Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1921-06-12
FINANCIAL DIGEST
q THE WEEK I'M BUSINESS =

i!Mia.,

| to 5S.3-the highest percentage since
the spring Of 191S-foreshadows an.
other cut before long in official dis.
| count rates. Last time the reduction
was from Z to 6 IL per cent; this time
| it will be drop to 6 per cent, and
both in the call loan department and
in the market for commercial paper,
preparations for this lower level al
ready have begun.
That the prospect of lastingly easier
| money rates has not been the stimulus
that it ordinarily would be to the in
vestment market is to be explained
first, on the ground of the excessive
| output within the last month or Sc of
new securities and. second. on the
ground of the uncertainty of the rew
revenue legislation. While most Of the
new syndicate offerings have gene well,
there has been too great eager1ess
to gather the cream off the investment
demand.
Securities Market Consestsd.
As result the market has become
cOngested in the same manner as it
was last February and has not been
able to resist as we'll as it otherwise
would be, competition of the new tax
exempt issues of the federal govern
ment and New York state. The sue
cess of the latter issues has been pro-
noted by the unsettled financial out
look. which has made investors feel
more inclined toward securities like
the o Sd per cent treasury notes which
are free from normal taxes, and the
New York state fives, which are free
from all taxation.
But in the market generally, both
for bonds and stocks. one thing which
has told against the buying power,
which has kept down the support
which ordinarily would have been
forthcoming at such very low prices.
is that rich men do not know where
they stand in their obligations toward
the government.
They were assured that the new
regime at Washington would cut down
expenditures and reduce taxation on
the larger incomes.
Are Doubtful Nov.
Now they have begun to douot
whether this can be done. in view Of
the great shrinkage in both corporate
and private profits that has occurred
and will be a continuing feature GER
ta.nly for another six months.
The problem will be simplified if the
new treasury program for distributing
the redemption of the $7,5OO.OOO, 900
floating debt over a five-year period
from 1923 to 1928 proves a success
and the results Of the first offering Of
the new notes intended to accomplish
this purpose are certainly encouraging.
Still, even eliminating the considera-
ton of any part of this debt retire.
me MT having to be met through taxes. |
it is going to be hard job. with the |
slump in revenue to make both ends
meet. and relief from the present tax |
burdens becomes every day more and |
more unlikely
Credit and Exchange.
In the light Of last statistics on |
British and French trade and cons,d- |.
ering these along with the continued
heavy imports INTO this country OF |,
gold, there is no excuse for trying to |
read into the recent break in the ex-
changes any inference that the condi-
tons which worked for recovery all
through the winter and spring have
been changed
Purchase Of dollar credits and the
setting up in this country Of large /
cash balance in favor of the recipi-
ehtS OF the herman reparat1OnS money
coming upon an inflated speculative
situation, furnishes complete OK
PLANTATION. There is nothing seriously
disturbing about the decline, because It |
could be instantly stopped if it threat
aned unfavorable consequences. by the
commission ceasing their
buying of dollars and agreeing to ac-
cept other currency as cover for the
three months bills which they hold /
against the German government
As for the railway situation. the
feeling is rather more confident at the
close Of the week that the men will
agree to the II Der cent wage cut and
that there will be no real threat of |
strike