Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-03-24
RETIRING PLANS
FOR WAR BOND
Time Not Ripe Bankers Say, for
Conversion in Lower In
terest Issue

Freylinghuysen, Of New Jersey, All.
thorizing an issue of $50 O,OO0, 900 900
fifty year tax exempt 31s per cent
bonds for the purpose Of retiring
bonds of the first, second, third aud
| fourth Liberty Loans, was being dis
,cussed in the financial district yestcr-
day. AS rule, criticisms were against
the proposition, although It is ac-
knowledged that something of the kind
must be done eventually, but that the
time Is not ripe for IL yet.
One banker said he believed the bill
was introduced as feeler. to start
a discussion as to what action will be
taken in the future. He said, in his
opinion, the low interest rate of 3la per
cent would only appeal to very wealthy
| people, on account Of the tax exemption
feature, but that this class is very
spsll and is now loaded up so that alb
sorption from that source would rep
'resent very small fraction of the tota
issue.
Another banker said that with Lib
erty issues now selling at prices &c
yield over 5 per cent, the funds OF the
comparatively small investor would moi
he attracted by 3lS per cent rate ant
the stupendous size Of the transaction
under present conditions would bt
doomed to failure.
A. well known banker and broker sait
he anticipated that such a move vii
bave to be carried out some day, bu,
we must wait till money is more plenti
full and cheaper before we attempt such
conversion on the scale on which II
would have to be carried out.
The prevailing impression was tina
Senator Frelinghuysen was merel,
paving the way for a wider consider
alton of the subject.
A we'll known banker said what wal
needed more at present was rear
rangement of our system Of taxation
and this should be brought about, h
remarked. before we attempt to fun'
our outstanding war debt.
Some finaDciers are curious to know
/ how much of success. or failure. tn
last issue Of certificates of indebtedness
has been. 1t seems to be pretty wei
known that the Treasury was anxiou
to dispose Of $500, 900, 900 or $3.50,
600 900. Bankers were trying to arriy
at an approx innate through figures pub
lished in New York of government de
posits in local banks there during las
week, they concluded the subscription
to certificates of Indebtedness were ap
proximately 500, 900, 900. On this basis
the total subscriptions in the lively
Federal Reserve districts would b
around $50 100000
A banker. when talking of the popu
larity of former issues of certificate
of indebtedness, said he could have sol
Yesterday over 81 100000 of the De
cember maturity If he had had them
There is a good deal of disappoint
mont expressed In the financial distric
over the inaction Of railroad bonds an
stocks. 1t was expected that imme
diately after the passage OF the Esch
Cummins bills the railroads would tax
the lead. and this was encourage
through temporary activity, whlc
died almost as soon ms is was born.
A banker when discussing this ,Aues
ton said he did not expect much i'm
proycment in the railroad situation Il
the present differences over the bas
of rail valuation is settled before tn
| Interstate Commerce Commission.
On one hand. he said, the repre-
sentative Of the Association of Rail
| way Executives thinks that propert
investment accounts aud material an
| supply accounts should be accepted b
| the commission as minimum for th
present. as the data now bein
gathered by the commission for valua
tion purposes is incomplete.
| This representative, he salt
1 acknowledges that there may be son
over statements in these figures. bl
says they will be more than offset
the increases in values of the last tW
years.
On the other hand. the representa-
u tive Of the employees who favors Il
= Plumb plan opposes the above plal
says the property investment accoul
is of no Importance, and denies th'
an immediate valuation of the roat
by the committee was intended in Il
bill.
A third party to the rontrovers
is the representative of the Associa
ton of Owners of Railroad securitie
who agrees with the first party on II
matter Of valuations. and as yet Il
shippers and state railroad commits
sioners. who are supposed to reprcsel
the public. are TO be heard from.
In view of all this. he said. and
the possibilities Of long drawn OF
arguments over this most vital part
the bill-the valuations on which Il
rates must be bascd--hc said he won
not look for any sustained advan
in railroad bonds. or activity in raj
road stocks, till final decision wou
be reached.