The Washington times., 1911-01-29
hreb RofessionaL-Some Interesting Washington Bank {
EASY MONEY IMPORTANT FACTOR
IN CHECKING MARKET LIQUIDATION
Recovery Follows After Slight
markabe Improvement in Tin TradeFnanng Plentiful
Bonds Show Great Actvfy-Review OF
RY JOHN GRANT DATER,
Special Financial tn. Publications

tuAucAAI nepreSentAtlNe tne Munsey
+ been somewhat different, for a power
full banking group would have been
placed in control Of the entire market
/ for the bonds, and the issue would have
been promptly marked up to 1921 Or 103,
instead of lowering around 11 as at
present. When the Morgan bid of 100.S9
was announced shortly after o'clock
Tuesday, CONSERVATION seized upon
many dealers who were heavily short
of the when Issued certificates, and
these were advanced sharply on cover
ing operations.
The mysterious listing of the citys
Az g in advance of the sale Is explained
by the syndicate bid, and the uprush in
prices which followed when 1t was be-
lieved that the syndicate had been sue
cessful in securing the issue. 1t is ap-
parent that group of bond brokers and
dealers were engaged in some scheme to
bear" the issue, but whether for the
purpose of scalping a trifiing profit, or
for the more sinister purpose of influ
encing an under subscription and a
higher interest rate for the unsold por-
ton, does not appear clear. 1t is now
known that the when issued receipts
were sold short in large quantities at
1O0&, and as the city cannot sell bonds
below par. the possible profit was 50
trifing that one wonders If another
ALlOL4NS "dS IlOI udEh Vi lIl6
Effects on Other Issues.
Whatever plan the syndicate had in
connection with the city issue was, Of
course, spoiled by the distribution Of the
issues among many holders. This en-
abled the shorts to cover without diff
Guilty, and to put out additional short
lines. II they felt SO disposed, for there
Is no longer any fear on their part of
an uncomfortable squeeze. The maneu-
vering in the bonds. however, came to
sudden stop on Thursday For in
stance. on Wednesday, total bond sales
on the exchange represented par value
Of S6,S82.OO0 the largest volume in very
many months, of which no less than
A,14l.000 were IN New York City AIS.
On Thursday total sales fell to s.. .sO2, ,OOo
toward which total the city issue figured
to an extent of only a few hundred
thousand dollars par value.
Whether the low price of the city is
sue Will have much effect on other
issues, and thus prove a determining or
influencing factor on impending new
financing, Is spoint on which opinion
is much divided. Naturally, 1t must
nave an influence on municipal issues,
though some persons hold that in con-
sequence of excessive recent borrowing
the city bonds fall within a class Of
their own. Although bond sales on the
tNCndHBe are DdcR TO the old nSureS,
the transactions are made up largely OF
speculative issues, such as convertible
bonds, which move up and down like
the stocks they stand for, and, in con-
sequence, neither volumes nor price
changes throw much light on the sub
ject-
Some Current Rumors.
Wall Street is filled to overfowIng
with rumors of impending bond issues,
but no very important new capital de-
mands were announced last week. This
was not to be expected during the in
terval given over largely to the ety
sale. Among the various rumors, which
somewhat assisted the market toward
the close, was one dealing with the
listing of Union Pacific stock on the
Paris bourse, which was promptly pro-
nounced a canard, and another bearing
upon possible sale Of So, 900 South
ern Pacific bonds to Paris. This, too,
at least in the form the rumor took,
has very little foundation in fact. Paris
has not as yet fully recovered from the
shock occasioned by the Government
suit enjoining the freight rate advances.
which followed Immediately after that
market had closed negotiations for the
Chicago, Milwaukee and St Paul de-