Evening star., 1920-03-23
DEMAND FOR CASH
CONTINUES HEAVY
Investors, Merchants and
Traders Compete for the
Offerings.
BI I. 4. FLEMING.

Washington is beginning 10 feel
the pinch of monetary conditions.
with every accommodation that has
been cared for at the top OF the legal
limit. for many months. while in
New York city time money is beins
held at 81. per cent. with very little
new cash coming into the banks.
1t is not at all strange that this
should be the case when so many in
cestments of stable character are
offered in the market at better than
6l2 per cent.
business institutions are seeking
accommodations with more or less
freedom: the great activity in the
stock market is absorbing surplus
bank funds on sharp call loan at
high rates. anywhere between : to .
per cent. and with bank scceptances
formerly quoted between and ) per
cent. now up to TO a.per cent.
Over in London call money is per
cent and time money SIS to 7l2 PEI
cent.
Obviously money will continue =;
high rates for a prolonged period. the
high prices of all products tending
to enlarge the credit needs of bust
ness institutions.
1t is or should be matter OF con
graduation to saving bank manage
ments that the deposits OF these insti-
tutions have been maintained at an
ever-increasing pace. when practically
every one of the liberty bond issues
| is selling below the going rate Of
interest paid by the average savings
! bank that is north of the Mason and
Dixon line.
And for the average savings bank
depositor. liberty and victory liberty
loans are all tax free.
PrOlongs Free Period.
The failure of the peace treaty to
reach ratification prolongs the period
| when certain issues of liberty bonds
are free of all taxes, until two years
after the war
Referring to the talk OF issuing gov
ernment bonds to assist Europe, or
giving backing to such movement,
the Wall Street Journal OF today has
this interesting comment:
Except at an interest rate which
would shock the community more
than the government borro wing itself
the United States government can
not raise billion-dollar or any
larger loan for itself. Even il 1t Of
fered 6 per cent. the effect upon the
! sec. .000. 100000 of government indebt
edness outstanding would forbid il.
| The loss on the liberty loans to the
! small investor is so serious that II
would dangerously damage credit TO
| increase it. Any money offering in
II
utterly insufficient to meet the de-
| nands of private enterprise. The
urgent needs of the railroads alone
/ are sufficient to absorb all the pri
| vate investment money offering and
much more for an indefinite time to
! come
! Guaranteed by Canadian Government
! A bond issue of more than average
| interest was announced this morning
; in the fiotation of S12,0o0.0oo 51a per
cent gold notes by the Canadian
Norther Railway Company. carrying
with them the guaranty of the Do
minion government. The notes are
| callable at 101 and are redeemable
| Sc, 900. 900 December 1. 1922, and the
! balance December /. 1924. Investment
bankers speak highly of the offering
| The company covenants to pay per
cent of the normal tax in the United
! States.
| Local Securities.
| Business on today's session OF the
local stock exchange was very much
restricted a few odd lots cbansn
hands without especial change IN
values.
Mergenthaler was decidedly firlncr
| at 1876; Lanston nominal, with s. bid
and S21h asked. a few shares OF
! American Security and Trust Com
pany stock brought 235. After the
! regular call a small lot of Capita!
Traction sold at S65s and one of Rail
way preferred brought 51A.