
promises delivery IN two or more days
will not be couhteranced.
Transaction in the bonds are also eT-
pected to be started on other stock e%-
changes throughout the country. There
Is much speculation in the Wall Street
district as to whether the bonds will omen
at or under par. the feeling being enter
tanned in many quarters that small
minority of subscribers took the bonds
out of a desire to aid in making the loan
campaign a success.
Trading IN Third Issue.
Initial trading in the third loan bonds
started on May 10. The first transact
ton was at 9o1o and the extreme do
cline on the first day was 100. the price
being 9s.40, which was equivalent to
$3.50 on Sie0 bond and 1884 on
81 .080 bond. At that time, the war sit
uation WAS vastly different and the Ger
man drive appeared to be a success Tho
auspices of trading in the new bonds,
which greatly augment the number ot
Government bonds outstanding, are par
| tl'uiaFty anu tiic III St udN - - ~
ing will be watched with widespread IN
| terest.
Bankers commented YESTERDAY upon
| the highly successful first payments on
| the Fourth Liberty Loan. They de-
clared the payment of $1,000, 600. 400
when only 5000, 600, 900 was required 10y
/ the terms of the loan was a reu nrhah'e
| tribute to the financial resources of thIs
| district. being accomplished rs it wa1
| without financial strain Of any sort \
day or two before October "a ques-
| ionnaire was sent by the Fedora! Reserve
Bank to each bank of the district. Tie
reply showed the amount OF each sub
| scription and the manner of conten-
plated payment, whether with book CRED
| its. cash or certificates OF indebtedness
with this information at its disposal
| the Federal Reserve Rank of New York
| arranged the $1,000, 5000 aggregate
4 transaction with a minimum OF dis
! turbance. without n fluctuation in money
rates and with a minimum loss OF inter
es. on account of the payments. OF this
| huge total only about rs to 30 per cent
was represented by certificates of in
debtedness, and the 20 to IS per cent
| balance was divided between cash pay
ment and book credits.
At no time was there n hampering Of
the maximum amount of funds aveila ole
| for Stock Exchange transa ctiops, and
| Win tne complexion OF tue initial I'N-
ments there has been witnessed a tenn
porary decline in money rates 10 Pee
cent. How the financing was accom-
plished was best explained by thC pln'-
phlet report of the Federal Reserve Ban.
OF New York for 1917. which dealt WITH
| the much smaller totals that prevailed
a year ago. The earlier payments. how
ever took the kink out of the machinery
OF Liberty Loan payments and enabled
| the successful contamination OF tNs
! transactions that have just been ,'osm 7.
Convention of Credits.
| In this report the bank asserted tGat
| each actual issue OF Liberty hon 's IN
| effect merely converts short bank credits
| into long Investment credits. This, tine
! report says. explains the minimum NJ
disturbance to the money market from
the absorption Of maximum loan OF
| GRAFTON The report continues:
In order that payments for tho largo
| amounts of certificates OF indebtedness
| subscribed for in this district might not
! disturb the banking situation arrangs-
ments were made to redeposit as large n
portion as possible of the funds paid IN.
| This, in effect amounts TO payment
for the certificates by credit on the
books OF the subscribing banks, and in
later issues this was the practice actually
| pursued.
I'm this manner disturbance to the
money market from the ABSORPTION OF
this large volume of certificates was re-
duced to minimum. The Federal Re
serve Bank itself purchased from time to
time various amounts of these certin-
Gates of Indebtedness from banks and
bankers, and on several uccasonG al
vanced substantial amounts to the Urea Sc
ury for temporary requirements through
the purchase of special certificates run
ming for few days not included In tho
totals as tabulated. The sale OF certiil-
Gates of Indebtedness in anticipation ~
both Liberty Loans enabled the banks 20
create the short credit required by the
Government I,-n,ling the creation of long
time credit through the purchase 81
bonds by investors. With each issue u,
bonds the short bank credits were IA
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