Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-10-15
Rv 3 SELLER
...,,I ro,rs.ooodsp, Of The Great Falls Tribune

spscIaI Correspondent Of The Great talls tIiou"e'
Copyright. 1922. ~ The Urea; Falls IFihuhe'
New York, Oct. 14-Tbe outstand-
ing event in the bond market of the
week was the announcement by the
secretary of the treasury of the long
expected government ~retundlng issue.
Whatever may have been banking ex-
nectations the combination of a "A
nor cent coupon rate with a long term
maturity was not generally anticlpat-
ed. Certainly the small investor has
ever reason for gratitude to the sec
retary. And it is evidently the hope
of the department that the new issue
will be widely distributed. Investors
of large means will continue to look
| to entirely tax-exempt securities. =.
Coincident with the announcement OF
the new government issue was re-
newed weakness in the high Craze
| railroad investment bonds;
This was generally explained as dI-
rectIv due to the competition evident
| under the circumstances. That is. If
an ohligation of the United States nom
calIable for . years gives a return OF
. ner cent the obligation of a prl-
| vate corporation. no matter how Wen
| secured, ought to give more than sou
per cent.
II must be admitted that the course
| Of quotations bears out this theory.
There always remains. however pos
| sihiIitv that the decline in the price
of the corporate bond is due to the
same cause that induces the secretary
to offer so high n rate on his new 1s-
sue The primary consideration IN
both cases NAV have been the money
market. It must also be borne IN
MINI that the high point in the bond
market was reached a long time be-
fore ANYTHING definite was known
about the governments intentions.
Some Highs Last July
Quotations for such bonds as Atchi-
SON general. Chicago. Burlington y
| Quincy general As. Union Pacific and
| grant As reached their highest IN July
II was about this time also that the
weekly statement of the 100 member
hanks of the federal reserve system
hogan 10 show for the first time IN
over 9 year a decline in investment
| and an increase in commercial loans.
Changes we're very small for a number
NJ weeks. This confirmed the fact
that the tide had turned. The mean
inc of all this as to business Is very
Main Reviving trade demands more
money. Banks which during the pc
riod of depression had allowed their
idle funds in the investment securities,
began to liquidate when the needs OF
their customers for accommodations
began to increase.
Nor has there been any other devel-
opment in the week to moderate the
slowly reviving optimism OF the aver
age merchant.
There is one development in the
bond market in which neither the
money market nor speculation as &c
the business outlook Is the governing
influence. Foreign government issues
are subject to an entirely different
kind Of control. This is true of obi
cations of nations of continental Eu'
rome. Now that the excitement IN tn
Near East has disappeared, for tn
present at least, the old doubt abou
reparations and budgets remains.
Reports this week as to the pohc.
of the administration at Washington
have been confusing. New loans u
European countries are not to be en-
~couraged unless the proceeds are to b.
devoted to constructive ends. 1t ap
pears to be the general opinion tina
foreign governments must set thei
houses in order before they receiv
any further aid from us.
All this is reflected in the marke
of outstanding foreign bonds. No
where else except In highly speculat
i've domestic issues can sc high a yiel
be obtained as, for instance, in Frenc
dollar securities both government an
municipal. This does not include tn
obligations Of Great Britain, whic
country is just beginning in the pay