Devine Guidance

Until the World War the public debt of the U. S. never exceeded $2,500,000,000. But by 1919 the liability side of the U. S. ledger carried a then-stupendous total of $25,000,000,000--and Wall Street had a lucrative new field, trading in Government bonds. First kingpin in this field was Charles Frederick Childs, who sold his business in 1928 after flinty Andrew Mellon's slashing of the public debt by $10,000,000,000 slashed the turnover in "Governments." Although Trader Childs bought back his firm when Depression I brought a new tide of Federal financing, he is no longer kingpin. Now dominating the Government bond business is C. F. Childs's onetime head trader, Christopher J. Devine.

Son of a Newark fireman, Christopher Devine went to work for Childs in 1925 as a $25-a-week office boy. Three years later, when he was only 23, he became head trader. In 1933 he launched his own firm with eight employes. Now it has 150. On its shelves often sit as much as $25,000,000 in Government securities, and Christopher Devine's pockets are supposedly lined with several million dollars. Blue-eyed, quiet, he belies his repute as a plunger. His greatest coup was last June's buying of an entire $60,000,000 issue of Pennsylvania Tax Notes. His astute bid of $109,928,008 plus $500 was high by precisely one cent. Christopher Devine then unloaded the entire $60,000,000 in 45 minutes.

With a monthly turnover of more than a billion dollars, C. J. Devine & Co. is said to handle more Government bonds than all its rivals put together. Last week C. J. Devine & Co. was busy, for the Treasury offered its first new money financing in the open market in over a year--$400,000,000 of twelve-to-fourteen-year 2 1/2%, bonds (maturing Sept. 15, 1952, issued in denominations ranging from $50 to $100,000) and $300,000,000 of 1 1/8% notes(maturing from June 15, 1943, issued in denominations from $100 to $100,000).* Holders of $433.460.000 of 1 1/4% Treasury notes maturing December 15 were allowed to exchange them for the new issues par-for-par with interest adjusted.

Last week's financing was $200,000,000 bigger than Wall Street had expected, but, unlike certain industrial issues (see col. 3), was gobbled by investors, being oversubscribed some ten times. (C. J. Devine & Co. opened quotations on the bonds at 101 11/32 to 13/32.) Bringing the public debt to an all-time high of $38,328,000,000 and the Treasury's cash balance to a phenomenal total of some $2,300,000,000 (Secretary Morgenthau wants to be ready for any event in the U. S. or Europe),/- the new money is to help finance pump-priming for Depression IG. Mr. Morgenthau expects to borrow about $1,400,000,000 more for the same purpose next year.

* The Treasury also made the usual weekly offering of $100,000,000 of 91-day discount bills at five hundredths of 1%.

/-Scarcely were the new bonds sold when war-scare this week sent them and the rest of the Government bond market reeling in a full-fledged break of 7/8 of a point.

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