| Show I THE DAILY WASHINGTON J I Financial Fin a L r Whirligig 1 i gig I Written v for Th The Tho Telegram r I By Dy JAMES McMULLIN NEW NEV YORK YORK The The June treasury financing of year 5 2 25 notes and of 14 12 year 3 bonds plus ulus conversion privileges into the latter for June and August term short-term maturities looks perfectly perfectly per per- orthodox on the surface Underneath it means the treasury has a again ain outguessed Wall Vall WallStreet Street in their perennial game of hide-and- hide seek The of offering erIn differs from local banking an anticipations anticipations anticipations an- an in four important respects 1 It makes no provision for converting the Liberties called for or payment in October 5 2 It likewise ignores of short ms Ic maturing in September and December 3 It doesn't approach the advance estimate of a issue this month 4 It adds unexpected millions to the treasury's cash balance bringing balance bringing the total to about apart from profits on gold devaluation So what So the stage is set for a further term long-term issue in September at record break I in ing low interest At the same ame time the treasury's treasury's treasury's treas treas- ury's mobility for dealing with recovery problems lems this fall is stepped up enormously Refinancing Liberties Skilful Skilful management of the government bond market made the thc 3 per cent interest attractive Now enough bonds will vilI be put out to fill the treasury's needs without sating gating subs subscribers subscribers' ap appetites appetites tip tip- petites as a three billion issue might have done If Ii the optional privilege of converting the shorts is snapped up the up-the the betting is 20 to 1 it will be bethe bethe bethe be- be the September and December maturities and Liberties can be refinanced at a n cost so cheap it would have been ridiculed as impossible by fi financial financial ti- ti sharps a few months back Big investors are arc as eager to take less than 3 per cent for their term long-term governments as asa asa asa a small boy is eager for castor oil But dont don't think they Wont Won't do so in September if the treasury's up build-up is as neat as it has been to date Its It's significant that you OU dont don't hear a solitary wail ail from the balanced budget brigade about the ruin luin of government credit by ing- ing although although an net not increase inthe inthe in inthe the public debt would have evoked fevered protests not long ago To Fight Depression Of course the government has complete freedom in the use or 01 its two billion pocket money Holders of maturing maturin debt who dont don't like conversion will be paid off off but but there wont won't be many of those The rest is live ammunition for the renewed autumn drive against depres depres- sion Sian Authorities predict a heavy national barrage barrage bar bar- rage in the relief and public works sectors be beginning beginning be- be ginning In two or three months Local anti- anti New Dealers will yell their h heads ads off about electioneering with public money mcney but ad admit admit admit ad- ad mit the beneficiaries are arc not likely to be im im- im pressed Many conservatives privately call federal federal federal fed fed- eral spending the most effective and least dangerous dangerous dan don form of ol inflation Wall Streeters get one consolation from this nifty device to combine still cheaper financing ing ing fiat at the investors' investors with expense expense more I lavish outlays outlays' o 0 treasury funds They figure the government must steer to the right in fi financial financial fi- fi matters until September mid-September at least Otherwise half the plan would run the risk of ofa ofa a serious erious flop a The trend toward lower yields on federal issues issues forecast forecast by Mayard Keynes last lost winter should benefit all nIl bonds corporate bonds corporate as well as government High-grade High industrial securities ties ties ties-if if should should be selling at nt a n tidy premium before the tho year is out The cheaper money gets the more they benefit The House of Morgan Insiders comment that the Morgan interest in security will not be entirely academic academic aca aca- demic hereafter even though the house has officially abandoned the security business Morgans Morgan's retains first rate contacts with a number of other firms which have acted as secondary see sec outlets in the past for issues sponsored by the House on the Corner These firms are g giving ving vp p deposits where deposits where they had any any and and in som cases Morgans Morgan's is gaining by the transfer of funds Its It's safe to forecast that Morgan Co will be consulted by its former associates as to the handling of future offerings offerings offerings offer offer- ings and that the advice of the big firm willbe will willbe willbe be tantamount to law Its It's also safe to assume that Morgan Co will usually be allotted whatever proportion of an attractive new issue it wishes for its own portfolio a Winthrop Aldrich wins high the financial district for his stand that New York City relief relic should be financed on a n you pay go basis instead of by a bond issue Copyright 1034 1934 Newspaper Syndicate I 1 |
