Evening star., 1922-12-17
BY 1. A. FLEMING.


Once again Secretary Mellon has
demonstrated his almost uncanny
judgment of the money market.
People have long since come to the
conclusion that the present occupant
Of the office of Secretary of the Treas
ury knows his business from the
ground up. and that when he makes
an offering of Treasury securities in
his refunding operations that they
offer employment of cash at a fair
market rate.
When his latest Offering was made
the short-term certificates at 3is per
cent. but mediocre success for the
4 per cents, while every one admitted
that the AZ per cents would be in
great favor. as they more than re-
turned even with a per cent high
grade corporate bond.
Bankers declared that they would
buy of the last-named issue. but
would not back up either of the other
issues with their own money, what
ever their customers might do.
But there was generous oversub-
scription to all issues. again giving
unquestioned approval of the Secre-
tary's judgment.
And that judgment is unquestion-
ably in favor of a long period of easy
money and plentiful supply with
moderate prosperity in business Iines-
1t looks very much as IL the de-
mand for accommodations from the
merchants of the country would con,
tinue light-as if they liked and
would continue to do business on the
moderate stock basis. with trips 70
f,,~ ict
offerings.
This would leave the demand, local
ly. largely up to the real estate in
terests seeking mortgage money ana
to brokers with their collateral Sc
curity for loans and private Dor
rowers.
During the year 1922 the local
banks held their rates stih at all
times. On their secondary surplus
they would take the going rate on
Wall street. but on local loans tne!
insisted to the limit on straight per
cent with a commission on buiioihs
loans. ,s
The general impression wouio
seem to indicate some let-up in build-
ing, in view of the great additlons 10
housing space during 1922. the hisn
cost of labor and gradual lessenlhs
of the demand. although nlgnsiat iamt
apartments are not overaounoan,. I.
while the great list Of Apartments
to rent" are largely upper noors IN
private dwellings
That there is SO much money
awaiting government financing IN i!s
periodical refunding operators M sn.n
something of surprise to the nnah-
cial world.
II probably represents the savings
of a large class OF investors "ho
have been unfortunate in their op,
erations in corporate stocks ana
bonds, even though they nave hol
participated in blind pools and IN
the purchase of stocks and bonds
that are entirely without standing In
the markets of the world:
So many people have been losers
even in their most carefully selected
investments that they are out OF the
market for good and all and find
satisfaction in the semi-tax-free Sc
curities of the government. with the
absolute certainty of receiving back
their money at the stated period, ana
not only that, but moderate rate OF
income safe and sound during the
interim.
And one cannot blame them.
There are cycles of ups and downs
in the market.
Practically all the millionaires in
the country who make investments
in stocks and bonds lost very large
percentage Of their wealth in 1880.
|
fretted. some of the little fellows.
wading near the shore in the market
were engulfed.
The latter have not recouped their
substance in the market. but the mil
lionaire, if he held on-and he could
not do much of anything else-is
again happy in the late advance that
has recouped his substance.
And when many of the little fel-
lows accumulate another dollar they
will play in Uncle Sans pool. where
they will never get over their heads,
no matter how far out they wade.
The continued large deposits in
savings banks prove that interest
with safety is one of the chief con-
siderations. Many consider the man
that nurses a savings account as not
making the best use of his money,
but that Gentleman is Al in the class
that cor safety above income.
And the dividend is 10 to 20
per cent the element of safety is not
much OF q factor unless it is some
old-timer in profitable business.
A new 10 per cent project has been
"broadcasted" among intangible tax
payers in Washington the last week.
1t is to be hoped that the cold shoul
der will be given to these mail pro-
motions.
In connection with new offerings
of securities the wise advice of a