Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-12-08
BANKERSD|SGOsS.
RA!7E0NNEWISSQE
Lessons Chances for 4 Low y
ering of,Discount Rates by:
-. -, Reserve Board. :: = -
BY Il. A: FLEMING.

Local BANKERS fre6fy discussed tne
interest rates or the new issue OF
Treasury certificates ANNOUNCED. as
expected. last evening by the Treas
ury Department. g.. q. -.. q
Some surprise was expressed at the
per cent rate on the longzterm. one
commenting on thevexpscted early re-
ductfon of federal reserve discount
rates as hardly possible now. with
the. Eovetnmert a borrower at the
high rate There has been every in
dication that the reserve board was
considering the reduction of the dis
count rates, and announcements to
that effect have been expected.
The hi half-billiop certificate issue
is to be dated December Is and ma
ture in six months and one year, the
short-term investment bearing 5%
per cent interest - = :
While sos, 100000 certificates avail
able for income taxes mature Decem-
Der 10. It does not mean that the en-
tire Issue will be used in Iianidating
obligations of this character: no
doubt many of.thesa certificates have
been, held by investors, who ma re-
invest iH- the ne~ issues. -,
The 6,.per cent rate was taken as
expressive of the belief by the Score
tary, OF, the Treasury that the big
blQck 'wahld not have sold readily at
lower rate, * e. :. - =,
That: the high rate will cause nn.
the .rest.-of the year. is generally be-
lieved as following the 18th ,financ-
ing will Come the continued prepara-
tons for January l. when some $685.
ooo,000~v be disbursed by corpora
lions IN dividends and interest, to the
probable relief of the money. market.
Did Hot> buy Tax LCertiacates.:.,
1t is possible that many merchants
and others did not invest their, tax
money in certificates. but purchased
more stock in the early days of 1918.
10 their regret. Investment of re-
serve for taxes in TAX available GER
uhcates is especially desira BILE and
safe.
local Banks Will Buy.
Washington banks will take their
quota of the certificates both for invest
ment and as distributors There are
so many avenues of Investing money
= these days that those having unem-
ployed funds may take their pick ana
at better than per cent, but not in
investments with the preferential ad-
vantsges Fof theTreasury certificates.
The frst local order was from the
Riggs NATIONAL Rank sent in last
evening, for $500, 900 of certificates.
TRANSACTIONS in bonds to the face
value. of $4,000 furnished the chief
business on today's session of the To-
cal stock exchange. = 49, 49, =
Railway Is seem toll be favored AT
5s5S and SO. Potomac Consolidated
5s were taken freely at s21s. while
Washington Gas IS sold-sparingly at
IS. to ;73Ss y
Stocks-were slow and practically ur :
changed. Continental Trust shares
soha AZ 10 and a little American Ma
tional at 10.
WIFI street Digest. 49,
Ca, Morse, discussing market con-
ditfons on Wall street. has this to say:
The market Is in q period of COM
parative <qAiet. Which ought to bring
much good. -Utgent liquidation has
Investment absorption is in prog
resa 70. > greater extent than gener
ally appreciated. Current prices of
many Industrial stocks are lower than
WARRANTED by stagnation of business
Of the last six months. when we con-
and the first half Of 1920. Corpora
ton, borrowing for tax purposes or
otherwise has probably seen its maxi
The short interest .. the market
generally il large. and it ought to'be
factog.of importance in the mantle
nance. of a fairly stable market from
the present- basis Of Quotations
Asore spot has been with the fer
tilizer and Chemical concerns. It was
YttSC lSthn ~ y
ginfa- Carolina Chemical Company
hadIto ask for new capital. lit seems
likely that American Agriculture will
cut IT'S dividend in half temporarily.
II is said the board is not. entirely in
unisens7 There has been no indica-
tione YET in official circles. Df. any
change in dividend policy Fhe COM
pany is strong. currently. and 10 not
borrowing more than usual at this
season from the banks. but is trou-
bled as much as other concerns in the
sAmea4fl1e by the slowpess yof pay
mepeof, bil}s by its trade. -. $50
Heading tacts an though its plan
would eoe41be promnigated1coyerin
it's dfsgEnnberrlept.3 Legal opinion
distinctly aSora purchase Of the pre-
ferred stocks. The argument we hear
most generally is that the throwing
of the Reading case into court has
terminated Ithe right of the company
TO consider Ahe rights of the pre-
ferred stocks OF claim. in dissolution
as junior to those of the common.
New York Central and Rstumor re: and
Ohio are to gain merely in the Read
ing operation Pennsylvania In the
same way will stand to benefit from
the Southern Pacific oil deal and from
the possible segregation of the Poca-
hontas Coal Company from the Nor
Holk and Western"