The Washington times., 1922-05-02
BABY BONDS
GROWING IN
POPULARITY
Large Increase in Demand for
Bonds of Small
Denominations.
BY MUNROE ROBERTS.
Copyright 1872. by Cosmopolitan
Naw~ Snrvica


NEW YORK, May 2.-As invest
ment circles have gradually widened,
there has been an increase in the de-
mand for bonds of smaller denomi-
nation-the so-called baby" bonds.
Investors have found 1t much more
satisfactory to pay in full for small
bonds and keep them safely in their
own safe boxes. rather than to en-
gage to pay for the larger denomina.
ton on the partial payments basis.
This has been so well developed that
the purchaser of a baby" bond
receives the advantage OF the most
favorable prices quoted in the regu-
lar market. One very large New York
Stock Exchange house has made o
specially of furnishing a market for
baby bonds" and there are more
than one hundred of these issues now
handled by this firm. I'VE started
this department" said a member of
the firm, ''and found that we could
make a 1-point market. When a
81 900 bond was selling at 80, we
would make a market on the small
pieces OF 99-100. OF course, we could
do this only on active issues. Six
months losses proved to us the only
way to make a fair market for the
baby" bond buyer and make q
profit was to increase the volume OF
the business. Through persistent ad.
vertising IL was not long before the
business did improve, and II Is now
on a paying basis"
In a special compilation published
by the American Acceptance Council
1: is shown that during the past fif-
teen months loans to the amount OF
81 .0o0, ,o00. 900 have been floated IN
the United States. For the calendar
year. 1921, foreign issues taken by
American investors totaled $628, ,460,-
900. while during the first three
months OF 1922 the absorption OF
similar issues by our investors
reached 1906, ,627 900, making a total
for the period from January !, 1921.
to March 81. 1922, SsS4,987. 900.
This figure includes only such Is
sues as have been a matter OF public
record and does not cover private
purchasAs BY individuals or inst!tu-
tions, wssss in the aggregate would
probably raise the total absorption
from the 1927 1872 ,020 recorded TO
around an even billion dollars.
While the volume OF foreign se-
curities taken by this country has
been expanding in the mosr remark.
able manner, the credit balance on
our foreign merchandise transsc-
tions has been falling. Since No
vember, 1921. the value of foreign
securities placed in our markets has
exceeded by very substantial
amount the total excess OF our MGR
chandise exports over imports.
The net result OF all this is that
against a favorable trade balance
tthe so-called visible trade'D OF
81 ,296. 900, 900.
In 1921 we loaned privately to for.
eign countries s62s, 900, 900 through
the purchase OF their securities Of
one kind or another. In other
words. just about half of the credits
accruing To this country last year in
the regular course OF trade We're re-
loaned against securities to our for
eign friends. And during the first
three months Of the present year,
when our trade balance was only
$50, 900, 900, we loaned 1906. .62T 900,
thus tipping the balance against us
for that period by over 1921, 900. 900.
The continuous rise in bond prices
is best emphasized by the statistical
averages, which, at the opening OF
business today, were as follows: