Norwich bulletin., 1917-10-15
DOWNWARD TENDENCY
 OF THE BOND MARKET
Is Causing Trsasury Officials Concern
 To Check Shrinkase.

Washington, Oct. 14.-Treasury of ffcials, concerned over the downward tendency of the bond market as an outgrowth of Liberty loan financing, have determined to take steps to check the shfnkage in gilt-edge bond values SO far as consistent with gov ernmental action and sound financing.
 To this end the comptroller of the currency tonight issued 8 statement announcing that he had instructed all national bank examiners that they need not require national banks hold ing high grade bonds of unquestioned intrinsic value and merit to charge them down to present abnormal fig ures, but to exercise "an intelligent and conservative discretion" as to the prices at which the banks can con- tinue to carry such securities.
 This action. it is thought, will tend to prevent undue tightening of the Edoney market with the further de- cline of bonds. process which, if con- time, might lead to heavy losses by the investors in such securities and to the consequent detriment of .the properties upon which they are is : sued.
 Similar action was taken by the comptroller at heoutbreak of the Flu ropean war when security values dropped precipitately to low records. ities have been steadily diminishing in quoted values. High grade bonds of unquestioned value have shrunk until they are at the present time ai- most as lew. in many cases. as they were when the New York stock change was closed in the early days of the European war. Railroad and in dustrial bonds paying 5 per cent, and in some instances 6. are selling at be- low par. a situation virtually without precedent, with this single exception, in the history of the issues involved.
 Liberty bond financing has resulted in crowding the bargain counters with these securities. Banks lending mon- consistently compelled to reduce the amounts which they could lend bor- rowers. The comptroiler's action, it is thought. will go far toward check ing this tendency. His statement fol- lows in part
 Since the commencement of war between this country and Germany there has been a heavy depreciation in the quoted values of securities gen. eraly. including those of the very highest grade which have heretofore found a ready market in competition with government issues; and in many cases prices have shrunk to figures which are nanifestly far below the prices which would prevail under any normal condition. This shrinkage or marking down of values is partly due to the efforts of investors to sell other high claEs securities for re-investment in government bonds.
 ''In view of all conditions, the comptroller of the currency has in- structed national bank examiners that they need not at this time require na- tional banks holding high grade bonds of tunquestioned intrinsic value and merit to charge such investments down to present abnormal figures; but an intelligent and conservative dis cretion will be exercised as to the prices which national banks can safe ly and reasonably be permitted to car " such high class securities; and as to what proportion of the deprecia- tion should be charged or in any six months period"