The New York herald., 1921-09-06
BOND OFFERINGS
INCREASE IN WEEK
New Issues of Period Are for
S40,000,000 and Include
Brazil's S25,O0O, 900.


new offerings of bonds were fairly
large amounting 10 about $4oo0oop,
in contrast to only s10.o0o.o00 during
the preceding week. AS now Is the
height or the vacation season, no
activity in the investment market had
been anticipated until after Labor Day
1t was decidedly encouraging TO note
the ease with which the bonds offered
last week were taken by investors. Tho
largest issue. s25.000,000 Offering OF
the United States of Brazil's twenty
year per cent gold bonds. the second
instalment Of an authorized issue of
$50. 600. .Oo0 was several times oversub-
scribed in less than two hours.s The
only industrial issues offered We're
SO, 100000 of the Keystone Steel and
Wire Company's per cent. sinking
fund gold bonds. and S3.350,0o0 OF the
first mortgage per cent sinking fund
gold bonds of the Glidden Company,
also were quickly placed. The balance
of the grand total was made up or
M Inicipal issues. They were S3.b00,ooo
OF the city of Milwaukee's IS and IS,
81, 100000 of the State OF Cregon's 5s.
81 .000, 600 of st. Louis County. Mime
sofa. SIS. and S1.500,000 of Wichita
County, Texas, 6s.
The market for outstanding bonds
displayed firm tone and many leading
issues in virtually every group estab-
lished themselves at higher levels. That
the turning point in bond prices has
been passed is the prevailing opinion
In investment circles and 1t is pointed
out that there are distinct signs of
Improvement in domestic and foreign
finance
In a special circular on investment
conditions Munds. Rogers Il Stackpole
say THAT period of rising bond
prices will follow period of liquidation,
such as we are now passing through, Is
not mere guess or even consensus
of opinion. 1t is a fundamental eco
noinic necessity as inevitable as the
rotation of the seasons. as certain as
that spring will follow winter. As has
been seen. we are running into an
economic cycle in which, despite wide
spread depression, surplus funds are
accommodating. and these funds are being
accumulated under such SOLDERING CIR
cumstances that they will seek invest
ment in only the best type of securities.
Fortunate indeed, is the individual or
institution that to-day has funds to
invest Not since the period following
the civil war have our markets offered
such opportunities. and in all prob
ability it will be another generation
before they are repeated.
United States Government bonds
selling on 5.75 per cent. basis, under
living main line railroad bonds on a 615
to per cent. basis, well secured indus
trial bonds on tito s per cent. basis
and. obligations of first class foreign
Governments on an per cent basis or
better are possibilities for investment
which ten years ago would have seemed
fantastic. And ten years hence they
will seem equally incredible. However.
all this has been said before. and has
been somewhat overdone. The vital
question is: Has the day of such high
interest rates begun to wane? The first
index that comes to mind is the drop in
discount rates from Z to 5ls per cent.
Politics may or may not have something
to do with this. If so. it's influence is OF
necessity slight. The drop is funda-
mentally the natural result of inrryas-
ing available credit. Here. then, Is the
foundation of demand in the process Of
building.
Secondly we may look at supply.
Railroads which last year were in such
urgent need of funds that they were
compelled to bring out their notes on
per cent basis or better are now in
position where they can afford to wait.
Meanwhile their z per cent. issues are
selling at a premium. We do not expect
10 see roads like the New York Central.
Pennsylvania. Louisville and Nashville
and Atlantic Coast Line issuing any
more per cent. obligations. Industrials
are in similar position. Their require
rnents are less desperate now than they
were a year ago, and there is little busi-
ness to finance AS to foreign Govern
ments, they were forced to assume an
interest rate of per cent on the obliga-
tions which they marketed over here.
Foreign reports now begin to show de-
cided increase in agricultural produce
tivity and their prospects for balancing
their budgets and developing exports are
improving.
THAT there will be an abundance of
offerings later on there Is no doubt.
Railroads must expand and equip.
Municipalities and States must build
schools and highways. Foreign Govern
mcnts must adjust their exchanges by
selling obligations in this country, but
all this financing promises to work itself
out in an orderly manner. Consumers
stopped buying raw materials. clothes
and automobiles several months ago be-
cause they believed their requirements
could be met more cheaply by waiting.
Their action was more than justified.
Borrowers are now in the same posi-