The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-03-14
TEE FINANCIAL SITUATION.


and strength Of bonds. Issues and au :
,horizations Of new securities other than
.tocks were far greater than In any pre-
NIouS period % the year. They amounted
indeed for the eleven business days of
this month 20 about Si3S, 900 .OnO. - COM
pared with ga 600 600 for the entire month
Of March last year. The new offerings
were absorbed with unexpected rap1dity
and eagerness and at the close OF the
week negotiations were under way for
quite a. important and extensive NO.
tations a. were announced IN the week
then closed. All these offerings are
obviously made or contemplated IN re-
spons@ 10 \ healthy demand from in
vestOrs here and also tn an urg~nt for
aign demand. for IL - we'll known that
much mora than the customary portion
~ recent issues has been placed abroad.
and two or three differences from the
movement also occur logically and oh
viously II ia naturally obvious that tho
demand for bonds among investors
demonstrates . great growth os con-
fdence in the securities % the big cor
porations. II the objection 10 made that
the sale ~ bonds by . big banking house
or a banking syndicate means principally
a distribution % them among other imam
cial institutions and banking houses
here and abroad u 10 plain that the bag
and little bankers believe In the securities
they are taking or else would not load up
with them And II ~ even more apparent
thar the corporal ons i>suing the new
securities are supplying themselves with
as.a, aaN - rnaY
those funds for labor and materials in
such a manner a. must inevitably con-
ducs to the general advantage II business
Idle money IN returning to business uses
TO a greater extent than at any previous
time ~ the year That such n return OF
funds IL conducive TO new and increased
prnsparity 70 ~ course another matter
no, suhlect TO dispute. The only QUESTION
that may he raised 10 a. to the continue
ton ~ The demand for bonds, a. to the
ability ~ all important companies TO
finance their requirements. Here - pre-
seuted the element of uncertainty a. TO
the continuation Of the foreign demand.
Undoubtedly ,oa large extent that foreign
demand 10 conditioned on the contro-
yersy over Government finances in Great
over radical tendencies there that comes
much IT The vast amount OF foreign
capital recently invested in American
securities In this respect the moment
IL peculiarly opportune for advantageous
sales II high class American securities.
= nd the avidity with which our bankers
and corporations are responding 90 the
demand indicates that they are entirely
alive to the opportunity. IL 10 demand
that NAV ebb with a change IN the po-
Iitical tide. and u ~ generally advanta-
geous that il has not been overlooked or
neglected. Hut whether or not induce
ment comes from political change To
invest IN his home securities the attitude
If the foreign investor. by training and
inheritance a more conservative and
srr,itinizng person than the average
American investor. has encouraged the
release 20 large amounts 81 idle money
here into Investment IN home securities.
Il has been one u the peculiArIties OF the
present Improvement in the bond market
that the foreign investor came IN first.
AT a time when American capital with the
experience - 1901 in mind was becoming
almost AZ timid as in the early part % that
besan IL come out after the foreign de-
mand had been IN considerable MEASURE
satisfied Another peculiarity OF the re-
cent bond offerings has been that they
have been put ont IN terms more adj
van;ageous To the investor than AZ any
time sine. the markets settled down from
the panic disturbances three years ago.
Very likely tins circumstance :. directly
related 70 the nigh cost ~ living. which
ImT-ls very many % even the most con-
servativs investors to seek a higher in
come return than would have satisfied
them as recently a. year ago. Thus
New York Cttv bonds. which are a. album
dainty secured a. anv other municipal
bonds m the world. are 90 be offered pTee-
entity AZ an interest yield % a.. per cent
80 also the current offerings % high class
railroad bonds 60 TO the investor at
pric. Welding him az least -, per cent.
The increase in the cost 81 living ~ the
decrease IN the value ~ gold whichever
way one may care - characterize the prin-
cipal economic development q recent
times "a undoubtedly the real under
lying cause - this increase in income
returns. IL ~ greatly to the credit -
bankers and corporation managers that
they have appreciated the new condition
and met u IN way that has already pui
more than a hundred millions ~ IDLE
money into circulation for business pur-
y. -e~
~ die to suppose that II the investor
m bonds " the highest class il impelled
~ ,ompelled to demand a higher income
return the investor in standard stocks
D. not alSn ~e~king a better income on
his money Stocks that attract him
must realize a higher income return than
m several ~ the Years preceding ISO5 The
iay IL the , or 3 per cent income re-
turn ~ stocks - not the present day. The
-'or khulier y no has long been Interested
~ particular company needs higher
return from his capital tn quite az great