The Washington times., 1922-04-27
BOND PRICES
CONTINUE ON
!. UPWARD TREND
New Issues Prove Popular
and Are Quickly
Absorbed.
BY MUNROE ROBERTS.

NE I" tofNhg Aprh lc
usual effect OF a reaction in the
stock market and the withdrawal OF
public interest from that market
is the transfer of this interest and
activity to the bond market. 1t
has also been characteristic of the
investments market that the sue
cessful flotation OF large blocks OF
new securities at current rates
has had the effect Of enhancing
rather than depressing the price OF
outstanding issues. In the bond
market as in other channels OF. ac-
tivity II pays to advertise, and the
enormous press publicity which Is
accorded large and popular security
issue is a very valuable advertising
asset.
When the new Az per cent bonds
Of the city of New York were first
announced, the ANS OF 1911 were
selling at 1854, a basis of nearly
4.40 per cent. This being distinctly
out OF line with the offering rate
on the new issue. the price moved
up two points to 1914. n basis of
about AZ per cent. When Il was
found thatsthe new bonds could be
sold at premium of over 2% per
cent, a basis OF 4.12 per cent, the
old as moved forward still fur
ther to 1854. Similarly, the rapid
absorption of the new 500, 200, 900
Canadian 5 per cents has been re-
garded in investment circles as be-
ing largely responsible for the mar
het advance OF the listed issues Of
1926, 1929 and 1881.
Where the security is unques-
toned, as in a high-grade state or
n.In
determined most largely by the pre-
vailing rate for money. The proper
manner in which to estimate pres
ent values OF Liberty bonds is,
therefore, not per dollar per hun
dred, per on the InConIv y.e.u,
which is still better than Az per
cent compared with commercial
money rates this Is very high, and
there is ample justification for the
oft-repeated opinion of bond experts
that the war bonds will command n
higher than par price in a compare
lively short time.
Should the Liberty issues advance
to a per cent basis, which seems
to be a reasonable assumption, this
would mean the establishment of
the following price levels:
101.S7 for the first AXIS; 101.02
for the second Az s. l0l.l9 for the
third AVS, and 102.12 for the
fourth AIS. Assuming that the
per cent basis is reached, there
is still the possibility of a profit to
be OF 81 to 81 per 800 bond with
out incurring any risk.
Despite the depression OF the
past year and the consequent re-
adjustment of financial affairs Of
many leading companies, financing
by American Industrial corporations
has been unusually heavy and uni
formly successful. For the cur
rent year TO date, new issues OF
bonds and notes aggregate $685.
OCT 400 in addition to about S2OO,-
900 900 in foreign issues. Interest
rates have varied from 8 to 8 per
cent.
New financing this year has not
been confined to any particular
class of industry. but covered a
broad field of manufacturing con-
Germs. OIL companies have led in
volume Of loans, with approximate
ly SIS, 200, 900. Largest and most
important item was Sinclair Oil
Company's offering of $4,000, 900
first rs, 1887. proceeds OF which
are to pay s46,429, 400, IN per cent
five-year notes called for payment
November, 1922. This industrial
financing has been conducted in
face of an unusual volume and
variety of foreign government bor-
rowing, yet the market has prompt
ly absorbed new issues Of all kinds,
and rates for call and long.term
loans have receded to the lowest
level since the war.
The largest issue was that of the
s45 900 900 Sinclair Oil bonds, with
the $50 900 900 Sinclair Crude Oil Pur-
chasing Company, It's subsidiary, next
in volume. The Willys-Overland
SIC, 500 900 notes rank third, and the
Consolidated Coal refunding 5s in
the sum OF $1,000, 900 fourth.
New issues today aggregate near.
ly s22, ,000, 900, and include:
$4,000, 900 twenty-five-year per
cent of the Penn Public Service Cor.
poration, to yield sos per cent.
ss,300,000 serial 5Ia per cent equip
ment trust notes of the Southern
Railway Company, to yield $50 to
$50.
$4,000 900 twenty-yesr per cent
general and refunding mortgage
pOiiuS VI INC INobtTs-DTOWn lTOI. COtn-
pany to net TN per cent.
S1,500,000 fifteen-yesr per cent
sinking fund bonds OF the J. II.
Symington Company, to yield 7.05 per
cent.
s1,049,1o0 serial per cent equir-
ment trust notes Of the Chicago and
Alton railroad, to yield $40 per cent.
The New York, Lake Erie and
Western Coal Railroad made an of.
fer to holders of it's first mortgage
8 per cent gold bonds, due on May
/, to extend them to mature on May
1, 1912, with interest at 5h per cent,
payable semi-annually on every No.
vember 1 and May i OF their life.
The bonds are outstanding to the
extent of S1,1o0,000 face amount.
Under the terms of the supplemental
indenture the Erie Railroad will
guarantee the payment of the prin.
ciple and interest OF the series A
bonds. The present mortgage sc.
curity Of the bonds Is to remain un-
impaired.
Ht nA