Evening star., 1923-08-12
STRENGTH IN BONDS
b. OF THE HIGH GRADE:
Feature Of Investment Activ-
:: ity During the Week Held
Significant.
HAS BEARING ON FUTURE
Trading on Small Scale Due to
! Business Suspensions for Hard
ing Funeral.
HAS BEARING ON FUTURE
BY GEORGE r. HUGHES.

Special Dispatch TO The Star.
NEW YORK, August Il.-Due to
the suspension of business entirely on
Friday and partially on Wednesday,
trading in the securities markets was
ON small scale this week, and the
changes were irregular and confused.
There were, however. two or three
significant movements which, il sus-
tanned. may throw some light upon the
future.
One was the demand for the very
highest type of investment bonds
and the other was the discrimination
Snown in the stock market between
tne ShareS of those corporations in a
thoroughly sound position and those
OF organizations where the outlook is
more doubtful. In "a bull market
little such discrimination is shown.
onder the enthusiasm Of the buying
stocks for the most part move to-
Sether without much attention being
paid to relative values. In the same
way, In a bear market" lhe/trend is
Cownward. and the good suffers with
the bad. Neither of these conditions
.prevailed this week.
Bonds Show Marked Strength,
The strength in the high-grade
bonds was marked. This does not
mean that the advances were large
gain of point in a bond which is
sslllng TO return only a little more
IMAM liberty is large. Even frac-
tional gains sometimes are impor-
tant as forecasting investment ten
Iencies. A study Of the range Of
.Snd quotations this year to date
SHOWS e that the "gilt-edged" issued
were at the low In the spring about
Wnen stocks were selling at the high
since March, however, and while the
STOCK market was turning downward.
enese bonds have very slowly and
upward. This week the progress was
pronounced
Atchison general Is may be taken
as the type OF this class OF bond. 1t
Is probably the premier railroad Sc
curity. The Atchison is among the
most prosperous OF all America rail-
roads and it's general per cent bonds
OF 1898 are secured by first lien upon
some or the most important MILEAGE
IN tne country; There is no room for
the slightest doubt as to it's quality.
II is very interesting then that these
ponds should have made a new high
record for the year on Thursday and
.nat purchases in comparatively small
amounts should have been sufficient
70 cause this advance. In less de-
gree other bonds of that grade have
shared In the Improvement
Source OF Buying Uncertain.
Now 1t is impossible to say with
I any degree Of certainty from just
what sources buying of this kind
comes. Ordinarily it is banks and
insurance companies which invest in
this class of security. Due to the
enect of the income tax private in
Eestors generally demand a higher
demands for money for strictly com
mercial purposes banks with surplus
FUNDS have turned to bonds. But
tnere was another suggestion as to
fhC e,Nk
high grade bonds this week. This
was that the buying was coming from
abroad and possibly from German
sources With the mark imitation
seacih1ilns such fantastic heights that
mlillon more or less to the dollar
Is hardly worth counting. 1t would
be very natural for German capital
20 seek refuge in securities. about the
intrinsic strength of which there
could be no question. This explana-
Alton is plausible one.
Certainly conditions on the other
side have showS few signs Of i'm
provement.
Francs mt New Low.
The French francs have made a
new low record for all time So have
the Belgian francs There is grave
anxiety in Great Britain and even
here in America. but it is reasonable
to suppose that our own domestic
conditions will continue to govern
business here
This makes all the more interest
ing the discrimination shown in the
stock market. Stocks of northwest
ern roads have displayed further
weakness on the theory that the
plight of the wheat farmer will re-
act upon prosperity OF the whole re-
gion served. On the other hand. Sc
curities OF the anthracite carriers
have been in favor of the theory
that the Washington authorities will
intervene to prevent q strike. That
being the case, there has been active
speculation in both the bonds and
stocks of the Erie, which has been
reporting astonishingly good earn
tngs.
Among the industrials. favor has
oeen shown TO the shares OF the
electrical manufacturing companies,
while stocks of corporations inter-
ested In shipping have been reactins
until in some cases new low quota
tions were reached.
Hope in the Outlook
Generally speaking. the business
outlook is not unfavorable, and the
prospect is for reasonable prosper
ity. Confidence in President Coolidge
continue at record figures Unem-
ployment is at a minimum, and the
nervousness over the political sit
uation as affecting the railroads has
abated, for the present at least.