Evening star., 1921-10-18
CALL ON MONEYS
BY THE TREASURY
Secretary Mellon Asks rs Per
I Cent-0utIOok for No.
vember | Issue.
BY I. A. FLEMING.

Secretary Mellon again called on
the credit fund with banks, resulting
from the sale of Treasury certificates
and three-year notes, this call being
for 25 per cent of the balance.
Today bankers are paying in to
their federal reserve regional banks
40 per cent of the balance after the
preceding CALL and on Thursday of
this week they pay in Is per cent.
The heavy movements of money in
the last few days would seem to in
dictate that the government expenses
are growing. and that the big credit
established by September Is payments
was near exhaustion.
Bankers are now predicting an is
sue of Treasury certificates with the
advent of November. rather than on
the 18th proximo. when the first ma
turtles are scheduled.
1t is probable that emergency and
deficiency expenses will call for much
extra cash.
the big Withdrawals of currency to
amount to much. Yesterday call
money was off to 4 per cent; today
early loans We're at per cent.
Another reason that suggests GER
tificate issue with November Is is the
fact that much OF the cash received
in the redemption of certificates ma
tured October Is is being held for
reinvestment in the certificates, the
most popular form of conservative in
restment of the day.
The Exchange Situation.
Prior to the world war bankers and
trust companies found the foreign ex-
change business reasonably profitable
and transactions usually free from
hazardous risks.
A comparatively small part of the
enormous business of the United
States in foreign exchange is trans
acted direct between the banks issuing
the credits in the money of the for
eign countries.
Most of these operations are COW
cred or protected by some city panK
or trust company
Time was when there was no un-
easineSs connected with the busiue ss
when exchange was bought and sold
freely, perhaps on a rate quotation a
day or two old
Following the war. the wild f1uctua-
tlonS in exchange, daily and hourly,
and the enormous operations. largely
speculative in character. made the
larger covering institutions more
conservative in their transactions and
led to the abandonment of customs of
previous days and the introduction of
an innovation.
Much of the uneasiness and the
large trading in exchange was due
marks. lire and francs. induced by
hundreds of so-called brokers issuing
fashy advertisements setting forth at
some length the wonderful profits
that could be made in the rise in
exchange to develop quickly after the
close of the war.
But unsettlement and lower prices
for foreign currencies marked the
after-the-war fluctuations.
Many big bankers granting ex-
change issued against exports to
South America and elsewhere found
the market against them before they
could make the transfer.
Frequent fluctuations made the
days quotation on exchange danger
Gus. and the big exchange houses
were forced to protect themselves by
limiting the amount of protection
they would give smaller institutions.
Thus they gave a days quotation
on marks, etc. but the business of
the day was limited to 500; that
amount of exchange sold. the client
could make no further mark TRANSACT
tions for another day.
Concerns having direct wires with
New York city might obtain rates up
to the minute and issue exchange in
any amount.
1t was this change of method. in
restricting the amount of exchange
issued, that created the opinion in
the minds of some that the Guaranty
Trust Company had retired from the
exchange field.
There are several direct wire con-
nections available to Washington
banks. The National City Bank and
w. B. Hibbs & Co., the National City
Company and the Guaranty Company.
all have several wires.
BY means of the wires of the latter
company, which are at the disposal
of local banks free of cost, negotia-
tions for any amount OF foreign ex-
change may be carried on with the
Guaranty Trust Company. on the
quotation of the moment, but each
and every transaction. over the limit.
is "a separate affair and for each sale
of exchange a special quotation must
he obtained.
This is the custom now in vogue
with covering institutions
The difference in quotations of ex-
change between different banks, rep
resents the variation in the profits
which they make and also measure
of safety.
There was a larger aggregate busi-
ness in local securities today, more
trading in shares and less in bonds.
Capital Traction sold at S7as, Wash
ington Gas was quite active at 4S to
AIS.
Railway preferred quiet but firm at
Union Trust shares were in demand
at 11S1a. and Washington Loan &
Trust sold to the extent of fifty
shares at $50.
The only bond transaction was one
in Railway Is at 5913 a little better
than previous quotation.
Washington Chapter Meeting.
On the evening of the Goth instant.
Thursday evening of this week.
Washington Chapter. American Insti-
tute of Banking, will celebrate the
beginning of another year.
A meeting of members of the chap
ter their friends among the senior
bankers an generally all inter
eSted, bank directors included, will be
held at the New Willard. in the small
est will precede an evening Of dane
ing and amusement.
J. c. Duiin, jr.. is the chairman of
an intensive drive for 1000 member
ship. and will get the drive in motion
at this meeting.
George o. Watson. head of the Lib
erty National Bank, himself chap
ter graduate, will deliver the address
of the evening on chapter work and
chapter needs.
During the evening presentations
. of certificates of graduation will be
who passed the examinations in the
elementary and the advanced classes;
also the Charles J. Bell prizes.
No interest payments have been
made on Washington, Alexandria and
Mount Vernon per cent bonds since
March. 1920, nor is there any promise
of favorable adjustment of the mat
ter. The committee investigation de-
clares that "it is impossible to pre-
dict the ultimate outcome of the
wash:ngton-V Virginia Railroad Com
pany, the guarantors back of the
bonds, nor is there any prospect of
the payment of the three defaulted