Evening star., 1924-09-14
MONEY MARKET
Absorbing TOPIC
Any Change in Present Rates
Would Naturally Be To-
ward Higher Charges.
TIME FUNDS ARE EASIER
= "
Treasury Rate Vital on Account
of Secretary MELONS Views on
Market Conditions.
TIME FUNDS ARE EASIER
BY GEORGE r. HUGHES.

Dh uEonUE Il. bJUdESs
Special Dispatch to The Star.
NEW YORK, September 13-As the
week closes it is still the money sit
uat1on which is the absorbing topic
OF discussion in investment circles.
Rates are now 50 low and funds are
so abundant that it is hard to see
how any change can be in any other
direction than toward higher charges
for accommodation.
Any such development, Of course,
would be reflected Immediately in
quotations for gilt-edge securities.
One financial advisory service this
week gave an opinion to it's clients
that high grade bonds were now at
the peak and that such holdings
should be disposed of gradually as
opportunity offers. Brokers and
dealers are generally of this opinion.
Bankers and economists are not in
clined to agree.
Time Funds Easier.
Certainly there have been no
signs this week of any hardening in
money rates. Call money has been in
supply on the exchange at 2 per cent
and in the outside market d lower
figure was quoted. The highest rate
OF early September has completely
disappeared. More significant is the
easier tone for time funds. The
quotations for 90-day loans was
shaded this week from 3A to per
cent, and, while commercial paper
ruled unchanged, credit is still in eX-
cess of demand.
The testimony given by the recep-
tion Of the Governments new offer
Of Treasury certificates of indebted
ness is the same. The Secretary OF
the Treasury asked for subscriptions
to the amount of $3.50, 100000 and re-
ceived offers of nearly s600.000,oo0.
And this was for security carrying
pa per cent coupon Incidentally,
this is. the same rate at which the
last Treasury financing was done.
The only difference is that three
months ago the Government offering
was of a six months maturity and
now it is for a year. Secretary Mel
Ion has a reputation for being a
shrewd judge of money market con-
ditions.
Bond Market Steady.
AS far as the bond market goes,
changes on the week have been
slight The average quotation IS a
little lower, but not significantly 50.
Speculative buying of bonds is al
most at standstill. The market is
supported almost entirely by the in
ves.ment demand, and, while this
makes for dullness, it does not reveal
underlying strength when prices are so
well maintained. There has been some
institutional buying of high-grade
securities of the savings bank class,
a part of which has been traced to
New England. Most of the CONNER
cial banks, however, are exercising
great caution in their purchases.
The demand now seems to be Tor
medium securities with reasonable
return.
The outlook for the future de-
pends not only on business revival
at home, but upon recovery ABROAD.
Sooner or later Europe Will make
large demands upon the American
money market The German inter-
national loan will be only the be-
ginning Even this week our bankers
have been extending credits to for
eign governments, some of them on
account of Industrial and railroad
enterprises.
French Loan Vital.
One of the most interesting of
these was the Paris-Orleans Railroad
7 per cent bonds offered TO the
amount of s10,000,o00, and readily
placed This is the first French
financing of this nature done in this
country in several years. AT least,
it may be said to indicate confidence
on the part of the bankers in the
restoration of French financial sta
bility. Other offerings of this kind
are said to be in preparation.
Now there are those who believe
that this sort of investment in for
eign securities will eventually re-
suit in the outflow of gold, of which
this country has now such an ex-
cessive supply. SO far the foreign
exchanges have not been affected by
any such movement The truth OF
the matter is that capital will have
to be placed abroad in very large
sums before any impression is made
upon the totals still available IN
America. 1t may come to that even
tually, but it is not likely to be very
soon.
Greater Caution Noted.
1t has been very noticeable this
week that while the bankers have
been expressing their faith in Euro
pean recovery, there has been no cor
responding expression of confidence
in the market for foreign securities.
European dollar bonds dealt in here
have been either dull and neglected
or actually lower. The enthusiasm
which followed the first news re-
ports about the success of the Dawes
plan has all subsided. Quotations are
down substantially from the high
points of the year. 1t is a little
difficult to explain this, especially
when new foreign offerings, such as
that for Belgian account a few weeks
ago, have been so readily taken.
If conditions on the other side
are on the mend, as seems to be gen
orally conceded, the large yields af-
forded by these seasoned foreign is
sues ought to be very attractive to
bona fide investors. Perhaps it takes
the pushing qualities of the bond
statesmen to persuade Americans to
put their money into a foreign Sc
curity, and that, lacking these, the
market is sure to relapse What
ever the explanation, it is fact If
there are any bargains in foreign
Il. u b In.