The New York herald., 1921-06-27
BOND MARKET TO
CONTINUE INACTIVE
Dullness Expected to Continue
Until After Coming Holi-
day Period.

The last week has recorded one of the
| smallest aggregate of new offerings for
! any week OF this year and another duh
week is looked for this week owing to
! the approaching holiday Investors have
| taken eagerly the meagre fare allotted.
which included about s20,000,000 OF
State and municipal securities and a
small amount of industrial bonds. As a
whole the market was flat until Friday.
when strength and activity developed in
| rail bonds, TO be followed on Saturday
by substantial advances due to the gem
eral acceptance of the report that the
United States Railroad Administration
was about TO announce action to fund
capital expenditures made in behalf of
the railroads. thus improving the cash
position of the roads. Despite the inn
provement in rail bond prices little in
the way of new railroad financing is
under preliminary negotiation. There
were reports on Saturday that the
American Sugar Refining Company had
arranged to negotiate $50, 100000 of new
securities, but the reports went uncon-
firned. and even If there is new sugar
financing in prospect it is not likely to
reach the light of publication before the
July reinvestment funds become avail
able.
The State OF New Jersey will open to-
morrow bids for the second time on
$12,000.00 of its per cent twenty
year soldiers bonus bonds and S.. 900 900
of its per cent. fifteen to thirty year
optional highway bonds. On Thursday
bids will be opened for the second time
on s30.000,000 of Michigan 5la per cent.
thirty year soldiers bonus bonds. I'm
less there should be a striking change in
the market for State and municipal Sc
curities 1t is not expected thai the Sec
ond results will be much better than
were the first ones, but at any rate in
vestment bankers will watch the situa-
tion carefully. Sealed bid openings
otherwise this week are all less than
$1.000,000 each. Further progress was
reported in the distribution of the New
York State bonds. but it will take con-
siderable time to clean up the aggregate
of S31.s00,0 900.
A timely discussion OF the present in
vestment situation is given by Joseph
Fl. Briggs. manager of the bond depart
ment OF II. NJ Bylesby & Co., VINO
thinks that the present fat period IN
new offerings is about to be followed by
good investment period. with increased
activity. Mr.. Briggs said in part: Dur
ing the last eighteen months the invest
ment bond market has experienced eX-
ceedingly good investment periods. fol-
lowed by periods of depression. There
has been no sustained buying power to
carry the markets along for more than
short periods, with the result that a
largo number of investment offerings
have been crowded in close succession in
these short periods. actively competing
for the public's favor and producing a
rather uncertain and unsettled bond mar
ket. Thus. the exceedingly good market
of a month or six weeks ago has devel-
inf dot ND H.
ably materially enhanced by necessity Of
investors at this middle of June period
meeting their quarterly instalments OF
the income tax.
Each reaction appears to be Of shorter
duration than the last. and the bond
market during this present reaction APP
pears to have we'll maintained its price
level. despite the temporary absence OF
buying power This is surely an indica-
ton that investment markets are work
ing toward better and more substan-
tial basis.
1.-The axiom that bond prices advance
in direct ratio to the fall in commodity
prices Is true to-day, but the decline in
commodity prices was so drastic and so
quickly brought about that for the time
being bond prices in direct proportion
are somewhat out Of alignment 1t is in
evitable that this condition will right II
self and that further gradual declines In
commodity prices which are expected to
come. will be accompanied by gradual
inclines IN bond prices.
zone OF the outstanding features or
the present market, and OF the market
for the last three years. has been the
enormous buying power developed in the
small investor. This feature has been
emphasized many times since the Liberty
loan and Victory bond campaigns. but
its worth to the investment bond busi-
ness and the stability which this large
distribution on small scale has added
to the bond market have never heen
closely analyzed nor fully appreciated"