San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-01-07
BONDS ALSO =.
UNPERTURbED.
BY PREM|ERS
French and Belgian Issues
Soft but Elsewhere
List Firm.
is SERIOUS PROBLEM
Critic Gives Four Reasons
for Markets Un-
concern.
IS SERIOUS PROBLEM
Nv BYRON SELLER.

1
Now York, Jan. 6.-On the face of
it. the end-of- the-week news from Eu-
rope was disturbing in the extreme.
France had decided to proceed in her
own way to collect her bill from Ger
many. Cooperation with England is
at an end. An attempt is to be made
to accomplish by force what could not
be done by negotiation.
British and American economists are
agreed that this is the policy OF
disaster. 1t would naturally be ex-
pected that market for both investment
and speculative bonds would be most
unfavorably affected. A sharp, even
severe. reaction would not have been
surprising. But nothing of the kind
happened.
French and Belgian bonds showed
some weakness. but not what might
have been anticipated under the cir
cumstances. Elsewhere quotations for
investment securities were amazingly
firm. How is this anomaly to be ex-
planned? Four reasons have been sug-
gested for the apparent indifference
| Of SPECTATORS and investors to the
progress Of events abroad:
First, that the markets do not real
ize the gravity of the situation. 1t
sometimes happens that recognition of
this sort is delayed. Such cases are
rare. however.
Second, that the French will not 20
as far as they say they will. Moth
| ing in support of this theory comes from
| Paris. Foreign correspondents report
active preparation on the part of
Premier Poincare for military occupa-
ton of the Ruhr.
May Make France Back Down.
Third, that some outside influence
will be brought to bear upon the
French to induce them to take a more
moderate course. This outside influence
is expected by those who hold this
theory to originate in Washington.
Fourth, that no matter what happens
in Europe. the prosperity of the United
States will not be materially affected
as only small part of American bust
ness consists of foreign trade.
Which of these explanations is the
correct one. can only be determined by
| future events. The probabilities are
that all four enter into the matter. In
any case, the fact stands out that more
| attention is paid TO the bright prospects
at home than TO the dismal outlook
abroad.
Aside from the foreign situation, the
condition to which attention is always
drawn when any doubts are expressed
about the business outlook is that of
the agricultural population. To remedy
the difficulties of the farmers. many
proposals are under consideration in
Congress. Most of them are designed
to increase credit facilities. 1t is doubt
full whether these efforts will be as
appreciated by the farmers as the poll
ticians expect.
Dirt Farmers" Ask More Credit.
"Dirt farmers" say what they want
is not more credit but high prices for
the products they have TO sell and not
only actually higher prices but higher as
compared with the cost Of goods they
have to buy. That is an objective not
easily reached by legislation.
Along this line the most radical of
the so-called agricultural bloc pro-
pose the creation of a vast federal
buying and selling agency for agricul-
tural produce. There is not much
chance of anything like that being
accomplished at this session of Com
gress in the opinion of those best in
formed and the merits of such a pro-
ject need not concern us yet.
Meanwhile new offerings of securities
are eagerly absorbed. The large blocks
Of stocks and bonds taken this week
are the best possible proof that the
reservoir Of funds available for invest
ment is far from exhausted.
The $7j,000,0O0 Federal Land Bank
offering is case in point. The merit
Of these securities seems TO be better
realized by the investment public. The
land bank bonds, however, still yield
higher return than the obligations
Of first grade municipalities.
If the Capper bill, which provides
for raising the limit on individual
loans made by Federal Land Banks to
$4,000, goes through, there will doubt
less be a large increase in offerings
of these bonds. The present limit on
one loan is $4,000, and the larger
business has been left to the joint
stock land banks, which are private
institutions operated for private profit.
Some opposition TO the joint banks has
appeared in the Senate, but the fed
eral land banks seem now TO be a
permanent part of our agricultural
banking system.
No Decline In Interest Rates.
II is noteworthy that the investment
demand seems TO be inclining more to
preferred stocks than to bonds. This
is only natural at this stage of bust
ness revival. The general opinion is
that no great decline in interest rates
is to be expected. In fact, treasury
officials are quoted as expressing the
opinion that federal reserve rediscount
rates are more likely to go up than
down.
The present quotation is 4 IA per
cent in all districts except Boston, New
York and San Francisco. In these
three it is per cent. As far then
as this factor influences bond prices
it checks any rising tendency. The
preferred stock, on the other hand, is
more responsive TO conditions in the
industry in which the preferred stock
holder is a partner.
There can be no two opinions about
the fact Of business revival. How long
will it continue and how far will it
go is a question not yet clear.