Evening star., 1925-02-19
CHEAP M0NEyFE[T
AT DISTRICT BANKS
Lack of Attractive Short
Term Paper Presents Acute
Problem Here.
BY CHAS. T.. SHAEFFER.

SkfAS. LII
Disposition of plentiful supply of
available funds in substantial paper
of short liquidity returning a profit
able yield is a problem of major
proportions which confronts the
local banking fraternity and obtains
throughout the country as well.
Locally, there is considerable hesi-
tatien on the part of financial insti-
tutions to put undue available cash
in high-p priced bonds of long ma
turity. This hesitancy is due to CHEAP
money and rising bond prices. The
problem would be easy of solution
IL 1t were possible to diagnose what
the future holds in store for the
bond market, but If the present market
should reverse itself within the next
year huge depreciations would neces-
sarily ensue
Washington bankers do not feel
that Liberty and other Government
issues offer an attractive buy at the
present levels. This market Is ruled
entirely by the money market; cheap
money elevates Federal bonds. Proof
of this statement is contained in
current quotations which show every
Treasury issue we'll over par
Short-term bonds of one and two
year maturities are considered the
most attractive investment at the
present time. But 1t is virtually i'm
possible to buy high grade bonds
maturing in one year at yield or
more than per cent; likewise, it is
practically impossible to buy high
grade two or three year bonds at
yields better than AZ per cent
Banks are subjected to two major
taxes-the Federal tax OF 1212 per
cent on net. while the District gov
ernment exacts per cent before de
duction of interest payments from ma
tional banks and trust companies in
the District, while savings institu-
tions pay the local government per
cent on earnings after deduction Of
interest payments. These disburse-
ments. alone, erase what little prohts
the present market offers.
Call money rules pretty steadily at
3h per cent. Time money is more
firmly held at the lenders price, with
90-day and 4-month funds availa abie e
against stock exchange collateral at
az per cent. Commercial paper is
quiet, with the market fairly broad
at 3ls to per cent.
Baking Magnates Meet.
Karl w. Corby. president of the
Corby Baking Co, is in Chicago for
three days for the first annual con-
ference on plans and policies of the
Continental Baking Corporation be
ing held at the Windemere Hotel and
concluding tomorrow
The conference is being participated
in by 40 executives of the leading
bakeries throughout the country and
part of the Continental Baking Cor
poration. The latter corporation is
made up of over four-score bakeries
in d large number of cities through
out the country, of which the Corby
plant is one.
Outstanding figures attending the
conference include George q. Barber
chairman of the board of the MasSa- =
chusetts Baking Co.: Richard r.
Meyers, president OF the Consumers
Baking Co.; Jules and \. L. Living
ston of the Campbell Baking Co,
Henry ]. c. Wagner, president of the
Wagner Baking Co. w Z. LonG,
president of the Standard Baking
Corporation; Wade D. Holland, presi-
dent Of the Continental Baking Cor
poration; George Krug, president OF
the Shuts Bread Co.; A. Welle, presi-
dent of the American Bakery Co;
NJ. Lee Marshall, president of the
Bakeries Service Corporation, and W
r. Taggart, president of the Taggart
Baking Co.
Bankers in Conference.
Over a thousand representatives OF
the trust company division of the
American Bankers Association are in
attendance at the sixth Midwinter
conference now being held in New
York City.
The first days discussion consisted
largely on the question of life insur-
ance trusts, conducted by authorities
on the subject. The hazards reduc-
ing a mans estate, such as unwise
stock investments on the part of his
heirs, and shrinkage due TO inherit
ance taxes, were pointed out, while
the value of life insurance trusts in
conserving estates for the benefit of
the heirs in a way to insure the maxi
mum of benefit to them was illus
trated by a series of charts thrown on
a screen.
John B. Larner. president of the
Washington Loan and Trust Co, and
an official of the trust company
division, and Stanley Holland. assist
ant trust officer of the American Sc
curity and Trust Co., are in attendance
at the sessions.
Treasury Note Consumption.
Secretary Mellon has authorized
Federal Reserve Banks, on and after
today, and until further notice, to re-
deem in cash before March is. 1925,
at the nOlucT ) oplIOii, treasury Gel
tificates of Indebtedness of series
TN 1925. dated March Is, 1924. and
Treasury notes of series A 1925, dated
February 1, 1922, both maturing March
Is next.
Redemption is to be made at par and
accrued interest to date of such op-
tional redemption. Holders of such
certificates and notes may, according
ly, at their option. forward them for
redemption to the Federal Reserve
Bank of Richmond or its Baltimore
branch.
Trading on Local Board.
Washington Railway & Electric As
| frmed up to 1914 on the local ex-
change this morning, while the pre-
ferred stock of the company sold off
| fractionally to 81. These were the
only changes reported.
Commercial National Bank was un-
changed at 15S, as was National Mort
gage & Investment preferred at 92s
| Washington Gas 5s sold at par.
President Hoover Returns.
| William d. Hoover, president of the
National Savings & Trust Co., re
| turned to his desk this morning after