The Washington herald., 1920-04-18
LIBERTY BONDS
ON 6P.C. BASIS
Shrewd Investors Quietly
Accumulating Various
Issues on Large Scale.
OTHER INVESTMENTS
New Offerings Prove At
tractive. Demand for
Foreign. Bonds Drops.
INVESTMENTS

A feature Of the bond market dur
Ing the past week was the heavy
trading In United States govern
ment liberty loan bonds. which de-
ciined to . new low record and
which brought the return on funds
invested in them up TO 5E TO 6 per
cent. The third 4Ks show = Yield
of 5ik per cent and the ass a yield
OF per cent. The Victory SIS
which are fully tax exempt. show q
yield of per cent. The Importance
OF this yield is far reaching and
IL was said by some of the leading
bankers of the Street that the buy
ing OF tho various government is
sues have been OF the very best
at the lowest levels established.
| While IL is not improbable that the
liberty issues may decline TO even
lower quotations, the fact remains
that the security is the best avail
able issue in the market from the
point Of view of safety because the
various maturitles bear the govern
ments guaranty II liberty bonds
are not safe investment, no avail
able security is.
Other Bonds Ease on.
slightly lower quotations through
out the list of railroad and indus
trial bonds during the week which
was prompted in considerable meas
ure by the attractiveness Of recent
offerings Of security, which fndi-
Gated that the changes reflected in
seasoned securities simply repre-
sented a realignment OF interest re-
turn by the older bonds to conform
more nearly with that Of the new.
Therefore the easing in prices was
regarded simply as a natural course
Of events, and was not taken seri-
ously in the trade
Now money obtained by any cor
poration today costs much more
than under ordinary conditions, a
iactor which Is fully recognized by
those desiring TO borrow, IL being
realized that the high cost OF COM
modities. living. has brought about
a condition which necessitates in
Nestors obtaining a more liberal
return on funds employed than in
normal times. Eventually, IL is
felt in financial circles, the situn-
tion in this respect will undergo a
change and prices for securities
will gradually work 10 higher
levels. II will require considerable
time for such development, how
ever. and in the meantime such
borrowing as is accomplished must
necessarily be done in accordance
with the demands OF the times.
Buying Of Forcing Issues Falls on.
Foreign government issues also
were slightly easier and the turn
over in this department was not
q Ia
some previous recent weeks. but
this was viewed as a perfectly
natural event, particularly as such
issues as japanese government
bonds. AngIo-FrenCh bonds and the
United Kingdoms have undergone
considerable advance over the
past couple OF months. Some OF
the leading investment houses OF
Wall Street strongly urge the pur-
chase Of foreign governments di-
reCtinC attention TO the attractive
ness OF these securities which, at
III" current prevailing level OF quo
tations, show a yield on the invest
ment Of from 81. 10 more than
per cent. The Argentine govern
ment 6s. which mature on May Is,
at present prices show a return Of
10 per cent, but 1t must be remem-
bered that they have but a short
period to run and announcement
already has been made that they
will be paid of on the maturing
date.
An announcement near the close
OF the week which created some
comment in financial quarters was
that Of the 100000 600 per cent
cumulative preferred stock by the
Standard Oil Company OF New
Jersey, the issue having been un-
derwritten by J. =. Morgan & Com
pany. Common stockholders Of the
company are given the privilege II
subscribing TO the new stock al
par. II had been rumored some
time past that the Standard OIL
Company contemplated such action.
but il was not definitely known
that il would actually take place
until the official announcement was
made on Thursday. The opinion in
investment circles was that this
preferred stock offering would meet
with overwhelming success and
that the bankers underwriting the
stock would b. called upon to take
only a small part OF the aggregate
amount. 1t will be recalled that
NilNn lne ClduudEu AIll company OF
New Jersey offered a similar
amount OF stock a few months ago
the issue was quickly placed with
investors at a price well above par.
Short Term Notes Irregular.
Short term notes were more sc-
tive during the past week than for
som" time. but there was A dis
ktinctly irregular tone displayed
throughout the entire list. In many
instances prices eased slightly.
bringing the interest return on the
seasoned notes up TO a point more
nearly commensurate with that car
ried by the recently offered issues
The higher interest rates for money
which obtained at times during thu
week also acted as dampeninE in
fluence in the short term note
market, but this did not cut down
the volume of transactions from
day to day 70 any Rppreciable eN-
tent. Short term note dealers OK
pressed confidence over the outlook
and predictions were made by some
careful students OF the situation
that within a comparatively short
time prices will move to higher
levels