New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-04-02
Monday, April ?, 1917

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Bond prices worked lower last
week. though there was no pressure
70 sell and the volume Of business
transacted was the smallest for
long time. The incrtness Of the in
vestment market is not surprising IN
view of the important Developments
that the financial community looks
for this week. With the probability
that Congress at its special session
may throw down the gauntlet Of war
to Germany. it is not surprising that
investors arc conservative in making
new commitments. Moreover, it is
not likely that there will be any
change in fundamental market con-
ditions pending the definite settle
mcnt Of the international issue. Once
a decision is made, however. 1t Is
probable that the bond market will
quickly emerge from the stagnatlon
that has encompassed it for so long.
That the outlook for the general
investment market is better than 1t
was a month ago is apparent from
the developments Of last week. The
important thing was the sale by the
PENNSYLVANIA Railroad to its bankers
of an issue of S60,000,000 general
mortgage 41ss. The Pennsylvania
had the courage to enter the market
with bonds when other railroads
either kept away or resOrted to the
undesirable method of raising funds
bv short-term notes. In the last
month the Erie, the New Haven and
the Southern Railway have sold
notes where with any kind of nor
nal bond market the Erie and South
ern would have brought out new
bonds. The sale Of the Pennsylvania
issue is the first important bit of
permanent railroad financing ar
| ranged in more than year. That
has made it particularly interesting
and it has been spoken of as break
ing the deadlock that has existed in
the railroad bond market for many
months. Whether it will be followed
, by other railroad financing of similar
character is a question, however, as
the Pennsylvania credit is much
above the average and the success at
tending it's financing would not nee
ossarily mean that other roads could
do as well. It must be remembered,
too. that the Offering price of the
new Pennsylvania issue, 9712, is
rather low, and this probably is one
reason why the bonds were so quick
~ taken. At OH the yield was 1852
per cent. In January the AIS sold
as high as 104b, or on a 4.3O per
cent basis, and previous TO the an
nouncement of the new offering they
were quoted at 101. In addition to
the Pennsylvania financing the Bal
timore e. Ohio has sold during the
last week 100000 of Az per cent
equipment trusts, maturing in an
nual instruments over a period of ten
years. These were taken largely by
institutions.
Some surprise has been occasioned
by the sale to the Federal Reserve
banks of $5O,OOO,OOO three-months
United States government 2 per cent
notes. This was done by the Treas
ury Department to provide funds
needed in an emergency. OF this
$25,000,000 went for the purchase of
the Danish West Indies, the remain
ing 100000 for War Department
needs. Bankers criticise the trans
action as unbusinesslike. AS one put
it, the government could in few
short hours borrow free of interest
| S1OO,000,000 from the New York
banks on a strictly patriotic basis.
But on business basis, however, the
rate would have to be 8 per cent or
more. New York City paid an aver
age of 1926 per cent during the week
for S15,0O0,000 when it sold that
amount of corporate stock and reve-
nue. bills.
Money rates have shown no evil
dence Of stiffening with the APP
proach of the special session of Con-
gress. Money on call and money on