The Birmingham age-herald., 1922-06-04

washington, June o.-1Wenty-1lN billion dollars of unused credit lies In American bank vaults today, ac- cordins to this weeks statement of the federal reserve board. Savings and state banks have another huge fund which they are most anxious to lend. While there is no method of measuring that sum, the nations banks probably have, all told, an untapped total of forty billions rf credit available for business enser- prises.
 Credit Reaches Peak
 This great reservoir of unused credit has been filling rapidly with in the past year. and stands today at the highest mark ever reached in the history of American banking It has brought about a situation yir- tually without parallel in our history The man or firm who wanted to bor-l row money a year ago had difficulty in obtaining it at high interest rates; today he is courted by banks and in- vestment houses. Hungry dollars are strenuously seeking his employ and at low rates of interest. The only thing he need have to get all the money he wants is prime security for his loan.
 Securities Sell Easily
 Every issue of securities, big or little, offered the nations investors by reputable houses within the past month or so has been snapped up with an eagerness born of hunger. Foreign and domestic Issues alike are oversubscribed again and again. For instance. a $24,0o0.000 issue of bonds of the Republic of Bolivia was of fered investors yesterday. The sub scription books were opened at 10;30 o'clock. Five minutes later they were closed. The issue had been heavily oversubscribed.
 U. $. Securities Sold
 The treasury's offering of s2o0, ,000,- 900 in securities paying 3h per cent intrest was oversubscribed in every district this week. The farm loan boards offering of s7b,ooo,oo0 of 45s per cent tax-free bonds, offered a few weeks back, was so heavily over subscribed the day it was offered that the board issued few days later another s42.o00.ooo to take up part of the overflow. The Canadian governments s100, 100000 bond issue. put on the market about a month ago. disappointed thousands of ;n- vestors in that they could not get a share In it.
 Bonds Absorbed
 Industrial offerings of prime value meet the same response. During the present week the New England Tele- phone and Telegraph company of- fered s35.00o,000 of first mortgage 30-year per cent bonds. The books were opened and closed immediately with an enormous oversubscription, The Virginia Carolina Chemical com pany's $22.500.000 of first mortgage 2C-year per cent bonds was ab- sorbed within an hour.
 The comparatively small concern seeking money likewise is embar rassed by the profusion of offers. The Utah Light and Traction com pany offered few days ago an is- sue of s12,500,000 in five per cent bonds. It had to turn away dollars from it's doors. The Philadelphia Electric company put out a s7.50o, 900 issue of 5lk per cent bonds and many investors failed to obtain as much of the offering as they wanted.
 Rates Dropping
 With the horde of investors, indi- viduals and banks. clamoring for loans, interest rates are dropping. Some of the borrowers who had to pay high rates a short time ago are seeking today to pay off the old loans and issue securities at lower rates. An instance was the applica- tion of the New York Central Rail road company this week made to the interstate commerce commission. to pay back. at a premium of five per cent, S$25 100000 of it's notes issued in September. 1920, at seven per cent interest rate, and issue instead a similar offering which will pay but five per cent.
 Rank Earnings Cut
 The effect of this tremendous pressure of idle funds has been to cut bank earnings materially. The federal reserve banks, for instance. paid the government about s6o ,o00.- 900 in excess earnings as fran chise tax last year. In 1920. the payment to the government was about the same amount This year. however, due to lowered interest rates and the great volume of funds seeking investment. the federal re-, serve banks will pay something like 5.oo,o00-a drop of more Nthan SJ per cent.
 Real Estate Cheaper
 Notwithstanding the excess of idle money. high rates have to bs paid,