The Washington times., 1922-03-27
FOREIGN BONDS
|NCREAS|NG|N
POPULARITY
French, English, and Swiss
Bonds Show Rapid
Rise.
By MUNHOE ROBERTS.


Copyright. 1921. by Cosmopolitan News
Scrvice.)
NEW YORK, March 27.-A fea-
ture Of the uond market Is the in
creasing popularity Of the higher
grade Of foreign bonds. Some of
them are ot present selling some
what out of line and therefore have
some distance to go. The highest
priced foreign bond on the listed
market is the per cent bond of the
Swiss confejeracy, which is now sell
ing at 12Oh. The most rapid rise
has been enjoyed by the French gov
ernment per cent which have risen
from 991s to 10S1a. and the United
Kingdom 61i per cent at 106. The
recent rise In sterling has favorably
affected the market action of the
latter, as they are exchangeable for
bonds In sterling form at 4.30. BY
this process England Is converting
foreign loan into a domestic one.
Investment bankers report that
they are now engaged in grooming
up some very high class investment
offerings. which probably will find
their way to The market later in the
week.
There Is considerable interest in
the bond market as to the probable
activities Of the Treasury Depart
ment. Though The Government
quite recently put out about
$500, ,000, 900 in Treasury certifi-
Gates, 1t is quite likely that the
operation will be repeated several
times during the next few months.
The reports from the income tax de-
partment are not very inspiring to
Treasury officials. as they indicate
shrinkage of about 5000, 200, 900
from the considerably reduced esti.
mates of the Treasury Department
experts. The Government is not a
credit-creating agency, and, there
fore. has no resources beyond taxa
ton. tariffs. and the loan market.
With more than three billions OF ma
turtles within the next eighteen
months and with heavy operating
expenses. the Treasury Department
is likely to make periodic visits to
the short-term money market
Treasury certificates not only pro-
vide an excellent form Of employ
ment for surplus funds of the bank
Ing institutions, but they are in
good demand among private in.
vestors. many Of whom purchase
them in anticipation of future tax
payments.
In the early part OF 1920, when
money rates were high and a good
many Of Americas prominent rail
road and industrial corporations were
under the necessity either of refund
ing maturing obligations or of max
ing heavy payments for equipments
and betterments. they chose to issue
short term notes instead Of attempt
ing TO float long term bonds in the
market. II is true that the cost Of
this accommodat ton was high, not
only as to the borrowing rates for
the money, but also the services Of
the-banking houses which were called
upon to underwrite the loans. But
the managers of these corporations
had sufficient foresight to figure on
the forthcoming period of easy
money and low borrowing rates
which always precedes a business
boom. That period is now here and
likewise the necessity of paying offer
refunding the short term notes Gre
ated two years ago. Consequently, a
great many of the new bond issues
that are now and will hereafter be
offered in the market will not result
in an increase in the bonded debt of
these corporations, since the proceeds
will be devoted to refunding these
short term notes.