Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-10-19
FRENCH LOAN WILL
!, Be QUICKLY TAKEN
Same Success Expected Here
as in Case of Big Ger
man Issue.
By GEORGE T. HUGHES,


taecisi Dispatch to The Star
NEW YORK, October 1S.-The out
standing event in the investment
market this week has been the sue
~ess of the German loan 1t had been
predicted that there would be a heavy
over subscription, but the result was
none the less gratifying to the bank
erS who undertook the work of dis
trlouting this first German security
TO be offered in the United States
since the World War
The explanation of the favor with
which the issue was received lies
= liberal yield. Both these features
were extremely attractive. The
amount required for the service of
S2OO.000.o0o loan, that being the
approximate total including the por-
IRONS sold in other countries than
america, is so small compared with
German resources as to be almost
negligible.
Small Investments Aided.
liner" was another factor. however.
influential in the prompt sale Of the
bonds. Undouhtedly there was an ap-
peal to speculative Imagination
which was almost irresistible. The
same confidence in the ultimate re-
livery OF the German nation and the
herman people which led to the un-
fortunate speculation in German
marks and later in German pre-war
mark bonds evidenced itself in the
rush to subscribe to this new loan
and this time as far as anyone can
see, the confidence is not likely to be
misplaced
Every effort was made by the under
writer's to favor the small investor
and to discourage the Spectator who
always follows along on occasions
IKE these hoping to make quick
turn in the market. The bonds
were allotted as far as possible to
houses with a clientele of genuine
investors. OF course a certain amount
VIII inevitably come back upon the
market sooner or later. This can
never be entirely avoided. Selling of
this kind, on the other hand. will be
compensated for, in part, at least.
by new buying on the part of those
VINO awaited the market appraisal
or the loan before investing
French Loan Interesting.
Now that the German Offering is
out of the way the market is talk
ing about a French loan. Proba bly,
me reports are bit premature
Surely there will be a vast amount
end of the year and France is pretty
certain to be among the countries
applying for further accommodation
on this side. In a way it will be
almost as interesting to see how in
vestors take to a new French offer
ing as it was to observe their re-
action to a German issue.
French bonds are selling around a
7ia per cent basis and while politi-
cal doubts are no longer predomi-
nant, there is still "a good deal of
uncertainty about French finances.
Two French railway loans have re-
Gently been absorbed but a $50, 00e.-
900 French government offering will
prove a more severe test. At the
same time the abundance of invest
ment capital seeking employment
makes it probable that anything at
tractively priced will be readily
taken.
Treasury Issues Jump.
Aside from the German loan the
feature of trading in bonds has been
the advance of the United States
Treasury IA to a new high record
for all time. This is the longest
term Government obligation matur-
ing in 1852. but redeemable in 1947.
At this weeks high price the matur-
ity yield is So per cent. The sig
nifcanCc of this gain in market quo
tations is in its bearing on the money
outlook. 1t is quite evident that the
bankers who arc buying Treasury
AS, and most of the purchasing
comes from this source, are of the
opinion that easy money is with us
to stay Indefinitely. The bankers, of
course. may be wrong. They some
times are. But their view is entitled
TO respect. Meanwhile the general
bond market has marked time.
Investment securities of the first
grade have been firm but not higher.
In fact, taking the average, there
has been a slight decline on the
week. Prices are just about where
they were a month ago. Even though
there should be higher charges for
money, it does not follow that a re-
action in bonds would Immediately
ensue. The bond market Jagged be-
hind money on the way up and it
is likely to lag behind it on the
way down.
Speculative bonds, as is usually the
case, have this week moved more or
less in unison with speculative
stocks. Some of the railway income
issues are down rather sharply from
their high points of the year. What
is true of railroad securities is also
true of the public utilities. F'unda-
mental condit ionS are sound but
spectators and investors well are
standing aside for the present.
Copyright, 1874, by Consolidated Fress)