Evening star., 1922-12-03
SUDDEN REVERSAL
IN BOND MARKET
Investors Appear to Believe
Present Is Good Time to
Increase Holdings.
BY BYRON SELLER.
Special Dispato to The Star

Special Dispatch to The Star
NEW YORK, December 2.-The in
Vestment market was dull and irreRu-
lar the first three days of the week.
Inquiry was lacking both from in
sti'utions and private investors.
Large blocks of new offerings were
ieft IN the hands of the investment
bankers. Even high grade munich
pals were without buyers Govern
ment issues were neglected and
lower
Directly after the THANKSGIVING
mol day. however. there was a sudden
reversal. Both hish-erade and spec
ula'ive securities We're in demand a;
ah'ahclhg prices. Sentiment i'm
was so sudden that it appeared doubt
inl II could be permanent.
As to the hieh-rr issues. the
recovery is not surprising. Prices
had declined until they had reached
ab"u, the level prcvaiIin., i.st
.hafch. Meanwhile time money con
tihutd IN supply around tho A., Ia :,
i"f cent Tai". Pressure. from sales
hS banks to provide money for bust
hess purposes had c.ageG. There had
been let-up in the food OF new is
sues. 1t was to he expected there
had reached the low for the present
at least. and purchasers who had
becn holding al"nf waiting for this
very development cam. into the mar
ket and found the supply at quota
tons prevailing during the first half
OF the week very limited. Cpnse-
1uehtiN there was a sharp ad :ance
Some Issues I'uxzIins.
The situation with regard TO the
NE. "a
The hetter feeling here, was probably
a reflection nf that shown in the
STOCK market. The recent pessi,nism
was certainly not due 10 any indi-
cation of change in the ,hus,ness
trend but rather 70 concern over
III" program in Washington. rhis
MAS particularly true of railroad Sc
curities and especially of those The
position Of which has appeared IL b.
dubious of late The weakness IN
Erie stocks and bonds this week is a
cas-" III point. st. l'aul'S inability to
snow liked charges covered and the
poor earn .ngs statements of such
roads as the Seahoard and the Chi
caeo Great Western made their Sc
cuTitIes especially sensitive to
threats of adverse legislation. To !.
less decre" the condition of roads.
"h."h suffered 50 hca vily during the
strike. such as Baltimore and Ohio
is similar.
Tier. were no new Developments IL.
"ashinston to account for the greater
Confidence shown hv Investors. 1t is
trn" that the administration appar-
emily plans to forts,a!! tho mos,
radical measure b. compromises %
its own. But the program of TIL,
prosreSsivcS. so called. and of the
agricultural, bloc remains unchanged
They INSIST on reduction in railway
rates which. without corresponding
<
d t'iculty, 70 use a mild term. for
the roads whose bonds are classed as
speculative. The best that can be
sad is that in al probability action
along these lines is a long way ahead
Position of Railroads.
1t may be that III" slowly rising
price Of foreign products VII nuliify
The resentment Of the agricultural
vest. Then again such conSidera-
tons as the estimated loss of Califor-
MIA grape growers on account of the
car shortage may b- potent factors in
bringing about just solution of the
problem.
Il is obvious that to buy or build
cars cupital must be supplied. Such
purchases AS have been made of late
years have been Almost entirely fl
nancad by the sale of equipment trust
certificates. Such certificates are uni
versally acknowledged to be very
high-grade securities inasmuch as
title to The equipment remains in the
name Of the trustee until IT is en-
Iraly paid for. Moreover even when
the road went into the hands of a re-
caiv"r interest on eIu'pment trust
certificates ranked ahead of or on
par.tw with that on first mortgage
bonds
The constant financing of car pur-
chasns in this way however has