The New York herald., 1921-08-29
BROKERS CANNOT
FILL BOND DEMAND
Market Becalmed-Few New
Issues-Last Weeks Of
ferings S10,000,000.

Nothing occurred last week to lift
the investment market out Of the dol
drums and bond dealers who could sell
Some fairly large blocks OF securities,
II they had had them to dispose OF, were
scanning eagerly the financial horizon
fo.. new bond issues. II Is a long time
since the bond market has been in such
!. healthy state, with all the millions or
dollars worth or securities onered
earlier in the year thoroughly digested.
the supply of new paper limited ana
potential Investment funds piling up in
the banks.
The present becalmed state in the
investment market probably will last
for several weeks more, although one
or two important pieces of new financing
arc scheduled for fotation after Labor
Dar It Is safe to say that whatever
be offered under present conditions will
meet with a good reception. Indeed.
doubtless there will be good deal or
competition for new bonds for consid-
cradle time.
Last weeks offerings were limited to
about sl0,000,000. The weeks largest
new issue was the $6.000.000 OF South
Dakota's per cent. soldier bonus bonds.
South Dakota bonds ordinarily are slow
movers, but bankers reported rapid prog
ress in placing the soldier bonus issue.
The only other public Offering OF inn
portanca was s1.401 900 of the Utah
Light and Traction Company's per
cent first mortgage collateral bonds.
At the end OF the week two fairly
large municipal loans were in sight,
st.1s7. 900 of Jersey City bonds and
so.5o0.0o0 Oregon Issue. A big demand
for rnunicipals is expected to develop
now that the United states has signed
the peace treaty with Germany and
the tax exempt feature on the Liberty
bond issues is limited.
The tendency to seek exemption from
taxation by investment in tax exempt
securities has been accompanied BY
tremendous increase in the annual issues
OF State and municipal bonds compared
with their prewar average end there
has been agitation for the adoption OF
q constitutional amendment which will
make 1t unequivocslly clear that the
power OF the Government to tax incomes
from whatever source derived" extends
10 the taxation of interest derived from
state and municipal obligations.
There seems TO be less tendency 10
look for lower money rates than there
was few weeks ago. r. that con-
nection tho Mechanics and Metals Ma
tional Bank says: notwithstanding the
severity OF taa readjustnenf through
which We have passed the demand for
banking credit as 'rell as capital funds
+ still, greater than the supply. Tne
fsll IN commodity prices and the set
hack in business have reduced the saw
ings OF the people this year just as did
The habit OF extravaganza las. year;
hence the accumulation OF new wealth
is limited at a time when there is a
demand that, taking the world a.
whole. is unlimited. Much ne .essary
financing is to be carried forward in
the interest Of domestic business and
the Government.
But II is not only from domestic
sources that the demand arises Were
we so disposed. foreign countries would
absorb our funds as fast as ,ey accu-
rnulate and would pay liberal rate
therefor. The demand for banking
credit and capital funds is worldwide
and if any prediction is warranted Il
would seem 10 be that rates or interest
will not ease materially until We have
saved sufficient OF our production 70
balance the demand With the supply"
on the same subject tie National
Bsnk Of Commerce in New York says:
While recognizing the factors for
lower money rates there are powerful
forces which tend to maintain them. The
violent declines in commodity and Sc
curity prices have automatically tended
20 reduce bank deposits at the same
time that loan requirements Save been
falling. In other words while the de-
cline in the price level does = some
extent release credit supplies it does
rot necessarily work uniformly n this
direction. 4 further influence for
maintenance of the rate level lies IN the
large sums tied up in carrying huge
stocks OF nonsale bio raw materials in
various parts OF the world. Additional
money will also be required from time
70 time as new crops are produced.
Wool, hides and skins, sugar. coffee,
cotton and rubber represent tho more
serious crediG problems OF this class.
Reviewing the entire situation ard
giving due weight 70 the many factors
affecting tho market. business opera-
tions at this timo should be based on
probable continuance ~ rates AZ Levels
not FAR from those now prevailing"