The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1922-01-11
ADsHsPss aEAHP" BUSINESS Ant FINANCE
FINANCE
L. AND
I'm

bDOOxNEO0
~ q. Q. FORBES
It takes money to do things-as
you probably have discovered.
One very strong reason for ex-
pecting better business and more
employment this year Ia the increas-
Ing plentifulness Of money available
for those capable Of doing things IN
the business world.
The cost Of money. like the coa Of
most things, also In declining. Wall
street brokers were able to borrow
|day-to-day funds this week at the
extraordinarily low rate Of three per
cent. Such a rate had not been
quoted since November. 1919. II the
bankers were anxious to, even this
low rate could be shaved. because.
understand. they cannot find users
for all their funds and are keeping
millions off the market 20 az not to
break the rental rate to smithereens.
Money can now be borrowed for
six months at ~ per cent, which In
also the lowest quotation in q long
larger than the demand, and II il
| Questionable II q further decline can
be long STAYED Off by lenders. This
week has also brought q new low
charge for discounting bills "ac-
cepted" by bankers and thus made
available for borrowing on at the
Federal Reserve Bank. The new rate
II 4 per cent.
And the likelihood 10 that the Fed
eral Reserve rediscount rate of AZ
per cent (at New York; will be re-
duced before the new year is much
older. -. 49,
| Enterprising Industrial, mining,
mercantile and other leaders viii
expand their activities when they
can obtain capial at low rates,
whereas they would hesitate to do
30 were the rental rates for capital
high. How the cost OF capital has
fallen during recent months can be
best made clear by giving few
specific figures.
Last year the foreign governments
had issued bonds carrying no less
than 8 per cent interest. Today the
usual rate carried by foreign, govern
ment issues Is 81 per cent, and Il
may be that by and by we shall see
q per cent return on such invest.
ments.
Incidentally, our own Liberty bonds
have advanced from around IS 10
within few points Of 100, a fact
very gratifying to those who have
been fortunate enough to be able to
hold on to their Government securi-
ties during these rocky times.
Industry and public utility com.
l nj Il
ties at per cent less than they had
to pay last year. The Northwestern
Bell Telephone Company. for illus.
tration, saw its per cent obliga.
tons selling last year below 81. or
on q basis to yield the holder ia
per cent. These same securities are
now quoted around lot, giving a
yield Of 6x per cent.
Railroad bonds are also now sal.
able on less burdensome terms. II
10 gradually becoming possible for
strong railroad companies to pay
off obligations carrying very high in
terest rates and issue new obliga.
Pennsylvania ~ per cent bonds
which last year were down to rs. are
now more than ten points higher; in
other words, they yielded fully 81
per cent last year, a. contrasted with
only STA per cent today. New
York Central, ~ per cent bonds
meanwhile have jumped from 80 to
104, yielding only slightly better
than ~ per cent at the latter fig
ure. Atchison per cent bonds
which were down to IS. are now
above IS, giving a present-day re-
turn Of less than ~ per cent.
| Most bankers admit privately that
they look for stil lower interest
rates within the next few months
that the right kind Of business up
builders will be able to raise capital
on still more attractive terms. II
was John d. Rockefeller who once re-
marked to me, when / asked him
what had been the hardest problenl
of all his business career. ITO be
able to get all the money necessary
to do all the business I could do
A great many wide-awake, progress
sive, enterprising business giants
could truthfully make the same con
fession.
Is it not tremendously important
therefore. that things are SO shap
ing themselves that borrowers Of
the aggressive, constructive type will
be able from now on to get hold n,
capital in larger volume and on very
attractive terms?
This country 10 blessed with q
great number Of broad-gauge men
who are full Of irrepressible ambi
ton and who also possess the brains
necessary to enable them to make
money through the use Of money
In other words, they have acquired
the know how" We hear a lot
about Americas productive capacity
having been expanded far beyond
Immediate requirements. But there
is no scarcity Of enterprising heavy
weights who have plans for profit
able projects.
| OH Stocks.
FURNISHED By W. d. Hibs. 4 Co,
Prices at noon: Bid Asked