The New York herald., 1921-07-05
BOND MARKET Is
SLIGHTLY BETTER
Sentiment Improves and Vol
ume of Business Increases
at Week End.

Another dull period in the bond mar
ket. with new issues kept down TO a
minimum. was most Of last week. but
at the end OF the period a distinct
change in sentiment occurred and its
last business day saw greater volume
of business than had been seen in sew
eral preceding days and steadily ad-
vancing prices Similar conditions pre-
vailed in the preceding week and may
continue for several weeks more. or at
least until the end of the hottest
weather of this summer. II was antic-
ipated that the French loan would be
the last large issue, except municipal
flotations. until fall. and as no finan-
cling OF Importance is in sight that pre-
dictlon probably will be correct.
There is little doubt that the Invest
ment market was sold 10 a point OF
saturaton. and houses of original issue
and bond dealers generally welcome the
lull in new offerings which will enable
investors to accumulate a new store OF
wealth for investment In time for the
new boom which is expected in few
weeks. Declining prices in the bond
market also have operated against the
successful flotation OF new loans dur
Ing the last few weeks.
The hundreds of small dealers who
in bonds which they can sell at profit
have been very active of late and their
buying Is largely responsible for the rise
in prices of old line bonds. They say
that the public does not appreciate yet
the change for the better in the general
outlook, especially in the railroad sit
uation An era OF cheap money is con-
fidently predicted and purchasers OF
bonds assert that present high yields
will not be obtanable much longer.
Although it is conceded that neces-
sarily several months must pass before
railroad earnings can approach normal.
it is believed that the roads position Is
so much improved that certain carriers
securities offer remarkable investment
opportunities. In its June survey OF
economic conditions the National City
Bank says: Comparative prices of ten
high grade railroad bonds since 1850
show an interesting trend. The average
price of these bonds in 1850 was So. or a
yield of 5.54 pap cent. There was an ad-
vance upward until 1902. when the av-
erage price was 11s. yield of $40 per
cent. Prices have, since continued down
ward, with temporary advances in 1905.
1908 and 1916. and the average price on
June 49, 1921, was rs. to yield about 5.sS
per cent. The yield on standard rail-
road bonds Is one of the barometers OF
the earning power of money, and pres
ent prices are attracting conservative
buyers"
With the exception of $S. 100000 of the
Illinois Central Railroad Company's fif-
teen year 61as, all last weeks offerings
were municipal bonds. amounting TO
about $SO0000o. 1t can be said that the
bulk of the bond business in June was
in municipals. which enjoyed a broad
market In addition TO the s31. 500. 900 Of
the State of New Yorks per cent. gold
bonds. offered last month. there were
half dozen large municipal issues.
amounting in all to about $40. 900 600
Municipal bonds continue to be favored
by large body of investors. and as
most latest issues have been on a very
attractive basis those bonds have been
well distributed