Show r Inside I ns l ite ue t Stuff By PAUL 1 j r t w WASHINGTON A The The adventure of ot Se Secretary r Morgen au and and the bond dealers d during the last 10 days may be mystifying a to t i tile the public but not to M Mr and the Yo bond dealers They understand perfectly per per- what happened Also they understand each other better now fc J J although of course courie they are not saying laying anything x r 1 ral tor about that out loud pond Bond Table To ro outsiders it may sc seem odd that th th v. v tr treasury aury was able t to float a f note issue Issue this week at nt the same interest and approximately the same maturity as the Mu sue ue t for r one of that amount ilch bich failed a n week earlier It looks If if th there h re re must have been some ge blood and aUd thunder In inthe the n. n There was was not ATh inside story Is not a movie r. filli-r. Ier r but A it modern fable fale in fic tie fi- fi c. c c e with a lesson for tor Mr Mor- Mor C tin i r si ii rant rant- Inside Stuff C Continued e from Tare One n. n You might call It the leason lea tC- Ics Ics- son on The Economizing Master Muter and the Gravy Hounds Mr has been cutting down on on gravy for the bond dealing dealin hounds month by month giving them smaller and smaller opportunities for a a subsistence profit profiL In fact some of at the hounds have been barking among themselves that Mr was WM not only an economizer mizer but A. A a chiseler r. r They became convinced of It when he he- started making them bid for tor bore bare bones under er the auction bidding system of bond bone bond Dealers flotation They deWin deWin de de- de- de Win Hunger elded to teach the St Strike economizing m master mas mas- tel ter a lesson Jesson by goon go- go going going go go- ing on ona a hunger strike when he put the hundred millions before them then at the time they were in a peri period d dof of liquidation With the tho banks Tho The strained per period o o offered them a subtle subtle sub sub- tle tic opportunity to stress their feel feel- ings Now ow no politician will undertake to say a n good word for bond dealers but Mr had obviously sharpened his economizing to the breaking point Their side of the story is that they should be treated as good customers customer No m manufacturer er tries tries' to o chisel prices on h his c customers customers cus cus- at least leut not to the limit of taking sixteenths eighths or quarters quarters quarters of ota ofa a point from them especially If the manufacturer expects expect to tore re remain remain remain re- re main In business very long They made that point clear to Mr The proof of this story lies in one feature which the successful by Issue issue Is Is' sue this week differed from the Unsuccessful unsuccessful unsuccessful un un- successful one last week Mr Mar Mor eliminated the auction bidding bidding bidding bid bid- ding system in the successful issue He offered the new note at par The disgruntled beagles immediately overlooked their liquidation situation situa situa- tion and oversubscribed the Issue You ma may be reasonably certain that that after this lesson tile the auction bidding system will wUl be used rarely by Mr if it ifal at al all Th This This' i d does es not noI mean that everything everything everything every every- thing is happy now in the government govern govern- meat ment bond market There are hints that the r returning strikers still sUU consIder consider con- con sIder Interest rates to be too too low Whether there Is anything they can cando cando do about this is problematical But you ou may be sure that If Mr Morg Morgen n- n thau fixes the proper rate he will have little difficulty with government government govern govern- ment meat financing in the immediate future There is Interest no place else elso for Rates Bates money to go Too Low Opinions c can can- o n n- n to d differ fer about how long the government can canco co continue to finance deficits comin com commensurate corn com in m with the existing one Some good authorities subscribe to the the optimistic vie view that it might continue as much as five years all other other things being They hey base bas this this' deduction n on the fa fact t that the French debt now is twice the French annual nat national income whereas ours is but one half of oC our national income At an any rate the situation is now safe President Ro Roosevelt has hu been privately privately pH- pH advised by some of his b best st friends fiends that features of the new newT T r V A expansion bill bm are are of very doubtful constitutionality const Copyright 1935 for forThe The Telegram i I |