Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-12
!, s. CERTIFICATES
ATTRACTING PUBLIC
Latest Issue Brings Out
Larger Bids From Indi-
viduaT Investors.
BY ]. c. ROYLE.

More individuals than were expected
put IN subscriptions for the new $780,
900 900 issue of Treasury certificates OF
Indebtedness. This indicates. according
to Treasury officials, that there are
large number of Americans who have
idle money, which they are willing to
tie up for e year, the life of the certih-
Gates.
Bankers feel that these investors are
distrustful of conditions at the moment
and are willing to accept small rate
of interest in return for absolute safety
and liquidity If business and industry
and stock prices improve, the investors
can get the cash readily from these Sc
curities. If the opposite is the case,
their funds are safe.
Bank Subscriptions.
Despite this rush of individual In
veStors, the large part OF the issue.
which has been overSubscribed more
than three times, has been taken by the
banks. The banks have large volume
of funds for such investments. In the
first place there is a lack of borrowers,
since business men are in waiting
mood. In the second place the banks
are much more chary of making loans
than they were year ago.
These conditions account for the IN
difference with which the recent drop
in the Cleveland rediscount rate to 80
per cent was received. 1t is felt in f.
nancial circles that in the present state
of affairs news of rediscount rate cut
amounts to little. If borrowers wanted
to inaugurate programs OF expansion,
the rate would not stop them even If
it we're far higher than at present In
the Reserve district.
The overSubscription OF the Treasury
issue was not surprising. 1t was offered
at a time when the stock market was
in the depths and cautious investors
were apprehensive. 1t also was bril-
liant piece of strategy on the part Of
Secretary Mellon, who dated 1t in such
! a manner as to hold down congressional
appropriations The issue Is dated to
mature June Is, 1881.
1t will, therefore, come within the
fiscal year 1881 and will add $500 OOO,-
900 to the amount that must be pro-
vided to meet obligations In that year,
The margin between black and red on
the balance sheet of the 1881 fiscal
period will be narrow and this addition
will tend to hold down expenditures.
On the other hand, no difficulty
whatever would be met in financing the
maturity through short-term obligation
between June Is and June 80, 1881.
Building Industry.
| The banking trend is having a de.
cided effect on the. building industry
| Most real estate men, builders and
some bankers are wailing, Those were
the happy days" They refer to this
pre-crash period, when money was
| easy, business brisk and appraisers
| soft-hearted. Many blame the mortgage
banker as being too restrictive in the
selection of security, too conservative
as to appraisals and too insistent upon
periodic amortization. The bankers, or
the other hand, say that for some time
business was too active to last and toe
literally handled for safety.
The sound bankers, according te
A. A. linn, president of the Mortgage
Bankers Association of America, feel
that the real estate mortgage must moi
be made the tool of wildcat promoters
or the instrument of spectators un'
willing to risk their own funds. The
mortgage bankers are coming to resisi
| strongly the erection of buildings, moi
to fill an economic need, but to act al
a monument to the individual or in.
Stitution constructing them. Such
building, they say. induces unfair com.
petition and depreciates the value oil
properties still far removed from OBJ
solescence. The bankers conclude BY
saying there are ample funds for any
sound project.