New-York tribune., 1922-10-10
Requests for Allotmenfs
Here Indicate Nations
Answer to 500 Million
Call Is Twice That Sum
Small Investor Not
Yet Heard From
Reserve Bank, Swamped
by Applications, Says
Mellon Has s'Rung Bell'

Heavy oversubscription Of the $780,
100000 United States government
thirty-year AZ per cent loan, probably
exceeding $1,000, 900 900 and possibly
reaching s2,ooo,ooo,ooo, is assured on
the face of yesterdays returns.
No figure covering the aggregate
Of New York's applications on the ini-
tial day Of offering was available. The
Federal Reserve Bank, which has
charge Of the distribution in this dis
trict, was utterly unable to keep pace
in Its task of compilation with the In
rush OF requests for the bonds, ranging
from few hundred to several millions
OF dollars, and, In any event, was not
authorized to make statement. It's
officials limited their comment to the
evident success Of the operation, de-
claring that Secretary Mellon had
again "rung the bell"
The proportions Of the response In
this district, however, were indicated
by the testimony of individual banking
executives. The total subscriptions
turned in for their own account and
for their customers by half dozen OF
the larger downtown institutions
reached S200,000,000. One bank sub
mltted a preliminary subscription for
$ob,0O0,000 for itself and clients, all
covered by applications In hand and
contemplating payment in cash. Two
institutions between them asked for
$1o,ooo,000 for themselves and another
wanted $25,0oo,oO0.
Some padding
Subscriptions made yesterday were
chiefly by large individual and inst!tu-
tional investors. There was undoubt-
edly some padding" /. O., the man
who wanted 100000 subscribed for
perhaps twice that amount to protect
against his allotment being scaled
Gown. BANKERS reported that this
process was invariably accompanied by
the ability of the subscriber to take
up the full amount, II allotted.
Z me appeal of the loan had not We,
nau tlme 70 reach the man of moder.
ate means viewed as a group. MANY
banks and investment houses s,,non ra
ceipt Of Mr.. Melion's letter. nrensred
and sent out to depositors and client,
q description of the loan and advised
them that they were ready to handle
subscriptions. These notices are ex.
pected to bring in subscriptions OF
small amount In generous numbers.
Another class Of investors, whose
decision is yet to be made. Is repre-.
sented by the corporations. In many
Instances subscriptions. can be made
only as authorized by the executive OF
financial committees of the corpora
tlons,e and applications should come in
as meetings are held. Extensive buying
by corporations is not anticipated, how
ever. AS they regard shorter-term Sc
curitaes with more favor.
Banks Heavy Subscribers
There Is every evidence that the
banks will subscribe heavily. although
the understanding Is that MI. Mellon is
not seeking subscriptions from this
source. Two attitudes are observable
here, however.
I'VE have put in our subscription for
S26,OO0, ,000," said vice-president of a
large institution. "We will let our
clients have them as they may want,
put we are not going to offer the
bonds to them. We should be glad to
receive and retain the full $4,000 ,000."
We ahall subscribe for few, If any,
bank reported. Eve are rot in the in
vestment business and hold only shot,
term securities Of liquid character to
insure our ability to meet our Gus
toners demands for loans.
The distinction is between the So
called Wall Street and the more strictly
commercial banking institution.
Enthusiasm for the loan ran high
in the financial district where the
opinion that the terms were extreme
ly favorable was supported by high
quotation in trading on when-sssued
basis Of 100.75. The closing quotation
was 1o0.25 bid, 10N50 asked.
Million Gauged Market
Admitting that the Secretary Of the
Treasury had shown rare Judgment in
estimating market conditions, bankers
were looking forward to an advantage
to the general bond market from the
success Of the operation, and to the
subsequent development Of the gov
ernment's refunding program. 1t Is
believed that another bond issue will
have to come some time during the
next few months and subscriptions OF
$500, 100000 and allotments of about
$3.50, 100000 to this loan would pre-
pare the way for another ON cheaper
terms, it was said yesterday.
Liberty bonds sold lower yesterday
on the announcement Of the financing,
but selling was not pressed and most
of the early Losses were recovered. u
is anticipated that some holders OF the
Liberty Issues will dispose of these
bonds to enable their purchase OF the
lonee er-term bonds OF the new isue.