Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-07-05
GOSSIP OF
THE STREET

There appears to be trend of sem
timent favorable toward railroad securi-
ties. both bonds and notes, this doubt
less having been prompted by reports
relative to payments by the Govern
mcnt to the carriers and a funding
! operation which will care for moneys
now owed to the Government by some
or the large railroad corporations Thus
far there has been no important re-
hection of such changing situation in
prices marketwiSe. but bankers profess
to believe there will be within another
ten day period. Numerous railroad
bonds are now selling at prices close
to the record low quotations in their
history. and the yield on securities of
this class. which few years ago ranged
Mt from 10 412 per cent. and in some
instances . per cent. now averages from
6t2 to ~ per cent, with some bonds
showing an s per cent return. There
fore. 1t would appear that with the
easier money market conditions now
obtaining there must necessarily be an
important reflection Of this phase OF
the situation in bond market prices be-
fore long When the turn takes place.
some entertain the opinion that it will
first be reflected in the raj! group.
In discussing the money market
situation ms a bond market factor. at
tention may be directed to the gradual
lowering of frozen credits held by the
banks. All over the country this class
Of credits is being cut down because Of
the inactivity of business and the desire
of those thus indebted to eliminate
such obligations at the earliest pos
sible moment. This naturally means
that money will be made more plcnti-
full and this in turn indicates that the
u per cent interest rat" that has OBJ
tained at times during the last week
will not long endure. Some prominent
bankers say that in their opinion money
will be drug on the market before
the end of the present summer and that
renewal rate Of i per cent will not
lie uncommon, with q lower rate in tn"
outside market. This will force idle
funds - the securities markets, and
when this condition obtains some be
liCve the present high rates If return by
corporate issues will he materially re-
auccd. A. has been stated heretofore.
money cannot be permitted to remain
id'o, and this has been one Of the i'm
I"rtnnt factors in bringing funds ont
during the past month. II is stated
that out -of-town money has been in
strumental in tho lower call money
rates that recently have obtained
Therefore. Notwithstanding the COM
parative quictude now obtaining in tn"
bond market. many insist TINT there is
a silver lining which will emerge when
the clouds Of pessimism have rolled by.
Few Bond Issues In Prospect
Some of the leading bond market ex-
perts say that aside from substantial
nj ipin nfTn -,
sues will br few and far between dur
ing the remainder of the present year.
I he bond market Is decidedly tired
there is continued indigestion Of Sc
curitleS and 1t naturally will require
Sqmc little time for 1t TO emerge from
the period of convalcsCnCp. 1t is no
secret that there are number of syn
dicate operations which have not been
successful and dealers shelves are
pretty we'll loaded up with undigested
securities. Therefore, until such time
as this. condition has been eliminated
TO an Hppreciable extent, 1t Is unlikely
that the bond market, as a whole. will
reflect any pronounced upward move
ment. Even the municipal offerings
mat have been made in rccCn, weeks
have not met with as pronounced SUI.
cess as might have been desired. and
there rs som" SkCptiCiSm AS to the cat
look for those about u he pat out by
som" of the leading municipalities of
tho country.
In other words, the investor mt the
moment seems to be conserving re-
sources and no doubt is imbued with a
feeling of skepticism because of the
many disquietng elements obtaining in
general business as well as In the se
curities markets. Until such time as
the market assumes decided trend for