Evening star., 1920-06-03
MONEY THE FACTOR
IN BUSINESS WORLD
Readjustment of Security
Values to Interest Rates
Now Going On.
by 4. FLEMING.

Money is the dominant factor in
business. SO long as money increases
in value, SO long must the security
markets adjust themselves to the new
conditions. One cannot expect per
cent bonds to sell on par basis
when money is I to s per cent in the
open market. nor can and 6 per cent
dividend payers be expected to hold
at par. 1t is the readjustment that
has brought bonds to the new basis
of money. that caused the great slump
in liberty and victory issues.
There is small harmony in 4A
per cent bond selling on par basis
when to TN per cent paper and Sc
curities are being offered daily in the
open market.
This is the rea 5justment period,
and it ID within the probabilities
| that these conditions will prevail un-
til the liquidation of credit obliga-
tions has reduced the demand for
| credit and increased the supply of
available cash.
Government Finances Close.
There is no hope of easier conditions
with the government to the extent of an
ability to produce an easement through
large deposits to the credit of the Treas
ury. On the contrary, the government is
going closer than usual. withdrawing
what credits it has with national banks
and nursing along accounts against the
of taxes under the income tax laws will
be payable.
1t is probable that a new issue of
certificates will be announced in the i'm
mediate future.
When the Federal Reserve Board ap-
proved of the advances in the rate on
commercial paper to per cent, it prac-
tlcally forced interest rates to higher
level, and even essential borrowers must
| meet the demands if they will make
use of credit facilities.
Federal reserve banks are also bor-
rowers. their use of credit being $14S,-
. 100000 The borrowing banks are those
| of Atlanta. Richmond to light degree
Dallas. Minneapolis. ST. Louis and Chi
cago. as well as Kansas City.
Bankers acceptances furnish no
small part of the medium of borrow
ing. millions of these being sold by
| the flush to the needy reserve banks
Washington Securities No Exception.
Washington securities are no ex-
ceptlon; they. tco, are easing off to
bring a more proportionate value be-
| tween yield and market value of
money.
Washington Gas IS made a new low
this morning at so; Traction 5s were
sold at SO and S3A and Metropolitan
| Railway 5s at 80.
The only stock transaction was in
Capital Traction, an odd lot at S5 IL
|
but there was neither selling nor buy
| ing pressure. hence the dull market.
Personal Mention.
| George w. White, president of the
National Metropolitan Bank, will
| spend the rest of the month, begin
ming next Monday serving on the
criminal jury. He had planned to
| attend the District Bankers conven-
| ton.
Urge Directors Presence.
Robert N. Harper has written to
| each of the directors of the District
National Bank. urging that they
| make the trip with the bankers on
| the steamer Midland next week.
/ The american Security and Trust
| Company will have eight representa-
| tives at the District bankers conven-
| tion. the Riggs National six. and
| many others from various institu-
| tions.
| The ride down the Potomac Sun
day evening should be very enjoya-
BILE. ~@