The Washington herald., 1920-06-27
FOREIGN BOND
ISSUES LEAD
Belgian and Anglo-French
Issues Take Active Part
In Week S Trading.

About the most important de-
yeiopment in the bond market dur
ing the past week was that of a
substantial upward movement in
Belgian government issues, follow
ing the betterment displayed I'm
rates Of exchange on that country.
There are many who have ex-
pressed skepticism over the out
look for the Belgian issues, par
ticularly those which were offereu
to the public for subscription a few
months ago and which since have
been selling at quotations seversi
points below the price at which
they were placed with investors.
Much satisfaction was expressed
over the new trend OF events anu
there were many who entertained
belief that further progress will
be made in the right direction. a
factor which has stimulated some
confidence IN the Belgian security
situation has been the steady tone
maintained in the Belgian govern
ment 71zs which were recently sold
by a syndicate headed by J. p.
Morgan & Company this being in
terpreted as indicating that those
best posted regarding Belgian con-
outlook.
Foreign government issues as a
whole have been somewhat irregu-
lar recently, the Anglo-French 5s
receding from their previous higher
quotations, but this is said to have
been due to the withdrawal of buy
ing orders by ]. p. Morgan & Com
pany for the account of Great
Britain, in the belief that with this
purchasing power temporarily elm
mated, the price of the bonds would
gradually seek lower levels which
in turn would permit the British
government to acquire additional
amounts of the bonds for retire.
ment later on at a more advantage
Gus figure. 1t became known dur
ing the week that the British gov
ernment already has purchased and
retired upwards 5000. 100000 of these
bonds and 1t is not improbable that
between now and the due date.
October Is next, that country will
have obtained in the open market
fully one-half of the outstanding
issue, leaving but s250.000,00O to
be cared for on the due date. II
has been intimated in financial cir
cles that in order to permit France
to meet its half of the Anglo
French obligation Great Britain
may advance a substantial credit
to that country and assume the OBJ
legation on the date of maturity.
shipping gold to the United States
in the meantime in sufficient VOL
ume to completely liquidate the en-
tire amount of the issue.
1t has been stated recently, al
that the gold flow from Europe
and Canada to the United States
will begin shortly, and that a sub
stantial amount will arrive be-
tween now and October. This will
be an important factor from many
viewpoints, but particularly with
respect to exchange and the credit
position of the American banking
community. 1t is hoped that the
Federal Reserve system will make
proper use of this gold in the event
of its being received, some bank
ers arguing that it should be
utilized in Strengthening the per-
centage reserve position of the
bank rather than as a basis for the
creation of additional credits.
Only moderate offerings of fresh
securities were made during the
week. bankers stating that owing
to the heavy outpouring of new is
sues in recent weeks sufficient time
for proper distribution should he
permitted to elapse before crowd
ing the market with additional Sc
curities. 1t is known that there
are a number of important 1nan-
cial transactions of this nature
which are hanging fire simply
awaiting an opportune moment for
their presentation 10 the public.
For instance, Great Northern. 1lli-
nois Central and other railroads are
said to be inquiring as to the pos
sibility of securing accommodations
seeking the advice of bankers as to
the best time to enter upon such
an undertaking. Such financing as
has been accomplished thus far by
railroad corporations as well as in
dustrial organizations has neCessi-
tated a high interest rate which
has proven costly to the companies.
but it has been the only alternative
in the face of the present money
market situation, IT being recoG-
niZed that when call money COM
mands rates of from to IL per
cent and time money from Sis to
9i= per cent on straight loans. cor
porate financing must conform to
the condition of the times.