Evening star., 1920-09-12


ment gradually materializes.
The money strain is not over-the
work of clearing the tracks is going
forward as it should. slowly and grad
ually, the while close watch is being kept
on the uses to which loans are being
put, and all speculative enterprises CIV
en- the cold shoulder.
The era of wild spending is at an end.
Merchants tell US that the silk-shirt age
is past, which means that the great
American public is again Influenced by
saner ideas, is not as regardless in the
matter Of expenditures. and is again
giving attention to the matter Of thrift.
therein being promise that money will
be easier as the days go by.
It is difficult to view some Of the ex-
listing conditions with full hope in the
future, no matter how true your abid-
ing faith in Americanism. All one can
do Is to have faith that sane and safe
counseis will prevail. as against the re-
verse advice of radicals.
No Money Panic.
There will be no money panic. For
tunately that. according to the lead
ing bankers Of the country, is beyond
consideration. It Is also admitted
that but for the existence of the
guaranty against it, namely. the federal
reserve act, we would be in the midst of
a serious panic at this time.
The federal reserve act points the
way for the full liquidation of assets
when necessary and thereby precludes a
panic.
Money conditions have been brought
about by wars losses. wars destruc-
tion.
In time the abundant harvest,
fortunately safe and large. and the
savings of the American people will
restore much of the needed new
capital to encourage enterprise and
aid in the gradual restoration Of nor
NAL times.
The low Of gold from Europe at
this time, in anticipation of maturing
foreign loans and in an attempt to
stabilize the pound sterling. is a great
aid to the situation.
The condition of the United States
Treasury has been a source of con-
slant withdrawal from the usual en-
Payments of money-the change in
the method of making income tax
payments from annually to quarterly
has caused much borrowing on the
part of the government-antici
its resources for months to come and
using actual loans of the public and
the banks to finance it's needs
Therein lies one of the potential
causes of the restricted supply of
funds.
The great majority Of local bankers
affirm that they have cared for es-
sentials at all times. and most of
them assert that they have held to
the s per cent rate. There have been
many exceptions to the last-named
proposition.
One thing bankers have cut out. and
that is the purchase of commercial
paper, despite the handsome profit Of
fered in it's purchase: they are not
nor are they loading up to any ex-
tent with Treasury certificates.
Need of LiQuidity.
ditions, claim that they must needs
maintain their liquidity and be pre-
pared for conditions as they may de-
veiop, and this is one reason why
there is SO much complaint regarding
the inability Of real estate operators
to meet the housing needs OF the city.
Moreover. unless conditions improve
unless the savings of the people in
crease at a fast rate-there may be
some local trouble ahead on mort
cages.
The flow of gold from Europe, in
anticipation Of the payment Of the
$500, ,000. 600 Anglo-French bonds and
in the efforts OF Great Britain to cor
rect the exchange situation, is at this
time fortunate and will help mitigate
the strain.
Banks have been encouraged some
improvement in bonds. The losses Of
these institutions through the severe
break in bonds. liberty issues no less
than railway and corporation bonds
have been enormous.
Some fiscal institutions have brought
their bonds down to market values
on their books and may now mark
them up, but the recovery has not
extended sufficiently to permit OF any
great recuperation.
Seek Savings Increase.
The needs of the housing situa-
ton in the large cities have given inn
petus to the movement for enlarg-
ing the facilities Of the postal saw
ings system. for removing restric-
tfons and for increasing the rate on
savings.
Eugene Meyer. formerly head of
the War Finance CORPORATION. is
sponsor for the suggestions and the
expressed belief that q high rate of
interest would bring out two billio1;
of dollars.
Just how much Of this sum would
come out Of the savings banks Mr..
savings institutions today that are
now paying less than 3 per cent on
savings. and the deposition who has
money to place for stated period
nave no QlIQculty IN obtain.
ing 4 per cent.
Mr.. Meyers estimate. regarding the
money that would be brought out by
changes in the postal savings law, is
entirely too large If he means new
money. else boarding is going on at
q great rate in the United States, and
this does not seem possible.
Local Security Situation.
So confident are the friends of Rail-
way preferred shares that the ad-
vance in the price OF Potomac Elec-
trio current will enable the Washing
ton Railway and Electric Company
to pay its preferred dividends with
regularity that the stock had ad-
advance OF u cent in current may be
sufficiently helpful to accomplish the
desired end, and the directors inter-
viewed on the matter expressed the
sincere hope that such was the case
The Potomac Electric Company will
fmpound v cent less than
it has been doing for nearly two
years. There is in the fund belong
ing either to the consumers or to the
Potomac Electric Company something
over $1.500,000 with interest at 6 per
cent. It Is understood that this fund
is largely invested in liberty bonds
II the court should sustain the claim
Of the company on its valuation, this
big sum would warrant an extra
dividend.
Both Of the street railway COM
panies admit that under present rates
they are making money. With assur-
ance that the preferred dividend of s
per cent can be maintained. the price
of Railway preferred stock should
show an advance OF perhaps 10 to
20 points.
Some operators have expressed dis
that there has not been
more response to the 6 per cent stock
0f the Canital Traction COmpany. but