| Show I THE TIlE n DAILY DAIL WAS WASHINGTON INGTON J I Fin Financial a nW Whirligig Y 1 i gig Written t for rr The Tho Telegram i Dy By JAMES McMULLIN I NEW V YORK The YORK The flood of corporate fi financing financing financing fi- fi anticipated after the securities act was amended hasn't come through Off hand it looks as jf f the estimates of huge sums needed this year by corporations are all wet vet But the real reason for industry's continued disinterest in insecurity security security issues issues is quite different and goes much deeper There are dozens dOlens of ot companies whose credit rating is sound that could use from half a million million mil roil lion to ten million dollars for refunding and other purposes You would naturally expect them to take advantage of the exceptionally cheap interest rates now available for long term money by floating bonds Investment houses would be willing enough to do their part Yet hardly a one has so much as tapped at its shell and and heres here's wh why The banks banks especially especially several large New NewYork NewYork NewYork York institutions whose officers have been too busy maintaining liquidity to talk loan ap applicants applicants ap- ap ts for several years are years are out begging for business Their technique has been to approach corporations corporations corporations cor cor- they knew were O. O K and ask them if they would like to raise some cash If It the answer r was yes the bank representative would put on a sales patter something like this Dont Don t try to sell bonds now Think of the risks you take under the securities act and the trouble and expense of registering with the trade commission Well We'll be glad to lend you whatever you need for six or or orn n nine nine ne months and you can renew for six months more if you wish By that time the securities act will probably be toned down some more and you wont won't have to togo togo go 10 through all this hocus to float an is is- is sue Meanwhile look at the interest you save by borrowing short term money moner Hungry Banks This advice isn't exactly disinterested The banks are ravenous for sound loans Theres There's no guarantee that long term financing will be any cheaper or easier twelve or fifteen months from fromn n now some now some experts predict the contrary But a number of ot companies have followed the bankers bankers' bankers bankers' bankers bankers' bank bank- ers' ers suggestion suggestion attracted attracted by bargains in interest interest interest inter inter- est rates and the simplicity of bank borrowing as compared to the complications and hazards of securities act registration That's what some of the bi big New York banks which sold government securities in the second quarter quart r have been doing with their funds funds and and why you dont don't see many new bond issues The stand-out stand point is the evidence of renewed in interest interest in- in in terest in industrial credit by some of our most conserva conservative tive bankers S S Insiders will tell you that several New York banks which showed an increase in their holdings holdings hold hold- ings of federal obligations for the second quarter ter sold more long term government stuff than they bou bought ht during that period The net gains ains I were made in CD- CD or day 90 treasury bills bills bills- which hardly count That system leaves them in a mobile position if private credit expansion catches hold soon in a big way I Their published figures were perfectly proper proper but but they did create an impression of digging in behind federal securities wh which ch wasn't justified The real heavy banking de demand demand demand de- de mand for long term government bonds has come from the smaller banks scattered around the country not country not from Manhattan Passing Ping the Buck Word that the securities and exchange commission commission com corn mission will establish David in a aNew aNew aNew New York office to keep close tabs on market movements fails to worry stock exchange cir cir- cles des Instead they're quite pleased They figu figure fig fig- u ure that if S SEe E C is op openly on fn the job of supervising supervising super super- market transactions it will have to take the rap for any unusual price movements that may develop Conversely the securities and ryd exchange commission com corn mission is wary about exercising too much authorIty authority authority au- au of off th the bat The stock exchange gets word t that at it will be allowed to run things pretty much its own yn o way way way-at at least for lor the present There are signs of ot a passing buck-passing contest be bet between be- be t tween the he e exchange change and the commission The amenities will vill be scrupulously observed observed but but neither side w would uld take it amiss if the public 1 should get the impression that the other is re responsible responsible responsible re- re in case the market fails to behave as prettily as it should This doesn't imply that S SEC E C will become a chronic buck passer Its It's just that it doesn't want to be let in for anything until it has a chance to operate by the case method Pulling To Together eUler Insiders in the beer barrel industry have a a. a story on union union-e union employer loyer relations that's different different differ differ- ent from the Pacific coast pat pattern They say the makers barrel-makers and the coopers' coopers union function function tion smoothly as as a mutual aid society The makers hire union men and the unions see to it th through brewers brewer union ties ties that that only do domestIc domestic domestic do- do barrels arc used If a brewer is stubborn stubborn stub stub- born enough h to Prefer better aged foreign barrels barrels barrels bar bar- I he hes he's s told all about strikes Everybody's satisfied except the importers II I 1931 lUt McClure McClur pp t 1 |
