Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-09-23
BOND
CHICAGO GROWS
AS MONEY DROPS
Big Issues, Meant for Whole
Country, Taken in
City.
RATES NOT JUSTIFIED?
Special to Indiana Daily Times
and Philadelphia Public Ledger.
Rv q z EVANS
CHICAGO. sent. 28--The I


CHICAGO. Sept. 2S-The demand foR
bonds in this city Is phenomenal. espe-
ciaIly In view Of the talk Of hard times
for months past. and the question where
the money is coming from is heard again
and again. IN some instances our deal
ers have had applications for the full
amount Of big bond issue intended for
sale throughout the country. There is a
general rush to get aboard" as the
signs Of the times indicate a further
rise in these securities Persons who
acted on the theory that it was time to
sell bonds and buy stocks have conclud-
ed that they were in too much Of hurry
1t is the opinion of bond dealers that
bonds will advance further, and they are
anxious to get new issues
The reduction In the discount rate Of
the New York Federal Reserve Bank -
only incidental along with other recent
tendencies. That reduction simply con-
forms the rate to the course of events or
perhaps goes a little too far. The offer
Of S12,00O,O0O railroad equipment trust
certificates by the Government at prices
to yield $40 and $50 per cent is in line
with the rest Of the happenings in the
money market.
LOWER MONEY RATES
NOT JUSTIFIED.
The reduction In New York is pre-
sumed in this city to be in pursuance OF
the wishes of the Federal Reserve Board.
Leading bankers here hold the same DO
sitiOn regarding such reductions as in
past months, namely, that ne ligulda-
ton has not gone far enough to justify
lower rates. They believe that it tends
to retard the thing we need most, namely
York rate is the lowest since 1914. seems
out of harmony with business conditions
which have not improved much. There 10
profit IN borrowing at the Federal Re-
serve Banks and loaning To the public,
and the more money the people can get
at the banks, the more speculation there
will be.
Back Of all this is the doctrine ac-
cepted by many Of our pest Lankers tnat
the Federal Reserve rate always should
be above and not below the omen market
tate. But it also is claimed the Govern
ment. az represented by the Federal Re
serve Board. has no right to undertake
regulation Of the rate for money. Il Is
regarded as a hurtful interference with
the normal forces of commerce. aid In
deed 70 some authorities it seems Ike an
act of tyranny. The desire Of Presidency
Harding to infuse new life into the trade
Of the country, is no doubt an influence
in the Federal Reserve Board, and it Is
easy for hypercritical people to claim
that there IS more politics than finance
in these changes
LOW MONEY MEANS
HIGH BOND PRICES.
But whatever may be the merits Of
these opinions, certain IT is that the
money market Ia and Of itself tends
toward lower percenta yes. which means
higher prices for the best bonds II is a
matter Of vital interest to business men
to determine, if possible, whether this de-
cline means what similar declines nave
In former periods Of decrease IN CONNER
cial activity. II business IS 10 be duh,
money gradually VIII accumulate in the
banks and we shall have extremely low
rates. That is the straight logical path
provided no co--r0V ming force makes its
appearance That the business OF this
country in itself should revive sufficient
y TO keep rates up would be contrary to
the experience Of former periods Of de-
preston.
But the rest Of the world stin wants
our capital. It IS then q question
whether We shall be willing to give UP
any mora of il or shall desire to make
Investment in remote parts of the world.
The strain on rs from large loans and
commercial credits granted to Europe has
been such that we are unlikely TO in
crease our foreign credits very much,
though South America still appeals to
many people as a inviting field and con-
ditions there have improved latterly.
And then there are many parts Of the
world where discerning investors viii be
willing TO put in capital along with
American ingenuity and machinery. The
oil companies are demonstrating this by
exploiting new ground in several cOun-
tries. Buving up bankrupt estates has g.
special fascination for some capitalists
and there are plenty Of them to be had
in the eastern hemisphere.-CoryHg
1921, by Public Ledger Company.