Evening star., 1925-06-08
TREASURY ISSUES
NEW CERTIFICATES
Offering of S125,0 900, 900 at
3 Per Cent Disappointing
to Local Bankers.
By CHAs. p. sHAEFFER.

By CHAS. p. SHAEFFER.
June financing will take the form
or certificates OF Indebtedness to the
extent of s125.00G. 900. dated June IL.
bearing interest at the rate of , per
cent and ma t&eing in IL months. it's
announced AZ the Treasury.
lhe issue proceeds, together with
the cash balance Of about $3.50. 900 900
now on hand, June Is tax receipt
some foreign debt rcpayments and mis-
celianeous income will be sufficient t.
retire the $469, ,1SS.100 of Treasury A.
per cent two-arida-ha -half-yesr notes
Laillng due the middle of the month
Inus II is seen Secretary Melons
plan not only effects a reduction IN
the amount of debt, but places the
new obligation at saving in interest
payments.
Local bankers. generally. complain,
OF the small interest rate the issue
pears Whlle expressing little doubt
that the Offering will 20 begging.
Washington financiers think the nres
ent money market warranted a slight
lY higher return. It is recalled. how
ever. that only last September an Of
ferinG of 1856. 300, 900 of like pa per wa
successfully distributed at the exceed
lnSfy low rate of pa per cent. and
every credit is due Mr. Mellon for ar
ranging Government borrowings a.
the most economical figure possible
The June issue is the second Of the
usual quarterly offerings this ves,
the third of which will come in Sep
tember.
McFadden Bill Raped.
Representative McFadden's efforts
to demobilize the Federal Reserve
ments" are critized in an article In
the current American Bankers Aseo
citation Journal by E. f. Ageer. azsn
ciate professor Of economics AZ Co
lumbia University. Agger declares
that from a credit standpoint the
war is not vet over. and declares the
Representative plans ''are eitter
based on individual preslIrnptiors
as TO what Reserve Bank prac
tice ought to be or they lack poini
altogether.
we have almost half of the
worlds visible supply of gold" Nj
Agger SAYS. Our price level is over
% per cent above the pre-war level
The basic element in the price Ieve
under a gold standard is the value
OF gold. The nations of Europe are
trying TO get back on a gold basis. and
1t is our interest TO help them. This
means that much of the gold thai
has come to US will have TO be given
back. That will be attended by sweep.
ing changes in discount rates and IN
prices"
Feels Danger in Change.
Under such conditions. he savs
nothing should be done TO weaker
the only agency that can adeauateIy
safeguard our interests" and "auy
restriction of the efficiency of the
Reserve System is unwise." as would
be the result, as he sees II, of the
McFadden bill. The changes it pro
poses would restrict Federal Pc
serve note issue based on gold
and open market acceptances
and would permit banks to carry in
their own vaults part of their legal
reserves now in Federal Reserve
banks, Mr.. Agger says. in part:
Any measure to promote mobility
and elasticity in credit will have the
tendency to strengthen Capitalization.
! The question is whether the strength
and fiexibilitv regarded as essentla
for war is 70 be deliberately sacrificed
in times of peace.
The charge that open-narkei
operations of the reserve banks dur
| ing 1924 were responsible for speCu
lation in stocks and grain can hardly
| he made 10 hold water. The reserve
| banks can make no speculative loans
| For the final use of banking credii
| the member banks are responsible
! Reserve system policy NAV loosen or
| tighten money, but speculative booms
| develop under various money condi-
| tions and are not limited TO periods
\ of easy money. Certainly they aEe
not solely dependent upon reserve
system open-market policy. During
| 1919 there was a big speculative boom
when the reserve banks We're out a.
the open market altogether
Bank Votes Dividend. =.
The Bank of Commerce and SAY
annual dividend Of 4 per cent, psH
able July ! to stockholders of record
! June 20.
| Optimistic statements from bankers
at this season Of the year are few
and far between. but John NJ. Rio
don, cashier and active head of tho
| institution. sees no need for con-
plant. Despite the low ebb in DE-
posits," he says, the bank is holdinG
its own in most gratifying
| manner.
May Business Fell OF.
A majority of early calculation
made by the Department of Con1mevcf
as to the actual state of business dlJ!
ing May indicate decreased activity
| over the country, as compared Wit
the previous month.
Indices Of production and prices u
pig iron. wool silk and locomottS'