Evening star., 1923-11-11
BELL BOND ISSUE
OF VITAL IMPORT
$1OO, 600, 900 Offering'sQuic
Sale Most important De-
yeIopment of Week.
SHOWS NEW CONFIDENCE
Less Fear of Next Congress Now
Observation-Disclosures in Taxes
Widely Discussed.
SHOWS NEW CONFIDENCE
BY GEORGE IT. HUGHES.

BY GEORGE It. HUGHES.
Special Dispatch to The Star.
NEW YORK. November 10-No one
development of the week has been
more significant in the investment
markets than the successful placing
|of the s1O0,OO0,000 new issue of
American Telephone and Telegraph
bonds
Outside of government operations
this was the largest new offering
since Anaconda Copper obligations
were marketed last January. Invest
ment bankers have been greatly en-
couraged' by the favorable reception
accorded TO this new issue. The over
subscription was all that could nave
been expected.
Return of Confidence.
1t is all the more gratifying when
the subsequent market course OF 9th
er new large offerings, even of prim'
quality, during the last six month
was borne in mind. Even such good
bonds as the Illinois Bell Telephon,
SIS, to say nothing of the Republic -
Cuba 5 u s, broke badly when the syn
dicate was dissolved and investors,
who bought in good faith at the orig
| inal offering price, had the unpleas-
ant experience of seeing the market
lyalue of their bonds suffer very sui
stantial loss. The fact that notWith-
standing all this they were willing
to take so readily this new large IS
sue bespeaks return of confidence
| in the investment market.
Distribution Under Way.
1t must not be taken for granted
that distribution has been completed
of these new telephone bonds. 1t
takes a considerable period perma-
nentIy to place so large an amount
but even if it be admitted that a
large per cent are still i'll the hanos
Of dealers or others who expect TO
dispose of their holdings at profit
| later the very fact that the oYersub-
Scription was so large Is taken as an
expression of faith in the future ON
| the part of those who theoretically
are in the best position to Judg"
Doubtless the action of the specu-
/ lative market has been helpful to
investment sentiment Graduai sag
ging of quotations for stocks is dis
turbing not only to business men
who have been taught to believe that
the stock market is an lntalllbIe
forecaster of the course Of business,
! but acts as a damper upon the bond
market as WELL except always in the
case of those prime obligations such
as libertyS and savings bank Securl-
ties. which fuctuate only with
changes in the money market
More Cheerful Feeling Noted.
There never was any doubt about
the large amount available for in
vestment during the past half year,
but there has been a marked timidity
about buying even OF perfectly sound
securities in the face of the un-
certainty about the industrial out
look born of the pessimism expressed
in speculative circles and which no num-
Der of reassuring statements by bank
ers and economists served to dispel.
Whether the rebound in stocks IS
fully justified or not is matter Of
opinion. The fact remains that a
more cheerful feeling is now in evil
dence.
In another respect the markets,
both investment and speculative,
have maintained an unchanged at
titude. That is their remarkable in
difference to unfavorable news from
abroad. AS in previous weeks, the
foreign exchanges have registered a
concern over the situation in Ger
many and its effect on France and
the rest of Europe.
Home Trade Active Factor.
Foreign dollar bonds have reacted
slightly and there has been some re-
Election of the crisis on the other
side in commodities, but trading in
securities has gone on with an eye
single to domestic trade, present and
prospective. 1t may even be said
that the disturbances in Europe have
been stimulus TO the market for
investments of the highest grade, in
asmuch as foreign buying of Amer
lean securities has again been re-
ported on no small scale.
This buying is said to have come
principally from Amsterdam and
only for Dutch investors, but for Ger
man as we'll. 1t has been marked
by demand for quality, regardless
of yield. Early in the summer these
fFr- af fcr,N Il e..
term bonds. This week they seem
to have been turning their attention
to the shorter maturities.
Elections Unimportant.
Financially speaking the results Of
the election were unimportant. As 4
| matter of fact as the time for the
meeting of Congress approaches there
| is less talk about legislation adverse
| to business than there was six months
ago. There is still doubt about what
will be done with the transportation
act and railroad stocks have teen
sluggish compared with industrials of
| the same grade, but there is an H.
| creasing disposition to believe TO
| radical legislation will be successful
! Senator CumminS is quoted say
ing that eventually railroad conSodi-
dation must be made compulsory.
Otherwise the prosperous roads will
never take over the unprosperOuS.
But even he admits that just how
this is TO be accomplished Is not plain
| lasd that in any case it must take a
| long time. Meanwhile the railroads
| have given a remarkable exhibition of
efficiency in handling record breaking
traffic. For nineteen separate weeks
| this year the loading of revenue
i freight has exceeded 100000 cars
| per week. It will be difficult to make
| out case against private ownership
| on this record.
| Tax Reduction Talk.
Next to railroad legislation the
most interest is taken in the possibili-
! ties of tax reduction. Cutting of sur
taxes on high incomes would un-
doubtedly divert capital which now
seeks refuge in taX-eXempt bonds to
taxable industrials. 1t looks increas-
ingly probable that some sort of =
bonus bill will be passed. but whether
the money will be raised by taxation
! or by new government borrowing s
| hard to predict. Dealings in libertys
have gone on this week as though no
new issue of government bonds for
bonus purposes was in sight.
Copyright. 1921
DJ NN CT mn mn u0TCI