The sun., 1919-05-26
BROADER BUYING OF
BONDS Is FEATURE
Rise in Investment Issues and
Continued Absorption Of
Seasoned Securities.
MESSAGE Is A FACTOR
Quiet Confidence in Future of
Trade and Of Finance Is
Evident.
MESSAGE Is A FACTOR
ny WILLIAM JUsrUs BorE,.

Net oniiteo last week to the bond list
! as consequence Of the highly encour-
aging showing made by the Govern
mont In its effort to place Victory Notes
with genuine investors. Over-subscrip-
lions to the Government loan were num-
circus enough to indicate that the ailot-
ments to large investors would be cut
heavily 30 that few, IL any. appiican ts
TOT larger lots than $4,000 would get
what they asked for In such n sit
uation disappointed applicants. indinr
tnat the demand was even broader than
they supposed II would be- are sure TO
purchase other bonds Of the same erade
II was Just that buying that precipitated
the rise Of older Liberty bonds last
week. tho movement being In marked
contrast to weakness shown by those
issues following the Close of the prev
lous Liberty Loan campaiRns
That development is OF unusual sirni-
ncance Just before the disbursement OF
the semi annual dividend and interest
tund and shows that the investing pub
lie 10 manifesting O growing interest
IN the offerings of the bond market. II
means that the shrewdest class OF a.
curity buyers in the world are mani
resting renewed confidence In the out
LOOK and that for tho FIRST time in many
months they are willing to underwrits
american prosperfty's continuance. In
dicatione are that the bond market has
turned In the direction Of higher prices
ana that from now on there Is likely
to be increased public absorption of in
vestment issuea II nothing occurs TO
interrupt this improvement, II 70 likely
10 assume large proportions with an ul-
Innate, Innate broadening Of the Investment In
curry to point where II will become
possible for the great issuing BANKING
houses to resume the fiotation OF i'm
mense corporation loans.
In this way history is likely 10 re-
peat itself In the DEVELOPMENT of A viz
orous bond market through the graual
shiftng OF public interest that had bean
attracted by sustained stock market
strength. 1t was the successful fiotat ion
Of the Pennsylvania Railroad $40. 600 =
600 loan In April. 1908. that led TO the
| revival OF bond trading that year. fol-
lowing the financial disturbance OF sir
! months before. The future course OF
the present bond market will probably
snow that instant success OF the Vic
tory Loan with knowledge that the Gov
eminent would not appeal directly to
.he public again supplied incentive that
the people needed to cause them To re-
sumo normal investment operations
Tho whole nation is adopting the in
ternadonal viewpoint and coming ia
realize Its responsibilities toward that
portion OF the world. which Is looktnR
upon New York In the Same manner
as It looked upon London in tho days
wnen that market was the chief source
| OF financial rolief. Numerous proposals.
for extending American Investments
abroad are being considered and the
probability Is that soon after the peace
compact shall have been signed a care
| FULLY formulated programme will be an
nounced for providing the credits neces-
sary for the development of our trade
with other countries. a subject of press
ing Importance.
an international trade balance OF s3.asl,.
| 100000. an unprecedented showing for
| the nrst ten months Of any fiscal year
Adding $3.50, 5000 net export bal
| ance created during the frst four 1919
months to the aggregate trade balance
piled up during three years ended with
December the result Is a net indebted
ness to US of the rest OF the world on
foreign trade account OF more than
$1,000, 100000. That stupendous total
offers sufficient explanation for the alb
normal movement OF the foreign ex-
changes and shows why Il Is impera-
tive for our bankers to arrange without
| delay liberal credit balances for foreign
| customers OF American producers, manu-
taoturers ana exporters.
Tho situation is 50 unusual as to
| call for exceptional credit operations. as
| any one familiar with development of
foreign trade knows how absurd It would
be to attempt such q movement with
the use of sixty or ninety day credits
II the country Is to make proper use of
| its foreign trade opportunities credit
mechanisms will have to DO resorted to
In the effort to supply facilities that
will enable foreign buyers to adjust
their indebtedness to the United States
without having to purchase New York
exchange at the sensationally high level
quoted abroad. An unusual emergency
calls for the adoption of exceptional
| measures II the most Ii to be made of
the unique foreign trade opportunity be-
fore us. Tho Federal authorities arc not
able to extend much moro assistance to
foreign o0vArpsuents anxious to con-
tinue purchasing soceIies here, as not
much more than $500, 200, 900 re-
mains OF credits authorised by Congress.
Various investment trusts must be or
ganised and an ambitious effort made
to extend tho market in this country
for the foreign Industrial corporations
and municipalities securities. That de-
mand must not be handled in an un-
scientific way for the circumstances arc
unusual, and II is highly important for
the country to win out In its present
race with other nations for lucrative
foreign trade.
President Wilson's announcement that
the roads would be returned at the close
Of the year emphasized necessity of
prompt Congressional action in safe
guarding them. Much preliminary work
has been done and with the best experts
in the country at work on the problem
the chances are that a system Of private
regulation win be evolved with salts
factory results. 1t is apparent that the
roads will be better OF under the new
order than they were in the days when
their executives had to carry on nation
wide publicity to get the Interstate Com
merce Commission to grant a meaRre
s per cent. advance In freight rates.
The situation has changed and unless
lessons of the war be ignored Federal
and State authorities will deal more
literally with carriers.
AS soon as II is possible to do 30
the country must begin railroad con-
struction and Improvement. The physi-
cal position OF some OF the roads Is
lamentable, when consideration is given
to the needs of the busy. thriving sec
lions which the systems tap. Some of
the roads are badly of for rails and
equipment and indications are that their
owners will formulate a practical pro-
gramme for development as soon ms the
industry shall have been relieved of
Government control The public utility
companies are in line for relief and
President Wilson's suggestions will be
helpful in STRENGTHENING the position of