Evening star., 1953-04-14
By Donald B. HodIey

"Free riders" were a factor in
the large oversubscription to the
Treasury's new 30-year 3H per
cent bonds, which reached the
market yesterday, it was reported
in banking circles today.
Under the terms for the long
term issue, subscriptions could
be placed on the basis of 10 per
cent down and 80 days to pay in
three equal inStallmentS.
Subscribers could pay down
their 10 per cent and if the
bonds go up after Offering, they
can collect profit and get out"
said a leading banker. THE op-
portunity for a quick profit with
little down was too attractive.
Many took advantage of it,"
The trouble with this sort of
thing is that the price probably
will go up and then later, when
the "free-riderS" start clearing
out, it will come down, he said.
Treasury officials pointed out,
however, that terms were even
more liberal in May of last year,
when ga per cent bonds matur-
ing in 1850 were marketed on
the basis of 10 per cent down and
four inStallments extending for
six months. That 28-year issue
proved a disappointment and de-
spite the opportunity for a free
ride gained a poor response.
Humphrey Answers Critics.
In answer to criticism from
Democratic Senators that Treas
ury financing plans were de-
f1ationary. Secretary Humphrey
last night replied:
THE concentration of short
term debt in the banks by the
previous administration was one
of the causes of imitation in the
cost of living which has cost
the American people billions of
dollars. A gradual placing of
more securities in the hands of
non-bank investors is a neces-
sary step for economic stability.
"The sale of long-term bonds
to these investors carries a
somewhat higher interest rate,
but this cost will be offset many
times over if it lessons the cost
and diSorganization of imitation.
The increased interest cost is
partly recovered in taxation.
"AS far as def1ation is con-
cerned, while a few prices have
declined recently, the cost of
living is near its postwar high,
employment is higher than ever
before and unemployment is
very small. With continued
heavy military expenditures, the
Government is still operating at
a deficit"
Pr6fit-Sharing Approved.
Stockholders of Bond Stores,
Inc, today approved an employees
profit-sharing plan and author
lied the abandonment of a
stock-option plan approved in
1851.
At the annual meeting in Bal
timore, President Barney Ruben
pointed out that no options were
granted under the discarded
plan.
Mr.. Ruben reported company
inventories had been substan-
TALLY reduced at the end of the
last year to $18,464,272 from
$21, ,780,450 year earlier.
Because of the current low
clothing inventory. Bond factory
employees have been working full
time and it is now anticipated
that such a work schedule can
be continued throughout the
year. he said.
Allegheny AirlineS Extended.
Allegheny Airlines. formerly
All-American Airways was re-
certifcated by ythe Civil Aero
nautics Board today and its
seven-state system was extended
to Cleveland, Ohio, and Hunt
ington, w. Va.
The Cleveland extension will
permit Allegheny to operate di-
rect service between Cleveland
and New York.
The new services will be ef-
fective June g, but Allegheny
plans to request VAB authority
to innaugurate operations prior
to this date.
First Anniversary Marked.
The Washington office o1
Francis I. dupont & Co. today
celebrated it's first anniversary
The first year has brought
rapid growth, which exceeded
all expectations, declared
Stephen M. Smith, manager o1
the office.
In February, the office had tt
change it's telephone number ir
order to put in larger facilities
to handle increasing business.
Gas Sales Lag in March.
Sales of Washington Ga:
Light Co. in March totaled 3d.