The New York herald., 1921-02-28
BOND MARKET RESTS,
BUT PRICES HOLD UP
New Flotations OF Abont
500. 100000 Are Expected
Within Next Few Weeks.


A further dwindllng OF interest in
high grade securities occurred last week
and investment bankers, recognizing
that investors had been sold to a stand
still in the last six weeks. wisely re-
Trained from pressing sny large bond
offerings on the market although it is
believed that several issues are on the
fire
The total Of bond offerings last week
was approximately sls.ooe00o. which
compares with sG3.0o0.0O0 in the week
before and sl25. 600 900 in the week ended
February H. The total last week was
comprised of $500 900 ten year per
cent sinking fund notes of the General
Petroleum Corporation. s2.0Oo0p five
year s per cent. convertible gold bonds
or tha Stewart-Warner Speedometer
Corporation and SS.26o,0o0 city or New
ark 0la per cent. bonds.
With the exception OF the Stewart-
Warner bonds, which We're oversub-
scribed six times in less than two days.
indications were that the distribution
OF the new bonds was relatively slow.
The offering OF the Sac Paulo loan,
which was scheduled for last week,
was postponed for briskcr mar
kct II was reported that this loan
would be offered Tuesday or Wednes-
day. II dealers were consulted 1t is pc.
lieved that there would be little
longer delay, as II is pointed out that
IL is unreasonable to expect strength
in the bond market while the public is
busy preparing to make income tax
payments OH March 10. The Chile OF
fering has not vet been entirely sold'
but the distribution oe these bonds Is
going on satisfactorily, according to the
bankers.
hand Dealers Are Optimistic.
The foregoing does not mean that
bond dealers have turned bearish. On
the other hand, they are extremely op-
tinlistic as to the future IL talr
breathing spell is allowed before each
new batch Of offerings. One significant
indication of the underlying strength
OF the bond market is that prices have
declined little in this period OF duiness.
Heretofore IN other years each squirt Oh
new financing OF sizable proportions
has been followed by declines that dam
aged values considerably and aiscour-
aged prospective investors.
II is reported that there Is isrse
present price levels. thus precluding the
possibility of any material decline.
Dealers say that high grade legal rail-
road bonds arc particularly scarce ana
that Il is impossible to buy even as
small a block as $4,000.
BY making slight price concessions
bond dealers were able last week TO
make considerable progress toward
clearing their shelves Of accumuiations,
and II they get little longer time they
should be in q good position to handle
fresh business.
II Is estimated that within the next
two or three weeks new flotations VIII
amount TO more than s100,000.0OO and,
looking still further ahead, this total
should be greatly swelled.
There is no doubt that the market can
absorb this fresh supply OF new issues
when II regains it's strength. The Chi
caeo. Burlington and Quincy situa-
ton is attracting the most attention az
the moment The approval OF the In
terstate Commerce Commission for this
issue is looked for any day, but it Is NOT
expected that any formal Offering ~
bonds would be made right away. Good
year officials report that stockholders
show an inclination to vote In favor or
the new financing plans. so that 1t -
time In March or early In April.
Inventory Financing Likely.
II is intimated in banking circles that
a large amount Of inventory financing
may be expected this year. Bankers
hope to loosen UP much frozen credit
in this way by passing to the investor
the burden OF carrying large inventories.
This can be easily done, 1t Is said, IL the
bond issues arc made attractive enough.
The recent copper financing. which was
regarded by investors with a great deal
Of favor. was a good example OF what
can be accomplished along these lines.
The Newark offering was the first
municipal issue OF any consequence FOR
several weeks. Bids were submitted
for these bonds by six syndicates. There
will be two sizable bond awards by
cities this weeli---s1 900. 900 u per cent.
one to twenty year school district serial
bonds of the city of Akron, Ohio. and
Al 900 600 Oh per cent. school district
fifteen and one-ouarter and twenty and
one-half year bonds OF the city or Day
ton. Ohio. After these two issues there
will be no large State or city issue
for the rest of March.
Some little change in sentiment has
taken place with regard to the outlook
for old line outstanding Donus tnls year.
That the price trend will be definitely
upward Is still undisputed, but predic-
tons OF a radical change in the situa-
ton have been modified. The reason for
the change is that there seems no pos
sibility Of any permanent easing Of
money rates because of the heavy Gov
ernment demands and prospective cor
porate borrowing.
For the same reason many observers
OF the investment situation have revised
their ideas concerning the rate that bor-
rowers will have 10 pay for funds. IL is
now thought probable that the and
per cent. coupon will be attached TO
new corporate issues for the rest of the
year at least. This raises the question
OF how many Industrial concerns will
be able 20 speed UP production 10 the
pitch where they can safely guarantee
such high rate OF interest for money
borrowed. To permit this there must be
a considerable Improvement in trade
conditions.
Drop fn Rail Msruritfes.
Raflroaf1 Ynnt.fritiea in March will