Bisbee daily review., 1908-11-24
DEMAND EXHAUSTS THE
 BOND SUPPLY
Bankers and Cookers at Wits End to Devise Means for RepleniShing Stock of High Grade Securities.
(Boston CommereiaI.D


 Last week the head of a great in ternational banking firm said: 'sWe are entirely cleaned out of bonds and I do not know what we shall do tC replenish our stock" The remark is characteristic of present conditions in the bond market. Of course, there are plenty of bonds for sale to the public, but in view of the vast amount of investment securities taken out of the market during the present year the floating supply has been reduced
 That investment bonds are becom ing scarce is the experience alike of dealer and customer. The reasons for this condition are apparent. When prosperity was rampant, bankers were alarmed at high money rates and ceased to loan money to construction enterprises. This caused a suspen' sion of new projects, and in the two or more, years which have interver- ed. marked curtailment in the out put of new securities has resulted. Meanwhile the panic has ended, and the r5pid accumulation of idle money at a time of business stagnation, to- gether with a broad demand for bonds, has resulted in rising prices for these securities.
 In this connection a well-known fnancier predicts further rise in in yestment securities. He says that rich capitalists no longer can use the money of insurance companies for speculative and development pur- poses. Also. he believes that the banking departments, both national and state, no longer will permit banks and trust companies to engage in promoting enterprises. In other words, the construction of new on terprises will be confined to private bankers This policy will retard the industrial growth of the UnIted States, he believes, for generation and will result in a diminished output of new bonds for years to come. If this view is correct, then his predic- tion that active per cent bonds will sell from 106 to 1oS, and that 3h per cent bonds will reach par, may be full filled
 On the other hand, some bankers and economists anticipate wide spread industrial revival and rising money rates. Call money shows frmer tendency and time money, at least for one-year loans, is quoted at AZ per cent. If this condition long prevails, then 4 per cent bonds at premium will not be attractive to some capitalists. Furthermore, many merchants purchased bonds for tenn porary investment and such holdings will be sold as business improves.
 At least one important Insurance company which has purchased large quantities of high-grade bonds during s- hr1Jy In farm mortgages in the west. This Is mentioned to Illustrate how factors in the bond trade are balanced.
 Transactions in the bond market of the New York stock exchange were in reduced volume compared to those ot a week ago. But the bond mercH ants who do business over the counter and employ travelling salesmen, re port a large business and most of the houses are encouraged at the outlook From the various bond centers of the country likewise comes news of i'm movement. The conviction of Charles W. Morse is a notice to foreign in Vestors that high finance" in Amer ica now leads to a prison cell, and increased confidence in our securities among English and Continental in VESIDES SLOulu lOllO"s -ASAAAJ AN~@ bankers are impressing on foreigI customers the fact that Taft's election means that vested rights hencefortl are safe in the United States.
 New York shortly will offer s12,OOO' 900 of per cent corporate stock ant assessment bonds. As the municipal ity's obligations now sell below per cent basis, undoubtedly the forth coming offering will be marked success, -....
 Viewing all factors relating to tn bond market, present and future, an striking a balance, the conclusion l that further advances In bond price may be anticipated, providing reylE ing prosperity does not cause abnol maHy high money rates.
 Allis-Chalmers s. still are obtain able at an attractive price. The may prove cheap if genuine indus trial revival appears. During yea of depression, the company's eaTI