Evening star., 1925-03-08
MELLON FINANCING
IS EVENT OF WEEK
Ne,y $3.50, ZOO, 600 Offerings
Absorb Attention of Lead
ing Investors.
ny GEORGE r. HUGHES.
Special Dispatch to The Star.

by GEORGE T. HUGHES.
Special Dispatch to The Star.
NEW YORK, March THE event
Of the week in the investment
market was the announcement by the
Secretary of the Treasury Of his plan
for the Governments March financing.
This took the form OF a combined
Offering of per cent Treasury bonds.
Identical in all respects with the
Treasury IS OF 1e44-54, and Of nine
month certificate OF indebtedness
the combined offering to be for about
S450,000.0oO. The significant part of
the operation is that the bonds are
offered at a premium of half point
above par. which is the first time
United States Government bond has
Ecca offered at a premium since 1911.
The certificates, which bear interest
at the rate of per cent are offered
at par. That the offering would be
oversubscribed was confidently pre-
dicted in banking circles.
All U. 8. Bonds Higher.
whether there was any connection
or not with this announcement OF
Treasury policy, il is fact that all
the United States Government bonds
went substantially higher late in the
week and that there was an un-
expected renewal of savings bank
buying of high-grade railroads. 1t is
difficult to reconcile these develop
ments with any forecast OF materially
higher money rates.
There was some hardening in the
time money market, but either that is
only temporary or the financial
institutions which are again &C
cumulting securities are making a
ho
the Federal Reserve banks, showing
as It does smaller note circulation
and a drop in discounts. points to-
ward the maintenance OF easy money.
and while there was also a decline
in gold reserves, the export movement
about which so much was made
month ago has all but ceased. NO
where is there any sign of credlt
strain.
Other Liens Mark Time.
The general bond list has marked
time all the week. The high point OF the
year was reached on February 20, but
the changes since that time have been
so slight as to be without meaning.
New issues have been comparatively
small and have been well taken. How
ever 1t may be in speculative circles.
investors are giving the preference to
quality over yield.
There has been a particularly good
inquiry for tax exempt securities, the
supply of which is low. Municipal bonds
are quoted around the best prices in
recent months. In this department no
heed is given to money rates. Even
the prospects of lower taxation as out
lined by the President in his inaugural
address have had no effect upon the de-
mand for these tax free obligations
from investors, subject to the higher
SurtaXeS.
Foreign Group Steady.
Foreign bonds have been steady. but
that was all. 1t is, however. significant
that they have not yielded in price not
withstanding all the confusing cables
as 10 political complications in Europe.
it sometimes seems as IL there was no
hope of ever ending the differences be-
tween the chief allies in the war over
European reconstruction.
Certainly French finances look as in
volved as ever. Only on the economic
side is progress being made and while,
OF course, that is the fundamental thing,
il cannot be expected that the market
for foreign securities will improve until
budgets are balanced in fact and not
only on paper.
Rail Outlook Brighter.
l For the railroads. the outlook is en-
at least the carriers know where they
stand as far as Government regulation
goes-that is to say, until the new Ma
tional Legislature reassembles. Traffic
is still at levels we'll above last year
and 1923. II is generally realized how
important railway prosperity is 70 other
lines. 1t is a fact. however, that eff
cient railroad operation reflects upon
all industry.
1t is then gratifying to note that
the railroads during the past year
have made a record never before ex-
Celled in that they handled peak traf-
fic even during the late Summer and
early Fall months when the demands
are the heaviest, with no car shortage.
In fact, during this period there were
100000 surplus cars in good repair
and 100000 serviceable locomotives.
There is no reason to believe that the
results the coming year will not be
as satisfactory.
Steel Employees Cautious.
There were two interesting incl
dents relative to employees and Gus
omer-ownership this week. One of
these was the failure OF the United
States Steel employees to take the en-
tire amount of stock which was Of
fered by the company. The total
amount provided was 100000 shares,
but that subscribed was only S2,S48.
This can be accounted for by the fact
that the price fixed, S125 share, was
the highest since the plan was first
inaugurated of selling stock to en-
ployes. 1t only goes to show that the
steel corporation employees. like the
general investing public, would rather
buy L. S. Steel common when the
price is down than when there has
been a rapid upturn.
Patrons Take Whole Issue.
The other happening was the dis
posal by the employees OF the Phila-
delphia Rapid Transit Company of a
$3 900, 600 per cent issue of pre-
ferred stock to patrons of the COM
pany. This was accomplished In a
period of six days and probably is
without precedent in street railway
financing. 1t is doubtful whether Wall
street bankers could have done so
we'll as did these Philadelphia street
ear conductors in distributing this
stock.