The herald., 1898-12-17
The ADVANCE IN BONDS
WILLINGNESS TO ACCEPT A
LOWER RATE OF INTEREST
MEXICAN INVESTMENTS RISING
Statistics Of u. S. Circulation-Im-
provements in Submarine Arc
Light-Electric Decision
OFFICE OF THE HERALD,


Los Angeles, Dec l6, 1898.
There has no doubt been more or less
speculation in railroad bonds, not only in
those of low price, which might be consid-
cred fitting material for such operations,
but in the higher priced securities of an
assured interest-paying quality. Neverthe-
less, the principal influence in the market,
according to Bradstreet's is generally con-
ceded to be the large investment demand,
refecting the abundance of capital in the
country, the pressure to obtain employment
for it, and the increased willingness which
has developed under these circumstances to
accept a lower interest return upon capital
than but short time ago was considered
possible.
The movement of the bond market since
the election and since the definite assurance
was given of peace with Spain has been par
ticularly interesting. Its activity has been
OF record breaking kind, the total transac
tions for the month OF November in the
bond department of the New York stock ex-
change rising to the almost unparalleled
figures of Sl06,000,000 par values, and, al
though the market at present has quieted
down, the daily transactions in bonds for
some time past amount up in the neighbor-
hood OF Y5,0OO,0O or more, an amount far in
excess OF the daily average for past years
1t is noted that the progress of the mar.
ket represents a constant search for mate
rial of an attractive kind and it is there
fore very changeable in the objects of its
attention. The advances that have taken
place in various parts of the bond list have,
however, been in the main exceedingly well
hold and whpra sanurifiac bax. IL
preciable advances, as in the case of the
new bonds of reorganzed railroads (of
which the Union Pacific and the Northern
Pacific may be considered the most striking
examples), there has been little or no
liquidation, and, on the contrary, at con-
cessions, securities of the class Just referred
to seem to meet with a renewed and steady
demand. The most striking feature of the
market, in fact, has been the steady alb
sorption of securities of the better kind. 1t
represents the turning of a large part of the
present accumulations Of funds in the hands
OF investing corporations and private capi-
talists to securities of this class, accompa
MED by general acceptance of the idea that
interest returns OH such securities is now
upon permanently lower level.
Incidents have been plentiful in connec-
tion with the upward tendency of bond
prices. Perhaps one of the most interest
ing OF them is the steadiness and advance
in United States government bonds of the
old and per cent issues in the face OF
sales OF those issues by banks for the pur-
pose of purchasing the new per cent bonds
II would seem, indeed, that the advantages
In respect to taxation which governments
present to investors have been more fully
appreciated as the offerings improved, and
to this may be ascribed the fact that rela-
lively heavy offerings have not stood in the
way of appreciation in the prices which the
United States As and 5s bring in the market.
Another feature of interest is the demand
which has developed for railroad bonds
which are convertible into dividend paying
stocks. This has been seen for some months
past in connection with the older bond is
sues of the Chicago, Milwaukee and St. Paul. |
some Of which have had remarkable ad-
vances since last summer on demands for
the purpose of converting the bonds into
the company's preferred stock. 1t should |
also be mentioned that the few new large
bond issues which have been brought out of |
late have been eagerly absorbed at home |
and abroad, an example of which was af |
forded by the heavy over subscription of the |
new per cent bonds of the Southern Pacific |
Hallway of California. The ready absorb. |
tion of the reorganization syndicate's hold |
ings of new Baltimore and Ohio As. and thef
promptitude with which the financial pub
lie only this week made applications to the
extent of eighteen times the amount of the
bonds of the Newark, N. j., Gas Consolida
tion which were offered for subscription are
further examples of the same kind
With the approach of the new year the
investment demand in the bond market NAV
be expected to increase. That, at least, is
its usual course. In fact, the present week
has seen an exceptionally large increase of
bond transactions, representing in large
part an anticipation of the January rein
vestment demand. 1t seems, however,
that the buying is already so large and eager
that it will be difficult to imagine its show
ing further growth unless bond prices are
to be carried to an extreme. What would.
indeed, seem more probable under the cir
cumstances is further extension of the
buying power of the market toward divi-
dend paying stocks.