Evening star., 1920-06-10
CLAIM HIGH RATES
HURT Low ISSUES
Bankers Admit Necessity OF
Advance, But Differ on
Approval.
BY /. A. FLEMING.

Local bankers were not q unit In Civ.
ing approval to the action of the Treas.
ury Department in issuing Treasury
certificates bearing 5A and per cent
interest, without increasing the rates or
like obligations outstanding. 20 the same
figures. They expect that the rates OF
discount on notes secured by Treasury
certificates will be advanced in the i'm
mediate future. and that they will be
unable to carry their older issues to any
advantage, but on the contrary will be
losers through the operation. unless spe-
cif1c rates are made on specific issues.
Many banks have secured subscrip-
tions from investors having available
funds with no immediate use, therefore
with the assurance that they could read
lily borrow profitably on the obligations
an implied promise which cannot be full
filled.
The action of the Treasury is a recog-
milton Of the fact that money is worth
more today than ever; that credit is
scarce and that even the greatest bor-
rover must meet the increasing rates
Of interest
1t may be unfortunate that the
government cannot practice the econ :
omy and sane thrift that it urges
so strongly on others. The great
system of government must operate,
and the question of thrift has here
tofore not been given much consid-
Grafton by Congress or heads of de-
partments.
The two new issues. one running
one year. to pay per cent: the other. a
little in excess of six months. having a
5A per cent rate. bear the highest yet
paid by the government for cash. and
a matter of $400.000.000 sale is de-
sired.
May Make Exchange.
Some maturing issues can be eX-
changed for the new certificates,
namely, those maturing June Is. May
80 and July Is. On these dates the
lease $1,000. 100000 covering maturing
obligations, Of which S700.000.000 are
income tax certificates, many Of which
will be turned in in lieu Of taxes
Moreover. the second installment OF
income tax payments will be due the
18th instant and will care Tor the
maturing certificates.
At the recent convention of the Dis
trict Bankers Association a MEM
Der asked Charles A. Peple, deputy
governor of the Richmond reserve
bank. why the government did not
follow it's own example in the issu-
ance of it's war bonds, making the
of the highest issue. Mr.. Peple ad-
mitted that this would be desirable
from a bankers standpoint. but de-
clared that 1t would be illegal.
New Bond Issue.
The National City Company is
bringing out an issue of $10.000.0 600
Hershey Chocolate Corporation 7h
per cent bonds. about the highest rate
o. a. Nryi1
be of 1000, $500 and 500 denomina-
tions, will contain sinking fund pro-
visi ons for $125,0OO to the fund quar-
terly plus any sum by which rs per
cent of It's annual net income shall
exceed the minimum payment to the
sinking fund. Bonds bear date June
1 and are payable June l, 1880. They
are on the market at $3.50, yielding
785 per cent.
They will be issued, in part for the
purchase of the Rosario sugar prop
critics of Cuba The bonds are the
only mortgage on the company's
property.
Local Securities Active.
It has been some time since the Local
stock exchange exhibited the activity
in it's daily sessions noted today. In
bonds changed hands. Prices were
fairly steady, with some new lows.
Lanston was the leader in the stock
section, selling steadily and freely al
II. A little Mergenthaler sold at 129
Railway preferred sold at the recent
low of 40h Capital Traction sold
sparingly at ssh and Washington
Gas stock at AN.
Chesapeake and Potomac Telephone
5s made a new low at 81. practically
3 points of from recent valuation
Railway As furnished the most active
trading in the bonds session at 52A
to 52h.