Evening star., 1922-10-01
BY I. A. FLEMING.

Millions of dollars have been lost
| bonds and more millions of probable
profits through the action of New
| York financial writer's in speculation
on the probable long term financing
| to be undertaken by the Secretary of
the Treasury in refunding operations
| of the government.
1t Is fact that the Treasury De-
| partment has long desired to put out
longtime securities to avoid. in as
! curing temporary financing.
A stumbling-block has been in the
way of this action, Secretary Mellon
being forced to await the outcome
! of the bonus legislation before under
| taking anything in the way Of i'm
, portant refunding operations other
! than with certificates.
Immediately the bonus measure was
killed. temporarily or permanently as
the case may develop, every one COM
menced to figure on the long-term
financing.
Admittedly anything that Secretary
Mellon thinks he can successfully put
over is next to an accomplished fact.
But some of the wise ones make
the mistake of thinking that the Sec
retary will disregard the interests of
the holders of billions of liberty bonds.
securities of the government put out
in time of stress and need, and. in
order to make a bond more attractive.
will undertake an issue of tax-free
bonds
This prediction was made in one of
the most important financial papers
in the country, and Immediately city
banks were deluged by owners Of
, liberties with demands for informa-
tion regarding the tax-free bonds. and
an urge to sell my liberties and all
other bonds" This latter in prepa-
ration for taking full advantage of
! the proposed tax-free issue.
1t looks just now as If there would
be no federal financing incident to
october l; 1t may even pass the 18th
! without any announcement. Indeed
of the Treasury Department can wait
until near December Is when the
! heaviest maturities are due.
Just how Mr.. Mellon feels toward
taA-free bonds is not matter for
consideration. Justice toward holders
| of outstanding billions of liberties
| and also consideration of investors
who have constantly made Treasury
! flotations successful, would seem to
protest emphatically against such a
| thought.
| 1t would take an expert trained
! investment banker to suggest any
! thing like the amount of damage
done by these reports.
! The bond market has been Jared
during the week, much as the stock
| market has by the news from abroad.
| especially from the near east, as no
| one knows just how much damage
will result from a clash Of interests
| there, although nervous holders have
been getting from under very gen
erally,, and 1t should not disturb the
poise of the owner of liberty bonds
in the United States or elsewhere.
Any tightneSS in money is prob
ably temporary affair, due to in
creased demands Of business and of
| the stock market at the same time.
TaX-free bonds are not likely to
| find any favor in Congress-indeed.
| it is understood that the campaign
I against the tax-free progresses
favorably and rapidly.
Wall Street Jared.
For ten days Wall street corre-
Spondents have been telling a story
! of the New York stock market large
ly ignoring the near east situation,
| this. too, when it was patent to all
that the Anglo-Turkish trouble, with
possible eventualities. was the one
and chiefest factor in the tumble in
prices which the great majority of
stocks have sustained during the
past week.
Wars and rumors of wars are never
ignored!
1t is true that the market has been
going one way for many days, that
! it has been without a reaction worthy
of the name. and that it was nothing
! more than natural that there should
be reaction, but the reaction would
not have caused other than very
modest losses, while the market has