The Sun and the New York herald., 1920-09-07
CANADIAN STOCKS
SHOW WEAKNESS
Reduction in Price of Victory
Bonds One Factor in Trad
ing on Exchange.

Special 10 THE Sun AND New YonK HERALD
TORONTO Sept, GA weaker turn
seized the Canadian Stock Exchange
during the last few days until the last
trading day or tho week. when there
were some signs Of a rally, First In the
Influences on the securities was tho de-
cision OF the Minister Of Finance In con-
sultation with brokers from the leading
cities TO reduce the price OF Victory
bonds which are still In the hands OF the
Market Committee for distribution.
This decision, carrying reductions OF
from one to three points, was a COM
plete surprise TO tho financial COM
munlty, and something OF a shock 10
thousands Of investors who saw the mar
''et value Of their bonds seriously i'm.
aired without warning, The Govern
nent has been remarkably reticent In ts
omment, and little has come from tht
bond dealers. doubtless on the theory
that least said Is Soonest mcnded.' i
However, It was generally recognized
hat the altered world conditions in the
way Of money rates had called for
some action
There had been no adjustment In the
1rice Of Canadian Victory bonds since
asst May. but during that time there
as been n steady rise in money rates
ntil shrewd investors were tempted to
sell their Victory bonds and buy even n
provincial or municipal issue with a
considerably higher return. Some of the
after securities could be had with II
Yield OF about per cent, while good
industrial preferreds on the market
brought a return Of from ~ to SA per
cent Most important OF all in the con.
lltions leading mp to the adjustment
was the heavy liquidation OF Govern
ment bonds by business enterprises who
could not secure enough working cap
!tal from the banks under present tight
credit conditions.
II was explained by the Minister OF
Finance that since the Market Commit,
tee resumed its operations late last
year bonds to the value OF no less
than Sl35,0O0,O had been distributed
through its operations. The dimensions
Of this work came as a surprise and
goes some distance In reconclllng the
financial community to continued con-
troll.
Already there are signs OF q better
HOslNiOn VI Ndiidui III lOTtlBu tNCndlkt'
After remaining steady at around IL
per cent. for some months. the premium
on New York funds dropped last week
to below 10 per cent and recovered
slightly 1t Is clear that the sale of
Canadian wheat Is having an effect,
though the heavy adverse balance of
trade will operate TO keep Canadian
money at a discount for some time to
come, according to the best financial
opinion here.
What effect any considerable change
in this premium may have on the sale
OF Canadian securities remains to be
seen, as the custom has been strong for
some months OF selling Canadian Provin-
cial bond issues In the United States un-
der the favorable conditions created by
exchange. Manitoba has just completed
extensive financing by the sale OF sew
blocks totalling $4.500.000, which
are being offered to American investors.
1t is stated that the province has now
its necessary financing for
this year
The following Ia a summary OF the
trading on the Toronto Stock Exchange
during the week: