Evening star., 1933-09-18
TRUCE IN STRIKE
OF CAPITAL SEEN
Investment Bankers Indicate
Readiness to Cooperate
With Government.
BY DAVID LAWRENCE.

The investment bankers OF America
are ready to sit down with the Govern
ment and work out practical program
for the resumption Of long-term lend
ing Notwithstanding the Objectionable
features Of the new securities act.
This is the plain inference to be
drawn from the speech just delivered by
Robert E. Christie, jr., Of the firm Of
Dillon, Read & Co., who Is soon to as
sumo the presidency of the Investment
Bankers Association of America.
The United States Government" he
said, has recently handed to the in
vestment banker in the shar, of the
new securities act a new chat of the
waters he must navigate. The chart
has many unfamiliar features, and be-
cause of them some of our traditional
methods OF navigation may have to be
changed. 1t may be that the Govern
ment itself may want to do some dredg-
ing at certain points and remove some
OF the rocks shown on the charts which
may impede the freedom of normal nav
igation. Nevertheless. the chart is
there. It is the law of the land. It Is
our duty to adjust ourselves to it. Mis-
takes in the chart can be corrected, but
the ship must sail. Investing and long
term lending must be resumed"
Reflects New Spirit.
The significance of this utterance is
that it is the first word that has come
from the investment banking group
since the virtual strike of capital began
two months ago with the passage of
the new law. 1t reflects a new spirit
and new approach-a desire to find
common ground.
But 1t is an open secret that there
will be many among the investment
bankers who will not wish to bestir
themselves even at this call for Coop
GRAFTON. They have been so confused
by the perplexities Of the new law and
its many impractical aspects that they
feel the grave responsibility for the
present Stagnation of long term capital
should rest squarely upon the legisla-
tors who, with mistaken zeal, passed
law which today is doing more to pre-
vent unemployed people from going
back to work than any other single in
fiuence in the whole economic process.
Yet an unavoidable law is of no avail
to anybody and hence the determina-
to try by friendly discussions to find
new basis for a resumption of cap
ital financing is bound to have pro-
found effect upon the capital strike.
Few Important Issues Filed.
1t would be denied. of course. that
capital now is on a strike But the
fact remains that. with more than a
billion of securities to be refinanced
there has hardly been an important
issue filed for registration in Wash
ington at the Federal Trade Commits
sion. The announcement has come
that the law is going to be strength
ened, if anything This reveals that
the sponsors of the act still do not
understand the difficulties that are pre-
venting the bankers from taking the
risks of blackmail suits :. IS not the
Government that the issuers of securi-
ties really fear, but those purchasers
who will seek to take advantage of
the opportunities for civil suits on the
slightest grounds.
There are, to be sure, other reasons
why capital financing is held up. In
vestors do not know what imitation is
going to do to the securities they now
hold or may buy. Certainly the banks
are not inclined to buy long-term in
vestments if they do not know what
the standard weight and fineness is
going to be of the future dollar of
gold, if. indeed, there is to be a gold
or commodity standard. In the face
of these uncertainties it is apparent
that little financing Of long-term issues
will be tried between now and Janu-
ary unless assurances can be forthcom-
ing as to the manner in which the
new law will be revised to make it
workable.
copyright 1880