The Birmingham age-herald., 1920-06-14
Daily Wall Street Gossip
BY HOLLAND.

factors which are now of influence in
 the investment market speak of pe-
 culiar, even unexpected, situation
 which has been developed notwith-
 standing the fact that the presidential
 conventions, as well as the preliminary
 appeals, have been for some time in
 progress. For at the beginning of the
 present fiscal year. July l, 1919, ana
 for nine months thereafter financing
 for the purpose of securing fresh
 capital for the railroads amounted to
 nothing. It was the longest time, at
 least within recent years, when rail-
 road financing was completely neg
 ligible.
 Why then should there have come change while convention primaries
 were in progress throughout the coun- try a change which has been empha. sized by important financing which
 took place just before and while the Chicago convention was in session.
 Bankers who have given heed to the inS>~ tment market say that never be- fore have there been nine months. or
 even six months, in which the rail-
 roads made no appeal for fresh cap ital so that they might be able to inn
 prove their properties and secure ade-
 quate equipment.
 Beginning in Aprh, however, and al
 the very time when primary cam paigns were concentrating the atten-
 ton of the voters, there came of sudden remarkable change. It can not be explained by any other reason than the belief of the investing pub
 lie that whatever the outcome of the
 presidential campaign may be there is
 to be reasonable prosperity finan.
 cially.
 In two months little over two hun dred millions of Securities which were offered by the railroads have been ab- , sorbed by investors. The superficial or apparent reason for this change in sen- timent is asserted to be: First, the con- structive railroad legislation which was
 enacted on the last day of the winter months.
 Second, the railway managers undoubt-
 edly after conference with bankers of
 fered their securities at 2 per cent
 rate. That proved to be tempting
 enough. but unless the public had con fidence in the maintenance and increase
 in business prosperity, and in the ulti-
 mate ironing out of the difficulties and
 Instructions the railroads have met with
 even per cent would not have been suf-
 ficient. Almost half century has passed
 since. one of the great railroad com
 panies offered securities at a [ per cent
 rate.
 THE DEMAND FOR CAPITAL
 This high rate does not, in the opinion
 of those who are well informed, reflect any depreciation of railroad credit. The
 railroads have been compelled to place their offerings before the market on the same basis as that by which some of the
 most important industrial corporations have marketed their securities. There is only one inference to be taken from the absorption by the public of these securi-
 ot hat is that the call for investing capital is very per sistent and is not confined to the United States.
 THE BELGIUM BONDS Another financial item of which publi- cation was made on the second day of the Chicago convention also reflects the willingness of the American public to make investments in high grade securi- ties. For announcement was made by lJ. r. Morgan & Co. and the Guaranty Trust Company on the morning of the second day of the Chicago convention that the offering of 5O0o0,000 in the bonds of Belgium at rate of 71a per cent had been so heavily oversubscrbed that it was inevitable that there be an allotment or scaling down, The Belgian lion which was under negotiation during the spring and when presidential poll. ties seemed to command attention, was managed with the utmost skill. Amer- can banks were appealed to and sys- | tematic campaign was carried on for the purpose of securing their support. There fore, when if was announced that the Morgan house and the Guaranty Trust Company would offer for sale $50, ,000 00g l in Belgian bonds these two trustees or syndicate leaders already knew that the announcement was a mere formalty, for the fifty millions and more had been substantially pledged. It is not a new loan to Belgium, because the funds re- ceived from the sale of these bonds will be used in taking up credit acceptances issued in favor of Belgium some time ago.
 Other important financing has been under negotiation and in some cases consummated while these president poli- ties seemed to be the chief topic of in- terest throughout the country It is spoken of as a most favorable coinci- dence that these large financial opera tions should have been negotiated and some of them consummated on the eve of the meeting of the national presiden- tial conventions. for it is impossible to Gc hn irfa hot