The New York herald., 1922-10-23
BANKS LIQUIDATION
DROPS BOND PRICES
Foreigns Affected by British
Upheaval-General Inyes-
tors More Active.

That commercial banks are gradually
| liquidating their security holdings was
more definitely established last week,
when prices of bonds receded slowly
under the weight Of fairly heavy offer
ings This liquidation process has been
in evidence for Several weeks. although
it has proceeded SO gradually and In
such orderly manner that it has escaped
the notice of all except the keenest
Observers
1t is not expected that this selling
movement by the banks will so far. be-
cause the financial institutions OF the
country are generally equipped with
fairly large cash resources. In the fall
months. however, il is the custom of the
banks to liqridate part OF their hold
ings to care for the heavier loan and
discount demands created by increas-
ing business.
Trading in Aonds on the New York
Stock Exchange was more active. par
ticularly i'm the Liberty bond groups. IN
Government bonds the feature was the
violent fluctuations in Liberty 3las
which at one time reached new high
record of 103.02. The last previous high
mark was 101,6S Much of the gain was
lost before the end of the week. and that
issue closed on Saturday at 1O0.92, up
&c cents on the week.
The political upheaval in England.
when so many important international
questions are hanging in the balance,
affected foreign bonds and weakness
was shown in that group throughout the
week Despite the distraction of the
Columbus Day holiday and the interest
concentrated in the large Government
loan. fresh issues of miscellaneous
bonds continued on n large scale.
New issues totaled slightly over $780,
on0 0OO n large part of which consisted
of foreign and public utility bonds. The
most important foreign issue was SlS,-
O00. 900 Kingdom Of Norway SINKING
fund external gold bonds. oifered on
6 per cent. basis. Another was so'VoV'-
600 Island of Montreal metropolitan
Commission sinking fund gold bonds.
Two sizable public utility issues con-
sisted of $4,000. 900 Consumers Power
comnany first lien and unifying mort
page gold IS and $4,000. 900 Southern
california Edison general and refunding
mortgage 5s The largest domestic IN
dustrial bond issue was s15,00O.o0o
Hershey Chocolate first mortgage sink
ing fund gold 6s and the City OF Phiia-
delphia sS.794,000 4 per cent. improve
ment bonds constituted the largest fnu-
nicipal issue.
To offset the liquidation from banks
at this time there has been consider
able increase in the general investment
demand. investors apparently having de-
cided that larger interest returns than
now offered will not be obtainable Tor
some time. In other words. 1t does not
appear to be generally expected that
high money rates will be maintained
long. Indeed in the best informed cir
cles the opinion Is held That there VIII
be no sharp rise in money rates.
The unsettled conditions abroad make
make il doubtful whether there viii be
any really good market for European
securities. at least until the clouds have
blown over somewhat. There are, how
ever. good prosnscts OF heavy South
American finar~ing here in the next few
months. Indications are that financing
by domestic industrial corporations and
railroads will continue heavy for some
time.
This is especially true Of the railroads
and It is generally conceded that 1923
will be year OF railroad mergers and
reorganizations which will mean con-
siderable resort to the money market.
Railroad refunding operations will prob
ably figure largely In the bond market
OF the future and the sale OF equipment
trust certificates is expected 10 continue
on an important scale.