Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-09-08
TREASURY CALLS
: FOR MORE MONEY
Wants 20 Per Cent of Bal
ance From the August Ger
tificate Sale.
BY !. A. FLEMING.

bI j. n. FLEn1N1s
The Treasury this morning notified
banks holding proceeds of the August
Csrtncate sale TO pay into the Treas
ury tomorrow 20 per cent of the bal
ahce OF the proceeds of the sa lie re-
manning in the banks to the credit
OF the war fund
Coming Immediately on the heels OF
yesterdays call for 40 per cent of the
balance, and this right on top of the
nrst call for 40 per cent of the pro-
ceeds, indicated the need of the Treas
ury for funds and further reduced
the available cash in the banks
Many banks did not participate in
tne purchase of Treasury certificates
alter the Treasury had increased the
rate 10 per cent. Dut their Gus
toners dld and their purchases were
sufHeientiy heavy to make serious
inroads on deposits, some even bor-
rowing money for larger participa-
uon IN the purchase of certificates.
although the lending rate would offer
no opportunity to make such a ven
ture profitable.
Less than so per cent of the August
ceFtihcate sale proceeds remains with
ens banks and this may be called be-
iore the 18th instant, when a big
oiock OF certificates is to be paid
Local bankers had hoped that thew
Mlsht retain these funds until after
In. nr. next call by the controller of the
made within few days Last year
Inc call at this time was for Sep
1ember IL: 1t followed a call for
June so, the same date as the most
recent call.
Thousands of government employees
nave left the city, to the loss. of
their deposits: many Army men have
been separated from official duty or
sent elsewhere and their accounts are
also lost to the local institutions.
Some of the banks report slightly
increased deposits, but the call when
II does come will show a loss of sew
eral millions of dollars in deposits.
1t is also a fact that some of the
government employees are sending
money home for deposit. in banks,
seeking a greater rate of interest
than Washington institutions are
paying.
Comment ON Call Money.
The National City Bank of New
York, commenting on call money, has
this to say:
The call money market is supplied
with funds, owned by individuals, cor
porations and banks, which are tenn
porarily available, but which the own
ers do not wish to tie up for def
mite time. In the aggregate there is
always a large amount of money
waiting for some purpose. but from
day to day unemployed; this is the
call money fund, but naturally it is
shifting and ffuetuating continually.
1T comes from all parts of the coun-
try and important sums from the
Canadian centers- The loans are Sc
cured by collateral and made through
brokers, upon the express condition
that they are payable on demand
There are no other relations between
borrowers and lenders. The lenders
wish to keep their funds absolutely
at their command, and the borrowers
understand the terms, but depend
upon their ability to obtain accom-
modations elsewhere by raising the
rate if necessary. 1t is theory in
the call market that money can al
ways be had at some rate sometimes
call money is obtained at less than
the prevailing rate for time money
and that has been the case during
most of the past, month: sometimes 1t
commands more depending upon the
state of supply and demand
withdrawal Of Funds.
The lenders at call withdraw their
funds as they want them for other
uses. and when the Withdrawals ex.
coed the new offerings the interest
rate naturally goes up. which Is the
..tracted. II the pinch is severe the
, money committee Of the stock ex-
change calls upon the local banks for
q fund to relieve. the situation. but
These are the conditions under
which call rates have occasionally
reached figures that are pronounced
extortionate and oppressive, and said
. to be destructive of property values.
Some of the leading banks of New
2York have been lending no money at
: the stock exchange except as called
upon by the money committee to sup
ply quota to the fund for stabilizing
lend in the call market at all can
hardly be criticised for the high
rates. and vet they contribute to them
even more than the banks which lend
at the high rates, for lending at any
rate gives some relief to the situation.
Borrowers Make Interest Rate.
THE truth is that the borrowing
public is responsible for the high rates
for money, just as the buying public
IS responsible for the high prices for
coal. sugar and cotton goods. The
public must learn to respect the law
of supply and demand and govern
individual affairs accordingly. High
interest rates like high prices signify
that demand is out-running supply,
and IL the supply cannot be Increased
the demand must be curtailed. The
volume of money and credit cannot
be made to satisfy all possible de-
mands by the public for purchasing
power, the pubic must restrict its
wants within an aggregate that is
consistent with sound state of
credit, or, If it fails to do so, take
the consequences. A high interest
rate is the miIdest effective means of
holding demands in check"
Liberty Bonds Steady.
Liberty bonds have become more
settled and the trend instead of being
toward lower prices seems to be
more in favor of higher figures The
Jquidati ton OF great corporations seems
ended, while the excellent returns of
fered to the ultra-conservative in
weston is creating a demand Of this
character for the various issues.
There was very little change in the
liberty issues today, but the victory
Sl per cents and the AZ per cents adj
Vanced eight points to 1888.
Local securities.
While there was material increase
in trading on the local Stock Ex-
change. the market was by no means
active. Business was generally in
odd lots OF stocks, at for National
Insurance. s51a for Capital Traction.
4l12 for Railway preferred. Al for Gas.
with sales of Railway As at 551k and
of Capital Traction SIS at IS.
N. Y. BOND MARKET