The Birmingham age-herald., 1922-10-01
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sfve Insisted that the reaction was temporary and that when the news became more favorable quotations would advance again. Those who put the stress on the course of the money market were not willing to admit that there had not been indications of change more fundamental in it's effect.
 Railroad Bonds Weaker
 Whatever the relation of cause and effect may have the fact is that the weakness shown in market prices for bonds, both high grade and specu- latiye. coincided with the publication of dispatches describing the extent of the crisis in Europe. This may have been, of course, only coincident, or it may have been that uneasinesi about foreign affairs merely accel- erated movement which had al ready gained considerable impetus. In support of the latter theory it can be pointed out that quotations for both high grade and second grade railroad bonds have been declining very slightly, but very steadily, for over a month.
 The market for public utility is- sues has been much stronger, and while industrial bonds are lower on
 
 Is not so great as with the rails. It is, of course, not possible to trace sources of the selling which dee- pressed quotations throughout the week. It was surmised. however, that good deal of liquidation came from banks which have been carrying in- vestment securities purchased at much lower levels. For that there might be two explanations. One that money was needed in increasing quantities for strictly commercial purposes and the other that the sell CTS believed that prices had gone high enough. for the present at least. In either case the result will be the same, for the moment at any rate.
 Business Favorable
 As far as the business outlook was concerned, no change was indicated. Except for possible congestion on the railroads, domestic conditions were all favorable. and it was widely held that even the most serious conditions In Europe could not permanently re- tard business revival in America Vir- tually all lines of industry report im- provement.
 Treasury officials are quoted as forecasting better prices for wheat Certainly anything that will con tribute toward increased buying pow CT on the part of the agricultural population will be helpful to general prosperity.
 Whatever may be thought about, whether or not the very highest grade of investment securities have reached price levels warranted by the future of money rates, it cannot be doubted that there is room for i'm provement in the second grade obli- gations, those which are responsive to the financial condition and busi- ness prospects of the debtor corpora ton. increasing railroad earnings, due to the expected heavy traffic of the last quarter of the year ought to be very helpful in this. direction. The question here. of course, is how far speculators have discounted this im- provement.
 Meanwhile those who still felt un- certain as to the future turned to the short term and callable bonds as a refuge. The high coupon rate obliga- ton. with its large Current return, is very attractive to this class of con servative investors. Their purchasers were distinctly a steadying influence in the bond market this week. While the change of appreciation of prin- cip1e which proved so powerful an incentive in the eager buying of long terms bonds the past 12 >months. is entirely lacking in this kind of se- curity. it Is equally true that there Is little chance of depreciation.