| Show THE DAILY NEW V YORK Financial Fin a n c i a I Whirligig W h i r I i gig Written for The Tele Telegram by JAMES McMULLIN NEW YORK YORK Financial Financial insiders learn that the treasury is considering considering consider consider- ing an art unusual experiment in connection connection connection con con- with the refunding of 1 in called Liberty bonds bond this ring pring The bulk of the refundIng refund refund- Ing issue will probably be in notes bearing 2 4 3 or 2 8 7 per cent interest in interest interest in- in terest and running for five years or more This t Is in line with recent practice and follows Secretary Mor Mor- aim of at financing the gov government ov- ov still more cheaply The market has been trained to swallow wallow such an Issue krue without protest if it not with gusto But along with these not notes you may also see a comparatively small offering of 3 per petS cent consolidated bonds bonds- callable bonds callable in 15 years but with no definite maturity Chances Chance are they would go like hot cakes because because be be- cause of the higher interest and limited amount If that happens happen a much larger Issue of similar perpetual perpetual perpetual per bonds at bonds at lower interest interest- could be expected a little later The tryout would have been planned to allay any une uneasiness iness that might otherwise be inspired by this thi unorthodox unorthodox unorthodox method of or raising money I Bon Bonds without maturities have been successfully floated by by the British government in the past past past- but they are a a. complete novelty to the American treasury Experts Exp Agree it would be a very neat way to shelve helve the thorny question of ot federal fedral debt retirement inde- inde 0 New York is 3 intrigued by Secretary Sec baby bond venture venture but but not much Impressed Its It's understood that the government government govern govern- ment has three purposes in mind I. I To bring money out of hoard hoard- in ing that never has returned to the banks since the 33 crisis even crisIs even with deposit insurance 2 To give the average citizen a amore amore amore more personal stake in his government government govern govern- ment meat as a creditor This might help to tone down some of f the wilder demands for lor still greater federal generosity and Inflation 3 To show that Uncle Sam isn't entirely dependent on th the banks bank for the wherewithal to play the new deal cards 0 0 A lot of the subscriptions are expected expected cx- cx ex ex- to come out of or postal savings deposits That's O. O K with the postal savings system m. m Too many people have tri tried to use their deposits deposits de de- deposits de- de posits like checking che accounts accounts giving in ing the postoffice a lot of ot extra bookkeeping it doesn't care for e 0 Selling the bonds at a discount i is rated a nifty nitty way to assure a minimum of transfers and demands for redemption By paying no interest interest in in- terest in the first year ear and scaling it up toward the end of or the ten years ears purchasers are given every incentive to hold their bonds to maturity This method also means bookkeeping economy to the treasury treas treas- ury ury-it ury it wont won't have a raft of small coup coupons n to pa pay off oU every q quarter arter Here again theres there's English pre precedent prece prece- e- e dent for or marketing securities to the public at a discount The best New York c can n say for the Idea is b that it ft cant can't do much harm The only interests which could possibly be hurt are the town small banks with a large proportion proportion proportion pro pro- portion of at time tim deposits at low in interest in terest and and even here hero its it's doubtful that there ere will be withdrawals in volume Savings banks arent aren't worried worried wor wor- ried ned at all Insiders expect the tho treasury can get millions of customers even customers even without ballyhoo but ballyhOO but with a maximum maximum maximum maxi maxi- mum volume olun c of ot a few hundred million mil mit- lion dollars It will not become in independent in in- dependent of ot the banks with that size potatoes es A Wall Streeter remarks remarks remarks re re- re- re marks If It you ou call the bonds just juit babies' babies you wont won't be far wrong They'll never grow up 0 a Utility men are feverishly are preparIng preparing ing their case to submit to congress In opposition to the Rayburn holding hold hold- holding ing company bill They will get gel last innings at congressional hearings hear hear- ings logs and they're out to hit a ila flock k of at home runs There will be remarkably re re- little frothing at the mouth mouth po no matter what hat their real sentiments sentiment Leaders have decided that sweet reasonableness Is likely to pa pay better dividends di Power companies will be represented Individually y at the hearings rather than M as a group They fig fig- ure urethe he psychological effects will be better if it theres there's a. a as little appearance of ot ganging up as possible ible Interested New Yorkers realize that holding companies must justify jut jus their existence in terms of economics to operating subsidiaries if it they are arc to survive Evidence to that effect will be stressed ged Watch for a curious contrast Inthe in inthe inthe the attitude of ot eastern and western western vestera west vest ern era power groups The westerners western western- ers are likely y to ap appear ar a good deal more amenable to Wa Washington Washing WashIng- ton ideas Their chiefs are In closer touch with wiCk their publics 0 0 New York is beginning to have doubts about that staggering deficit F. F D. D R. R forecast In his budget mes mes- sage It amounts to only the comparativelY comparatively com com- ode modest t sum of Cf f 1800 for the first seven en months month of or the fic fiscal cal year In order to reach th the official al estimate of ot 4 4 outgo would have to 10 exceed Income b by h half 1 a billion dollars ft month for lor the me next live five months month That's a lot of money to give away away even even for the United States government The poin isn't missed that paintIng painting paint paint- Ing the pIc picture ure in its iLc blackest terms s 's sets ts the th-e stage for lor the administration tion to point with pride a little later I 0 Some New York railroad men are skeptical about Tade crow cross ing elimination as a major work k relief project They contend that many grade crossings Involve lengthy engineering problems and others are tied up in questions of property title outside the right of Iway way They add that di diggers gers and concrete workers workers who who need jobs jabs first first are are the last to be employed on such projects One observer remarks remark that the total cost of or eliminating grade crossings would be more than the railroads themselves are worth these days S 00 Wall Wan street comments that Arthur Arthur Arthur Ar Ar- thur Cutten shouldn't be too blue about the order forbidding him to trade on the Chicago grain market Winnipeg is still sUll open to him and so are the security exchanges They offer oler quite a scope even for a speculator with Arthurs Arthur's colorful tastes 00 Its It's all aU very well vell for Joe Kennedy Kennedy Kennedy Ken Ken- nedy to tell the boys they have nothing to fear from the securities and exchange commission as long longas as they act in good faith but faith but WallStreet Wall WallStreet WallStreet Street wonders just how much weight his hi views will carry with lawyers who make a business o of fostering strike suits The They are a menace that cannot be disregarded Also Also in in view of the department of or justice antitrust suit against th the Republic McKinney merger mer mer- ger its it's its it's suggested that a word from irom the attorney general would be bein jn in order before theres there's any deluge of ot corporate financing Financial circles crave some kind of guarantee guarantee guar guar- ar- ar antee against further new deal short circuits 0 0 A New York student of or history wonders whether the Italians will have better luck lu-ck with Abyssinia this time than they did in the last century The army sent over then to pick up Aby Abyssinia inia as a colony took a terrible shellacking To be sure it was handicapped In open battle a colonel sent back the following message to his com corn commander commander mander There seems to be a mis mis- take M My map shows Im I'm surrounding surround surround- ing a valley vallejo It turns out to be a mountain What do I do now Copyright McClure Newspaper Syndicate |
