South Bend news-times. (South Bend, Ind.) 1913-1938, 1919-10-05
MONEY AND
FINANCE
Large Financing Withheld
Pending Outcome of Strike
Money Will be Fairly
Plentiful and Rates Easier,
Bankers Think.

Tlentlful ana Rates LASER, |
Bankers Think.
While more new securities have
been offered lately than during the
summer months, much large fnan-
cling has been withheld, pending the
outcome Of the steel strike one
notable exception is American Tele-
| phone and Telegraph company Sc
curities 10 the amount Of $50, 600, 900.
October maturities OF corporation
! notes and bonds total only about
( $35, 900, as compared with S73.-
100000 for September and $4,000
I 600 in October last year.
The conviction holds in banking
circles that money will be rather
/ plentiful and that rates are destined
20 work back toward their normal
/ level soon. Owing 10 crop shrink
! age and a generally prosperous con-
/ dition. the midwest has been able
I TO finance the crop movement with
out aid from eastern centers, and
without strain. Bank DEPOSITS re-
main very large and Chicago Fede-
l raj Reserve bank reserves have been
| the largest since its founding. De-
| Ginning prices will tend to ease the
monetary situation, as high rates
are due partly to the vast amount
| Of currency and credit required in
the transaction of business at war
inflated levels. Time money rates
! have been steady TO firm with rad
| been erratic, holding mainly around
six per cent with upward spurts to
! eight, ten, and even Is per cent on
! occasion.
Exchange Turns Down.
] After exhibiting a stronger tone,
! foreign exchange turned down again
Bankers have been pessimistic, fore
! seeing movement TO yet lower points
, than any hitherto unless credit is ex-
tended An interval would elapse
! before even the Edge bill, for some
time under consideration in the
! house. could become fully operative
Meantime private corporations. not
ably the equipment companies and
/ those represented in the Mississippi
| Valley association, which has dis
/ cussed erection of a foreign discount
/ bank, talk of extending credit in
| limited amounts. To produce quick
| action leading bankers urge that the
| War Finance corporation, under gov
! eminent amendment, lend to foreign
| borrowers in good standing who can
/ furnish the endorsement Of foreign
/ banks and governments, if need be-
The $1,000. 900, 600 fund. which con-
| gress made available for credits, has
/ been little used, owing to provision
that loans must be limited and made
only through American corporations
/ which affix their endorsement.
The prime factor in strengthen
/ ing exchange has been the govern
ment's announced willingness TO dis
cuss means of Transforming the So
! 600, 600, 600 short term foreign cred
/ its now outstanding into long term
credits, and debiting the interest.
/ Unfortunately this latter step would
plunge Europe still deeper into
debt, and might shake the confidence
/ OF American investors, who will be
! called upon to purchase foreign Sc
/ curities. Admittedly il would relieve
| the monetary stringency abroad, IA
| cilitate the purchase Of American
goods. and perhaps, by demonstrat-
/ ing official confidence in Europe in
! duce credit extension in other forms
/ by private interests. No plans TO re-
duce the 100000, 600, 600 debt have
} yet been formulated.
Government Finance Goods.
The present state OF government
| finance is more the subject Of con-
graduation than at any time since
| the armistice During September.
because Of income and excess profits
I tax payments, ordinary receipts
| largely exceeded ordinary and spe-
| cial disbursements, reversing August
| figures. There remain no maturing
| certificates of Indebtedness to pro-
vide for prior TO 1920. Certificates
maturing Dec. Is, are more than
covered by tax installments then due.
| The decline in government expen-
/ ditures will have a beneficial effect
upon prices. Large. continuous, and
even profiigate expenditures were
chiefly operative in initiating prices
and wages. Government demands
! superinduced a shortage, which il
Will now be possible to relieve. Pri-
vate industries can buy without ex-
travagant upbidding of prices.
Since the armistice the government
has retired $4,000 900 in bonds
! from sinking funds and repayments
! OF foreign debt. Secretary Glass has
| announced that issuance of treasury
! certificates will be discontinued in
I favor OF tax certificates. Easier
money should reflect this policy.