The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-15

100 per cent. efYicient because OF the
splendid facilities of the Federal Re-
serve system and the creation OF .
well organised discount market In this
country which those facilities have
made possible.
Loans to Spectators.
In such q situation It stands to rea-
son that the banks are not In . posi-
ton to make large advances upon
Wall Street collateral for the purpose
Of supporting an excited speculative
campaign. No clear headed banker
would think of financing such VEN
turs At . time OF worldwide complies
lions with a daily expense bill for war
needs surprising all similar OUTLAWS
Of the kind. The probability IL that
private investors will soon Join with
the banks in purchasing the Govern
ment's short term notes. The Federal
Reserve Bank Of New York In its
formal statement last Thursday urged
non-banking corporations and individ-
uals to purchase tho Treasury notes
through their banks, saying that this
course was suggested for those de-
Snhs W thshe SHUT toTm ihVes1neh's
OF thoir surplus tunos or preparatory
investments IN anticipation OF tneir
subscriptions to the fourth Liberty
Loan.
S.ll;n~ IN puhl;. D;,.ct.
This shows that the Government
has entered upon the most comprs-
hensive programme Of urgent hnanc-
A tax exempt short term note, backed
oy the rlcnest government IN the world.
ana available IN denominations as low
az teoo, should nnd q broad market
IN this country. The Offering of these
securities means that intending sub
scr1oers to the fourth Liberty Loan.
which Will pay ~ per cent. can
make their subscriptions at this time
through the purchase OF an equally
safe Government security paying ~
per cent. and receivable at par In pay
ment for the longer term issue. The
new Government notes thus come in
direct competition with short term
corporation notes yielding q much
higher income return but exposed
to Government, State and municipal
taxation. This new phase of Govern
ment financing brings into the market
immense issues of the highest grade
short term securities of the tax ex.
empt class. The Treasury will make
later on, as Secretary McAdoo SAYS.
to "the general public directly" an
| offering of 32,000,000,O00 Treasury
| notes which will be acceoted in nav.
ment of taxes.
I.
Sev'"ss oAn3 Dspositors.
An interesting question concerns
the attitude of the 100000 savings
depositors toward these short term Gov
eminent notes. which pay one half per
cent. more interest than the savings
banks pay. The probability is that
some funds will be withdrawn from
the savings banks to invest in these
he Iarrs TIT. 4. hsoanss -, WIN a,, no'
age savings depos,tor desires to have
his money within easy reach so that
he may withdraw It at pleasure. The
New York city savings banks At the
! opening of this month held within
$S,Sl2,724 as much deposits as they
reported a year ago. This in a year
when the Government has sold SO.
0o0, 900, 900 Of bonds besides large is.
sues OF war savings stamps and Treas.
ury certificates is a remarkable show.
ing, and indicates that the general
advance in wages has made 1t posi-.
BILE for the average worker to finance
subscriptions to the Government loan,
and contributions to war charities
and accumulate In addition a consid-
cradle savings fund for resort to In
case Of emergency. While the saw.
inss banks Of this city have sus.
tanned a small loss in volume Of de.
posits compared with year ago, they
have gained 1880 new accounts. The