The Washington herald., 1920-04-26
BOND VALUES
AT Low LEVELS
Many High Grade Invest
ment Issues Displaying
Sharp Depreciation.
LIBERTIES DECLINE
Reach New Bottom on
: Continued Heavy
Selling.
LIBERTIES DECLINE

Bond market operations during
the past week were Of a character
to create unsettlement in the trade.
particularly as the losses sustained
throughout the list followed simI-
lar declines In the previous week.
The reaction a week ago was said
to have been due to a readjustment
Of prices TO meet conditions brought
about by offerings Of securities at
more attractive rates than seasoned
issues which have been outstand-
Ing for some time. whereas the
losses suffered this week were in
great measure due to hysteria. In
other words. the attack on the stock
market by the bearish element Gre
ated unrest in the bond market with
the result that considerable selling
took place that otherwise doubtless
would not have been experienced.
II is recognized by those who fol-
low the bond market situation close
ly that at current quotations many
ally attractive investment possibil-
tiles. and bond men were urging
their clients to take advantage OF
the situation and purchase before a
! turn upward takes place. In the
! past when bond market conditions
have been Unfavorable on the sur
/ face a turn for the better has de-
veloped quickly and those attempt
ing TO secure issues have been com
/ PEELED 10 pay from ! to 4 points
above the lower levels in order to
/ take on the amount OF securities
desired. Those who are in closest
touch with the investment situation
always recommend the purchase OF
good. bonds in a declining market
unless there are elements in the sit
uation which does not warrant such
a departure. As there have been
no recent developments which might
be accepted as accounting for the
declines which have taken place.
the large investment houses during
the past couple OF days have taken
occasion to urge the purchase OF Sc =
curities at the attractive levels OBJ
tanning.
Liberty Bonds Drop.
Liberty Loan bonds were offered
freely during the entire week. but
more particularly on "Wednesday
when the stock market experienced
Its severe decline. There have been
developments which might readily
account for the decline in Liberties s
including the announcement by Sec o
iretary Of the Treasury Houston. that
after July l the government will.
purchase no more OF its bonds in
the open market. and also the offer
ling Of short term government
Treasury certificates on a and 5is
per, cent basis. Another factor con-
tributing to the downward move
ment in Liberties il is said. has
been the rather extensive selling Of
these bonds by small investors in -
cIudinE large numbers Of those who
are at present on strike. As their
funds have gradually dwindled
these individuals. il is said. have
taken occasion to convert their LIB
erty holdings into cash even at the
depreciated quotations obtaining.
( The yield on Liberty bonds at the
moment is so attractive. that there
has been the best kind Of buying Of
these issues. Corporations have
been heavy sellers Of Liberty bonds
because Of the difficulty in obtain
ing money with which to carry on
their businesses. The urgent de-
mands for money have acted as a
factor in the Liberty bond market
for a considerable period Of time,
and until commercial activities have
undergone some defiatiOn IL is not
improbable that there may be fur
,ther substantial offerings Of these
bonds in the market with an iTreEu-
lar tone. The degree OF safety in
icident to those issues. however. is
a factor which should not be over
looked by those having surplus
funds available for investment
New Offerings Deferred.
| II was said in the trade near the
close OF the week that some OF the
Important financial undertakings
(which are under contemplation
probably would he delayed until
market conditions have Undergone
la change for the better. 1t should
H. remembered that there have been
large amounts Of new securities put
out during the last month, and this
has naturally brought about an
over supply of investment issues
which will require some little time
Ito absorb before the market will
again be cleared to an extent that
will permit further liberal offerings.
corporate demands are urgent and
lunqUestionably will continue so un-
til there has developed a proper de-
gree of cUrtailment in activities
generally throughout the country.
The American public today is'livinE
extravsgantly, and it is recognized
that the only remedy OF the pres
ent situation will be that of a re- .
versal Of activities in this direc- :
tion, particularly among t9e middle
classes. A couple of ytars ago
when Liberty bonds were being Of
fered for subscription. prominent
bond men expressed the opinion
that the distribution Of these Sc
curities direct to the public would
result in bringing about an era e
saving on the part Of the American
public. Contrary to expectations,
however. il has created quite the :
reversed situation, SO there has :
never been a time when there has
been such extravaganza as during
the past twelve months.
/ Don't sell your liberty bonds.