Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-03-02
SECURITIES LOWER
ON LOCAL BOARD
Weak Tendency Prevails in
Declining Market-Liberty
Bond Situation.
BY CHAS. p. SHAEFFER.

The declining tendency which has
dominated the New York Stock Ex-
change and other ma or markets dur
ing the last few days appears to
nave cast its germ on the local
board as well, securities there again
selling at unchanged to weaker levels
today.
Capital Traction stock, the cynosure
OF all eyes, due to its possibilities
as link in the great North Ameri-
can chain. sold off to l15i2 on Hghr
volume, consisting of so shares. \
certain clique on the local exchange
believes the issues present level is
too high, at the same time admitting
it will undoubtedly he taken over
by the North American Co., if n sat
isfactory absorption program can be
worked out at a figure considerably
higher.
Little is known Of the carriers
earnings so far during 1926, state
ment for January not yet having been
filed with the Public Utilities Com
mission. In 1925 it failed by con
siderable margin of meeting it's 7 per
cent dividend requirements.
LanstOn MOnotype was in good de
mand in declining market, total
of 260 shares selling off ] point dur
ing the day to 81. Merchants Trans
fer and Storage preferred was easier
at par and a half. with Potomac
Electric Power. preferred. unchanged
at 107. Four shares of Riggs Bank
sold at 47512, Mergenthaler was OF
to 200. and Merchants Storage com
mon lost fractionally to 120.
Liberty Bonds Situation.
Since the first of the year United
advanced substantially, some issues
rising over l per cent per bond. IT
is the opinion of G.. b. ChildS & Co.
Jas specialists in Government securi-
tiles, that unless underlying COM
mercial conditions and the tendency
of money rates become cOnspicuously
altered Il still further advance may
be reasonably expected in issues of
the United States.
AS speculative instincts are toned
down and more conservative atti-
tude prompts pOssessors of last years
business profits to transfer them
safely 20 sound bonds. Childs points
out, we may witness a persistent
demand for more obligations than
the market can supply except ut
much higher prices. The liquidity or
quoted market ability of such domes-
tic loans IS always an importan:
factor. That characteristic applies
primarily to United States Govern
ment obligations and instrumental
ties. the latter being known as tax
exempt Philippine, Porto Rican. Fed
eral and Joint Stock Land Banl;
bonds.
Change i'm Rules i'm July.
After July >. next, IS 900 in the
aggregate of Liberty As and 4A $ and
Treasury As and 4Ls will continue
to be fully taX-eXempt when held by
an individual, but when owned by
a corporation any amount of any
Issue will remain non-taXable. Since
the taX-eXempt feature now applies
to Il maximum of only $50 900 Liberty
As and, Az S plus IS, 900 Treasury and
Liberty As and AIS. totaling $50, 200
in the aggregate, there will likely be
little. if any. effect on the market
which would not be more than OFF
set by purchases on the part of cor
porations. if some individual holders
of $50 900 Liberty bonds should de
eide to sell their bonds. BY retain
ing the bonds and paying the tax
on the income, the average individual
investor may reasonably expect to
benefit by an appreciation in their
market value sufficient TO more than
offset any tax he would pay on their
income.
Prospects for Profits.
The question today is. ''How long
can Liberties be retained" Holders
of short term or early optional bonds
and notes cannot participate in any
upward march of market values, be
cause their early "callable" dates de
Drive them of any opportunity I"
move far away from par, toward
which figure they are destined to de
cline gradually. Consequently. the
sooner Notes. Seconds and Thirds are
exchanged for the longer term ISSUES
the greater are the prospects for oh
tanning price profits, which should DC
cur with each move or operation OF
the Treasury toward a reduction OF
the national debt or its refunding Al
lower interest and yield levels.
Within a much shorter calCulabe
period of time than is generally In
agined every United States Govern
ment bond and note issued to pay for
the last war will be actually retired
by the annual absorption for the sink
ing fund. That fund automatically
increases each year and it's appetite
is constant and enormous. Conse
quently. every new loan will no doubf
be timed to serve the needs of that
fund which is annually erected by ap
propriating tax revenues.
Bank President Home.
Maurice Otterback. president of the
AnaCoStia Bank, with Mrs. Otterback