The Washington times., 1922-06-19
GUT IN ENGLISH
RATE To Affect
BOND ISSUES
investment Bankers Think
Drop in London Rates Will
Attract Foreign Issues.
BY MUNROE ROBERTS.


Copyright. 1922. by Cosmopolitan News
Service.)
NEW YORK. June 19.-Invest.
mentment bankers are keenly in
terested In the probable effect of
lower official money rates In Lon.
don on the investment markets
Of England as well as Of America.
In the opinion of a number of them
1t foreshadows increasing activity
In the London investment market
and possibly the transfer to that
market of a number of foreign bond
issues which would, In other cir.
cumstances, find their way to New
York.
During the past year 1t Ii esti-
mated that a billion and a half dol
lars Of foreign loans have been
noated here, this being at the rate
of over 500. .0O0. 900 a month. Ameri.
can investors have naturally been
attracted by the high rate of in
come on these foreign bonds and
their participation has been en-
couraged by the endorsement Of
conservative American bankers and.
in some cases. by the semi-official
endorsement of our own govern.
ment. The demand for foreign
bonds has increased, as the yield on
prime domestic issues has declined.
Prior to the war, the process was
Just the opposite. foreigners buying
American Industrial and railroad
bonds. in preference to their own
issues, because higher coupon rates
were TO be found in America than
in Europe. Thus far our expert.
ences with European bonds have
been very satisfactory because OF
the fact that we have accepted only
government or government-guaran
teed issues, only a few foreign in
dustrial bonds having found their
way TO our markets. When the
time comes that more OF these
bonds will be offered here, II will
be necessary for our investors to
exercise a greater degree OF caution
than they have been accustomd TO.
In this matter they will doubtless
receive much assistance from Ameri'
can and foreign bankers.
CORPORATE maturities in July will
be fairly heavy, amounting to aoout
s9o, ,OOO, 900. and divided somewhat as
railroad. ss6, 900 900: Public Util-
ity, $27 ZOO, 900; Industrial. $26.O0o'-
900. Because OF the large amount OF
these maturities and the consequent
heavy receipts Of investors, the re-
investment demand during July Will
be proportionately heavy. This Will
be particularly encouraging to bank
ing syndicates. which 1t In under
stood, have quite q number OF new
issues to Introduce to the market.
Despite the considerable advance
in prices Of the various issues OF
Government war bonds during the
past few months, II Is still possible to
secure a yield Of better than per
cent on most OF the outstanding
isues. Conservative investors. who
showed their preference for Liberty
bonds when they were selling below
80 are thus assured of an income
yield Of around s per cent for a good
many years to come, and have good
reason to congratulate themselves
upon their foresight. Liberty bond
issues which are now selling at par
yield AZ per cent. Compared with
the highest grade railroad and indus
trial bonds this Is an excellent return
for the character Of the security and
IT, will be surprising X such q favor
able return can be secured for any
length Of time. The market for Gov
ernment bonds had the most active
section of the listed bond market
during the past two or three weeks.