The Birmingham age-herald., 1920-06-01
Daily Wall Street Gossip
BY HOLLAND.

New York, May 31.-(SpeciaD When the Secretary of the Treasury. David F..
 Houston, was chatting with the members of the Bond Club informally at their monthly luucheon a banking syndicate
 was ready to announce that it had at that moment purchased ten millions of I7 per cent convertible serial gold notes. These notes were issued by the Ohio City's Gas Company. That is corpora tion which has gained high reputation both for sagacity of management and for success. It is in control of over 5000 producing oil wells.
 Secretary Houston urged the bond men
 that they use their influence to stimu-
 late greater thrift on a part of the peo-
 pie and also to discourage the purchase
 of luxuries. The intimation was that
 something of this kind must be accom-
 plished if needed fresh capital is made
 available for American industries so that
 they may be kept in operation, larger
 production secured and the danger of idleness on the part of the employees
 averted. Nevertheless, the fact that a
 banking syndicate accepted this ten mill
 lions of per cent gold notes is spoken of as demonstrating that capital is avail able for investment in good securies pro-
 vided only that the rates of interest are
 sufficiently high.
 Then again, either while the secretary
 was speaking or few hours before he
 spoke, the city of New York began to
 make informal approaches to the bankers
 with view of learning whether it would be possible to market fifty millions of bonds whose life would be from twenty- five to forty years. The intimation this morning is that the city authorities have received some encouragement, although they were told that in order to market
 as large an amount as is proposed it
 m 0Crx- to at per cent, certainly somewhere be- tween and per cent. Should the city offer fifty millions in long-term bonds
 bearing. say 5A per cent or 6 per cent interest, the probabilities are strong of
 an immediately successful market for the bonds They would be especially
 tempting because the owners of these
 bonds might lawfully ignore the tax col
 lector. Capital is seeking more and more
 to make investment in good bonds that are tax exempt and that is often spoken of as one of the results of the some what faulty national tax law
 THE DAY OF EXTRAVAGANCE From Secretary Houston there came information which justifies the suspicion that In the year 1919 the American peo- pie and particularly that part of the people who have been receiving large wages indulged in extrava gance to an alarming extent. The secretary has ha i opportunity to run his eye over the tax returns of 1919 and it did not take a very exhaustive examinHion for him to discover that there were expended in the United States in that year not less than twenty-two billions on luxuries alone Probably year from this time he will not be able to make a report of that kind because the buying of luxuries has greatly diminished and in some cases has been almost completely ended If one-auarter of the money which was spent in luxuries had been saved it could have been utilized in investment in government bonds, perhaps thereby preventing the depreciation of the Lib erty bonds. and it would also have gone