The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1922-09-24
UNEASY FACTORS
NOTICED IN BOND
MARKET OF WEEK
European Crisis and Talk of
Government Disconcerting.
Outlook For Fall and
Winter Good
BY BYRON SELLER
Special CorresDondent of The Axe-HeraId
lConXriKht 1922. hv The ARn-Hernldl

Copyright. 1922. by The Ago-Heraldi
New York, September 23.-The in
vestment markets were subjected to
conflicting influences the past week.
The crisis In Europe made for hesi-
tation. 1t is all very we'll to say that
even war In the Near East, IL 1t went
as far as that, would have no great
depressinf effect on sound American
securities. When in doubt the inves-
tor waits. Then, too, there has been
great deal of talk about new gov
eminent financing, which was not
helpful to prices.
The bonus menace, however, was
disposed of, at least for the term of
the Harding administration. Also
there was heavy institutional buying
of high grade bonds still to be had
on s per cent basis or Whereabouts.
All these influences, however, are
aside from the main consideration.
Obviously, the future depends on the
business situation and on the course
of the money market. principally the
latter.
AS far as business is concerned,
there has been no great change. The
outlook for the fall and winter is
still good. The strikes are settled.
Unemployment is steadily decreasing.
The tariff bill has become law.
Whatever may be the thought of the
economic wisdom OF Congress, there
is no longer uncertainty as to rates.
And nothing is more chilling to en-
terprise than uncertainty.
Perhaps the most encouraging de-
velopment of all Is tho surprisingly
large business done by the automo-
bile manufacturers. 1t looks now as
though production Figures for 1922
would be greater than In 1920, which
was the record year.
Money Market Firm
The trend of the money market is
not so plain. Quotations for so and
80 day paper were again firmer, and
for longer periods late in the week
tx per cent was bid, per cent was
asked. This, of course, may be only
temporary, but at least the tendency
for the present is toward higher
rates.
More important is the progress of
expansion in commercial loans. Here
the significant figures to be watched
are the reports OF the 796 member
banks IN the fedei reserve system.
These reports, issued weekly, show a
steady decrease in aunds out on COM
mercial paper for the first half of
1922, the low point being reached for
the week ending July 5 last. Since
that time there has been slight but
fairly constant increase. At the pres
ent rate, however, T. will be a long
time before the demand for money for
strictly commercial purposes has APP
preciable effect on the general situa-
ton. ~.
So far as the price of investment
tu
immediate prospect of money condi-
lions making for lower quotations,
but there is also no reason to expect
high-grade bonds to sell on bash
to yield less than the present level.
In other words, bond prices seem sta
bilized for the present.
Meanwhile, 1t is aerd to see how a
taxable bond, even though legal for
savings banks, such as Atchison
general As, should sell to give a
higher return than at present, which
is around 4.35 per cent. The Atchi-
son issue is only an example, the
same applies to all the very high
grade first mortgage legal railroad
bends and is true to less degree of
the highest grads or industrial and
utility bonds.
Take, for instance, United States
steel SINKING fund 6s, perhaps the
strongest of its class. Selling at 104,
the yield is 4.75 p.r cent. The high
for all times for this bond was
around lis, but that was in 1903.
Conditions are very different now.
American Telephone and Telegraph
collateral trust 5s are selling to yield
per cent flat. New York Gas. Elec-
trio Light, Heat and Power first 5s
and the Niagara Falls Power first IS
give about the same return at cur
rent quotations.
Short Terms Popular
There has been soWe increase of
inquiry for desirable short term Sc
curities very recently. This, Of
course, comes from investors who
are either uncertain of the stability
of the present quotations for long
term security or who anticipate an
opportunity to replace their holdings
at lower price later on.
Most short term high grade obli-
cations, however, give very small
return and the result is that callable
bonds selling around or even slightly
above the callable price are again