Evening star., 1924-10-26
VALUES IN BONDS
CREEPING HIGHER
Action of Treasury a. las
Draws Special Notice Amonq
High-Grade Issues.
RAILS ALSO IMPRESSIVE,
Phenomenal Money Rates Still
Amaze Financiers-Crop Funds
Already Supplied.
RAILS ALSO IMPRESSIVE,
BY GEORGE #. HUGHES,

BY GEORGE II. HUGHES.
Special Dispatch to The Star.
NEW YORK, October 25.-The
BOND market has been creeping
higher this week. This refers to
quotations for strictly high-grade
investment securities. There has
been active speculation in 1ow-priced
railroad obligations, but that is due
to an entirely different set of condi-
tions. What is really significant for
the long-range outlook is the steady
accumulation of United States Gov
ernment issues and of the railroad
bonds of the savings bank class
Treasury 4As Active.
This buying was especially notice
able in United States Treasury ~
and in such railroad issues as Atchi-
son General As universally admitted
to be the standard of quality in first
mortgage rails. Individual investors
are not a factor in this market.
Banks and financial Institutions make
the quotations by their operations,
inaSmuch as they are the only ones
who can afford TO take the low re-
turn these securities afford, income
tax demands being taken into ac-
count The Treasury AIS made
another new high record this week
for all time. First grade rails did
not equal their best prices even this
year, but their market movement
was impressive nevertheless
Money Rates Unchanged.
All this has direct bearing on the
outlook for money rates, which in
turn govern the investment market
1t would seem that money was now
so low that the only change that
could possibly occur would be up
l. -. r. fN-
borrowed funds would adversely
vestments. Nothing of the kind has
happened so far, and, as far as the
action of the bond market goes.
nothing of the kind is in sight. The
phenomenal ease in money now pre-
vailing is aptly illustrated by some
statistics made public this week by
a financial news agency.
Far Under 34-Year Average
Call money now rules at per cent,
but the average over the last "a
years has been 3.S4 per cent. Now
90-day funds are obtainable at
per cent but the average over the
same S4 years has been 442 per cent.
Meanwhile there has been steady
decrease in the amount of monthly
net imports of gold. The records
show that in April we added over
s44O000O0 to our stock of gold In
July net receipts had fallen TO slo'-
500, 900, and in September the cor
responding figure was only sl,SI6,ooo
1t is argued, and not unreasonaoly'
from these returns that the time IS
approaching when the United states
will be exporting gold on balance.
More Foreign Loans Seem
Those who predict turn in the
30 n n
rpon the large sums expected to go
into new foreign financing. They also
look forward to Increased demands
from business interests And yet,
plausible as this sounds, 1t does not
show in money quotations or, Tor that
matter, in the Federal Reserve Bank
statements. This weeks report OF
the reserve system discloses 1alnnS
off in discounted bills of nearly $40
0O0, 900, making the total drop IN TINS
item for the year over S6Uo,Oou,Voo
Apparently the Autumn seasonal
drain on the money supply has come
and gone without making any I'M
preston upon the total available. II
is, of course, possible that MONDAY
requirements or the turn OF the new
year will change the outlook The
situation is certainly unprecedented,
and it would be very foolish TO be
least, it is plain that lower price
level for investment securities is not
vet indicated by any development in
money.
Much Rail Merger Talk.
Next to the action of high-grade
investment securities, attention this
week has been centered upon the
railroad obligations likely to be af-
fected by consultations. Nothing so
stirs the speculative Imagination as
| the rumor of a merger, so there has
been talk, some of it well founded
and some of 1t merely idle gossip, as
| to pending developments in the rail-
| road field.
The diversion of freight to the
canal route is simply a matter OF
comparative costs. Not only can some
commodities be shipped from the Pa
| cific to the Atlantic seaboard cheaper
by water than by the overland route,
| but there is a margin which allows
for the cost of reShipment for a
considerable distance inland on both
| sides of the continent. Obviously, 1t
| is the east and west roads, and not
| the north and south roads, which are
| the sufferers in this condition. So
| far, it is passenger traffic upon which
| the motor car has made the most
serious inroads. Along with this
drop in passenger traffic has gone a
decline in railroad mileage amount
| ing to more than 1000 miles in the
past eight years.
Some of this represents the dis
| continuance of Improbable branches.
but in many cases it was the busses
that made the branches Improbable.
Investors in railroad securities
whether stocks or bonds, should give
attention to both these subjects.
Copyright 1924, by Consolidated PressI)