The New York herald., 1922-10-02
Bond. and U. 8. oinancinE.


In the bond market the situation diff
fered materially. Here there was a dif-
ferent reason for the heaviness. With
the Government making plans Tor
financing. which probably will aggregate
when completed as much as $1,000, ,000,-
600, it was to be expected that bonds
particularly Libertys. would reflect some
rather important selling. What is both
ing the financial community most a,
present in this connection is the coupon
rate and the possibility of an attractive
tax exemption feature.
1t Is agreed that should Secretary
Mellon decide to put out a huge issue OF
long term bonds, carrying a tax exemp-
ton privilege up to a substantial amount.
they would be absorbed in a twinkling.
even II q rate as low as per cent were
made. At the same time. the question
Is raised, and wisely, perhaps, as to
whether the Government can safely per-
nit the loss of a tremendous revenue
through such tax exemption in the face
of the big deficits which loom ahead. 1t
is quite possible that substantially
higher rate OF interest will have to be
paid by the Government in order that
such a contingency may be averted.
One OF the outstanding Developments
rails and other equipment by the ma
tion's carriers. OF course a huge vol
time of orders for rails was anticipated
in view Of the United States Steel Cor
noration's announcement OF an increase
in price of SO ton, beginning October
1. But original estimates for the week
of possible orders aggregating 100000
tons proved to be too low by SO per
cent, for, according 10 best reports,
the weeks total OF rail orders ranged
close to the 1000 900 ton mark. a huge
volume. At the same time continued
buying OF cars and other equipment to
forestall the payment OF materially high
er prices in the near future was carried
on. The trend OF all steel prices Is up
ward and the roads are making every
effort to meet their full requirements
as soon as possible.
Foreign Exchange slump.
Weakness in tho foreign exchange
market during the last week could not
properly be attributed TO the Near East
situation. Rather it was the result OF
large offerings of commercial bills-par-
ticularly cotton and grain bills.
One development which came forward
lato IN the week and which may have
business was the shortage OF cars with
which to move freight. The movement
OF grain was badly handicapped by the
car famine. and indications toward the
close OF the week were that manufac-
turing lines were beginning to feel the
pinch.
Car loadings are maintained at a high
rate, but the condition of the carriers
equipment at present Is so bad that the
least strain in the way OF heavy Offer
ings of freight is met by the car short
age obstacle which, for the moment at
least, has proved decidedly embarrass-
ing. Railroad officials, however. are con-
fident that a rapid rate Of repairs can
be maintained and that within reason
ably short time tho difficulty will be
removed.
The abandonment Of tho steel merger
plan, while something of surprise, was
forecast several weeks ago when the
Federal Trade Commission refused 10
follow the lead Of the Department OF
Justice in giving it's o. X. TO the plan.
The question OF the power OF tho Fed
eral Trade Commission to stop the
consolidation was raised, but entirely
aside from that was the extremely n.c-
esssry feature OF financing. The steel
companies might have gone ahead with
their plans In defiance OF the commits
sion. but their chances of selling up-
wards OF $50,000.000 OF stock TO the
public In the face OF the opposition of
tho Governmental body were slim. That,
IL Is generally believed. was the real
reason for the abandonment Of the plan,