Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-03-23
GOSSIP OF
THE STREET

oOOOlI VI
THE STREET
Despite all the talk of the possibility
of reduction in the dividend rate, evil
IDENTIFY, there Is an overwhelming ma
jority of small investors throughout the
country who have not lost faith in the
Pennsylvania Railroad management
Regardless of the brain racking prop
lens confronting the official family, re-
gardless of the general recognition OF
lean earnings, regardless of the reared
obstinacy Of the labor element, there are
a legion of people with moderate means
who regard the stock as big bargain
these prices and are quite willing TO
take a chance on the future.
This Is corroboratcd in convincing
fashion by the virtual flood of small
buying orders which are coming in from
almost every quarter Of the country.
Many of the most conservative banking
houses, which seldom give much atten-
tion TO the small investors, have been
receiving an increasing number of orders
which has about taxed the clerical ca
pacity of the departments handling this
usually small business.
Perhaps more concise and illuminat-
ing illustration is furnished in the eX-
pericnce Of prominent uptown house.
This firm last week had three sailing
orders in ''Pennsy" aggregating over
1000 shares. Nothing unusual attended
this transaction, but the interesting side
was furnished that the same mail, that
day, and the one succeeding, contained
small orders for the same stock. ranging
from three to fifteen shares, and which
IN fnl ,,, g b..
large selling orders.
Further corroboration is 20 be found
in the jam which exists at the transfer
desk at the general Office at Broad Street
Station. Whereas, ordinarily, the trans
fcrs are made on the same day of re-
quests, 1t now requires two or three days
before transfer deliveries can be made.
Some OF the big guns may be getting
out. If so, the little fellows are crawl
ing into their places.
Federal Land Bank System
Lawyers all over the United States
have been interested in securing copies
of the decision of the Supreme Court Of
the United States in the farm loan case
recently decided. Sufficient time has
expired for study of the opinion.
which is clear and very interesting. 1t
appears that there was no dissenting
opinion whatever on the merits Of the
case. the two dissenting opinions being
on the purely technical questions Of
jurisdiction. On the mcrites Of the case
the unanimous opinion of the judges
who passed on this question was that
the act was valid and the bonds issued
by the banks created under the act were
exempt from United States taxes. in
cluding the income tax. and from state,
Coming at time when income and
other taxes were pressing heavily on
taxpayers, the decision attracted wide
attention among investors,
One Of the interesting points Is that
the court met the question squarely
and held that the Federal Land Bank
system was created not under the power
to appropriate money or any other
special clause of the constitution, but
as the court said, "sincc the decision of
the great cases of Mccullough VS.. Mary
land, 4 Wheaton, 316. and Osborn vs..
Bank, 0 Wheaton 73S. it is no longer
nu open question that Congress may
establish banks for, national pur-
I'VE may. therefore. conclude that
the creation of these banks, and
the grant of authority to them to act
for the government as depositaries Of
public moneys and purchasers of gov.
ernment bonds. brings them within the
creative power of Congress, although they
may be intended. in connection with
other privileges and duties. to facilitate
the making Of loans upon farm security
at low rates of interest This does not
destroy the validity of these enactments
any more than the general banking
powers destroyed the authority of Com
gress to create the United States bank.
or the authority given to national banks
to carry on additional activities. de-
stroyed the authority of Congress- to
create those institutions.
Thus the Federal Land Banks became
firmly established as part of the great
banking system of the United States
to aid the agricultural interests of the
country, az the Federal Reserve Banks
were constituted some years ago to CO.
ordinate the facilities for the industrial
and mercantile interests.
The decision seems destined to take
prominent place in the economic his
tory OF the United States.