The New York herald., 1922-05-22
ACTIVITY IN BOND
MARKET lessons
New Issues Of Last Week Drop
to 800, ,O0O-Foreign
Loans Impending.

Activity in the capital market fell
off appreciably in the last week, the
aggregate emission OF new bonds being
about s9o,00ooo0. The letup in financing
was altogether desirable from the
standpoint OF outstanding bonds, which
have been feeling the effects of COM
petition for new funds. and prices on
the New York Stock Exchange re-
tracted some of their ground lost earlier
in the month. Further easing Of money
high grade investment issues to ap-
pear In more attractive light. de-
spite their advanced levels. With time
funds for short maturities available at
4 per cent. while many well secured
railroad and industrial are selling on
to 61s per cent. income basis. 1t
Is reasonable TO assume that bond
prices viii continue to work higher.
especially If the output of new Sc
curities diminish.
Well known companies are able to
float bonds at prices to net bA TO
"a per cent, a basis which has pre-
vailed with little fluctuation for the
last two months and the cheapest
figure at which II has been possible
to arrange new financing In recent
years. Because seasoned bonds are pre-
ferred by many investors to new issues.
borrowing corporations are compelled
to pay higher rates than current In
the open market for equally well Sc
cured investments to attract FUNDS.
The lull in new offerings Is affording
underwriters an opportunity to clear up
odds and ends of recent large flotations
and insures a stable market. free from
congestion. Such new bonds as were
offered to investors last week were
quickly oversubscribed.
Considerable foreign financing Is I'M
pending and, perhaps the most I'M
portant furction of bankers will be 10
clamp the brakes on the large number
of applicants for credit. Public utility
and railroad companies promise TO De
increasingly important factors In the
market for new capital to finance oe-
layed improvements and extensions
now that earnings and credit are being
restored. The peak of industrial bor-
rowings however, probably has been
passed. In the municipal field. the tax
exemption feature appears to insure
continued activity, although dealers re-
port reduced demand. The forthcoming
redemption on June Is Of the tax free
Victory az per cent. notes Is considered
an important market factor. as 1t is
estimated that approximately $27o,ooo'-
600 of them have not been turned In.
Municipal dealers naturally are looking
forward to the shifting of that wealth.
into State and city tax free obligations
Public Utility bonds constituted the
largest group OF last weeks new issues
their total being approximately S37'0oo'-
600. while industrial company financing
amounted to about $32.000,o00. The
largest single piece Of financing was the
sale of s22,5O0, 900 of the Virginia Caro-
lima Chemical Company's 7h per cent.
first mortgage bonds, brought out a,
eS%, or on 7.12 per cent. basis. Iney
will mature in 1947 and are part OF
total issue Of $4,000, 900. The Common
wealth Power Corporation sold $12,5Oo,-
900 of it's 8 per cent. sinking gold bonds
at 90 to yield 6.S5 per cent. The TIL
State Telephone and Telegraph Com
pany's Offering OF $4.500,000 OF its Y
per cent. bonds. due in 1912. was sold
on a yield basis Of less than the aver
age. or Mt 102h to net $50 per cent
An Offering of s3.593.00o Of the city or
Clevelands Az per cent. bonds on
to 420 per cent. basis was representa-
tive of prices obtaining In this market
The per cent. yield was broken again.
however, when $1s0.000 OF the city OF
Syracuse's 3H per cent. bonds were
sold TO net only $50 per cent