The Washington herald., 1920-04-12
MARKET
VERY ACTIVE
Successful Pennsylvania Is
sue Flotation Acts as
Stimulus to Market
OTHER NEW OFFERINGS
Leading Bankers to Take
Advantage Of Favorable
Investment Demands

Taken as a whole, the bond mar
ket during the past week experi-
enced improvement, which was
prompted to some extent naturally
by the lower interest rates obtain
ing for funds and partly by reason
Of improved sentiment generally
throughout the Street. as well as
elsewhere. One of the features of
the market was that Of the improve
mont displayed in foreign govern
ment issues. which applies practi-
cally to the entire list included In
this group. The Japanese bonds
were firm, moving up to new hign
grounds. on the present movement.
and at the close Of the week there
was a better tone in evidence than
has been noted for some time past
Industrial bonds enjoyed . spurt
which improved prices In certain
bonds substantially, and there was
a larger turnover than had been
noted recently in this group. Pub
lie utility bonds also maintained q
firm tone, with prices generally
higher.
Important New Financing.
A development of the week which
is expected will act as a stimulating
influence over the market as q
whole was the offering of $5o,ooo,-
600 of Pennsylvania Railroad Com
pany per cent ten-year bonds at
par, the belief being that the sue
cess of this issue will bring about a
change for the better in the bond
market. 1t was the first large Of
fering of railroad securities under
taken since the carriers were turn
ed back to private ownership, and
its outcome was being watched with
keen interest in bond market cir
cles. Some OF the leading invest
ment dealers of the Street said that
IL needed just such an undertaking
on the part of bankers to restore
broader interest in the market, and
therefore confidence was entertained
over the outlook for the security
list as q whole.
Success Assured.
In the Street the statement was
made that there probably would be
other offerings of railroad securities
in the near future. it being rccog-
nized that much of this character
OF financing will be necessary in or
der to meet the essential require
ments of the roads. which have been
so sadly neglected from the point OF
view OF maintenance and efficiency
during the period of government
control and operation. 1t Is said
that millions will have to be ex-
pended in improvements. better
ments, new equipment. etc, and in
order to accomplish this result new
financing must be resorted to. 1t is
obvious that the success of future
railroad financing will depend some
what on the basis of offerings which
are made, and il the price is made
sufficiently attractive there is no
fear of failure on the part of the
roads to obtain the necessary ad-
ditional capital to meet their urgent
requirements.
So far as making provision for
equipment is concerned. It Is stated
that the stronger roads probably
Will issue their own equipment trust
certificates, which will be offered to
the public, the initial 25 per cent
cash payment being made from the
revolving funds provided in the new
rail.%ld legislation. Some of the
weaker companies which are unable
to sell equipment trusts will prob
ably he cared for entirely from the
revolving fund. II the railroads put
ont equipment trusts at an attrac-
tive rate there Is no reason to ex-
meet other than success for such un-
dertakings, because this class Of Sc
curities always in the past has been
popular with the investing public.
Industrial Issues Taken Up.
Some interest was shown during
the week in the improvement dis
played In some of the Industrial is
sues. For some time past this class
OF bonds has been neglected and
prices have shown unimportant
changes from day to day. The fact,
however, that interest has been re-
vived in industrials is looked upon
as significant and is accepted as re-
h"cting a broadening tendency in
the market as a whole. Chile Cop
per bonds were firm during the
week with a greater degree Of 40
tiv1ty, while the United States Real
ty and Improvement issues also
showed . firm tone with a heavier
turnover than usually takes place IN
this companys securities. The In
ternational Mercantile Marine Sink
ing Funds SIS showed strength and
activity also.
Liberties Active.
There was some diversity Of opfn-
ION as to the outlook for liberty
loan issues, which moved up slight
ly during the week, q part Of the
gain being lost later on. There was
a heavy turnover In this department
and Il was said that there had been
fairly good buying by insurance
companies and savings banks. al
though IL was impossible to ascer-
tain the extent to which this char
acter Of absorption had figured in
the day-to-day transactions. Until
such time as the Liberty groups be-
come thoroughly digested with the
public 1t Is not improbable that an
erratic tone may be displayed In the
various maturities.
Easier money rates during the