Evening star., 1924-08-03
By 1. A. FLEMING.

Commercial paper is one Of the great
percentage of the big business Of the
Nation. yet its use, so far as Washing
ton is concerned. has been SO restricted
as to limit familiarity with this method
Of raising money for tho very largest
concerns in manufacture and trade.
Approximately 32,2o0,0 100000 was
raised in 1s23 through the sale Of COM
mercial paper. the notes tgenerally for
30 days) Of the largest manufacturers
and some Of the greatest merchants in
the United States.
Buyers Of this paper are chiefly
banks it is offered to them for their
selection by paper brokers, who in turn
obtain it direct from the makers.
Some Of these brokers enjoy the high
est confidence Of their customers, and
their offerings are always given con-
aderation
Chicago is the chief city in the COM
mercial paper field. and one. A Becker
by name, is the leading paper broker in
the town. or was up to few years ago
and is probably today.
Mr.. Becker won his way in his busi-
ness through cleannesS of his CONNER
cial conduct. He was a brother-in-law
OF the senior partner of the house of
Schaffner & Co., which failed following
the failure Of one Of the big banks Of
the city.
Mr.. Schaffner committed suicide. Mr..
Becker took upon himself the task Of
clearing his brother-in-law's name and
of continuing his business for the family.
There was no obligation on his part call
ing for such action, but he went
through to the bitter end, and thereafter
bankers Of Chicago honored him for 1t,
and unquestionably etii do II he is with
them today.
=. % The Open Market. q,
The Federal Reserve system is
especially designed to aid in further
ing commerce and trade, and CONNER
kcial paper, large or small, is favored
in the rediscounting.
There is an open market for com
merctal paper. Banks, that. fs the
larger Institutions, prefer paper with
2 short maturity for their second
ary reserve to bonds and demand
promptly when due, as. commercial
paper usually Is. The alternative in
the matter Of demand loans and the
general run of loans at the bank Is
that a moderate or fair curtail or
partial payment Is offered in return
for q renewal or the note.
Commercial paper is listed just as
bond house lists its offerings of
bonds, giving the name of the maker,
the amount and prevailing rate of in
terest as well n date OF maturity and
there 10 generally Z wide range of
names to select lrom. Orders for this
or that piece Of paper or for several
pieces are generally by wire and an
exchange of paper for actual funds
follows. .r
l.; Commands Lower Rate.
= High-grade one or two name paper
always commands Z much lower rate
of interest than banks offer to their
customers on demand or even collat-
eral loans, loans secured by deposit
of securities or mortgage loans. =
Thus. while money rates at the
banks are generally held strongly at
g. per cent even at this time, the com-
merciAl paper market. 80 far this
year has been high at 4ha4% per
cent and is now low at Ia per
cent.
The volume Of commercial paper
sold during 1923, 5000. 900, 900. is an
amount equal to all payments re-
quircd OF Germany for the next five
commsreial pspsr was nrst used in
Hersov4n1 . sxAo greaa dry. eoo6s
lcommisstsns houses OF New York. To-