The New York herald., 1922-10-02
PLAN FOR U. S. ISSUE
MIKES BOND MARKET
Numerous Guesses Being Made
Of Total and Terms of Gov
ernment Offering.

The confused state of the money mar
ket continued ito exert a restraining
influence ON the bond market last
week. Another factor that helped TO
unsettle calculations somewhat was
the rumor that the United States Gov
ernment would issue large block of
new bonds in the near future. That
the Government will be compelled to
undertake refunding operations on
large scale to redeem the Victory
notes called for next December has
been generally known for some time,
but the new financing was not ex-
pected until nearer the end of the
year. According to reports in circu-
laton last week the new Government
financing may be announced any day.
The selling of Liberty bonds, several
of which dropped below par for the
first time since early in July, and the
unsettled state of the market for other
! bonds indicated. that the conflicting
rumors regarding the terms of the new
Government loan had confused dis
| couraged investors to the extent that
considerable liquidation of bonds was
in progress throughout the week. Sales
of bonds in the New York Stock Ex-
change We're much heavier and these
were absorbed only at considerable
concessions in prices.
AS matter of fact conservative
observers of investment conditions do
not see anything bearish in a new Gov
ernment loan. 1t was recalled tnat
certain erratic elements in the bond
market worked themselves into a SINH
Liar gloomy state OF mind when the
first large Offering of Land Bank bonds
was made yet the issue went over the
top in short order.
Attractive New u. s. Bonds.
1t is generally believed that the new
Government bonds will be attractive no
I matter what terms are decided upon.
One report was. that the new bonds would
be taxable and mature in thirty years
carrying a 4 a. per cent. coupon: An
other guess was that the bonds would
be 4s and be n-taNabie up to certain
amount. ..+- ~.
Either layout would be attractivesin
the opinion of bond dealers. who express
confidence in their. ability to place such
bonds in large amounts. The amount
of the new Goverrp.uent issue was vari-
ously placed at from $1,000. 100000 to
50, 900 000. 900.
I The trend of the money market last
week was irregular but mainly toward
higher levels 1t was generally admitted
/
been rendered sensitive because of the
inroads made to supply demands of ex
pandirg business and industry. Offer
! ings of money both in the call and time
/ markets +iere restricted, which could be
accounted for by the nearness of Octo-
! Der l. when interest and dividend re-
! quirements are large. Call money in the
! Stock Exchange touched 5 per cent. sew
eral times and time money rates. were
Arm.
I New offerircs OF bonds were large, but
! the total was swelled by a. SIS, 900. 900
issue of Az per cent. Land Bank bonds.
The only other large sized issues were
! $S,09o, 900 city OF Chicago 4 per cent.
bonds and $1,000, 900 Pennsylvania Power
and Light Company first refunding mort
/ gage series B bonds. The lowest yield
basis last week was 3.75 per cent. in
the municipal list and the highest was
! 7.25 per cent. in the industrial depart
ment.
/ Restrictions on Some Bonds.
4 Operations in the investment field are
| likely to be restricted this week because
/ of the absence of a large number of rep
! sentatives of important bond houses.
who departed on Friday for Californ a
! to take part in the annual convention Of
/ the Investment Bankers Association.
| An unusually large number of leading
| bond men went TO the convention this
| Year and the long distance they will
have to travel probably means an abb
l sence of about three weeks.
| In connection with the expected Gov
/ ernnient iinancing the Bond Buyer says:
! ~ Government refundins operation
| need not necessarily disturb the current
position of outstanding Liberty bonds
| or other securities. Presumably no new
! money will be taken out of investment
! channels by the Treasury Department.
which Is bending every effort TO reduce
rather than increase the amount of out
! sta~ding bonds. Fortunately, the finan-
oial world has unbounded confidence
| in the ability of the Secretary of the
| Treasury TO handle the job. .-t
Briefly. the belief of the Street with
! respect to this anticipated Government
! financing is that Mr.. Mellon will within
The next few months float a long term
/ loan greater In size than anything at
tempted since the issuance of the Vic
| tory loan. An early announcement OF
a loan nj iron, "a half billion to
billion with a. rate of AZ per cent. would
I not ho "a oreaf ailrprise to the Street