Evening star., 1924-10-12
BIG GERMAN LOAN
|SAbS0RB|NGT TOPIC
Formal Offering Coming Next
Observation-Disclosures
Now Predicted.
FOREIGN BONDS WEAKER
Coming Issue Has Strange Reac-
tion on Several Other Liens
Abroad.
BY GEORGE r. HUGHES.

BY GEORGE r. HUGHES.
Special Dispatch TO The Star.
NEW YORK, October 1.-THE out
look for the German loan has been the
absorbing topic of discussion in invest
ment circles all this week. The formal
Offering OF the bonds is TO be made OH
Tuesday next and the present indica-
tons are that there will be an ex-
traordinAry oversubecrption- There
never was any doubt that the security
from a financial standpoint will be en-
urely adequate.
The sum required for the service Of a
100000. 900 loan is so small compared
with German resources as to be almost
negligible. II was never certain, how
ever. what would be the reaction OF the
American investor to n German bond
issue. OF course. nothing definite can
be said until the subscriptions are in,
but the inquiries which have been pour
last few days have proved very reas-
surng.
Other Bonds Sold.
Curiously enough, confident predic-
tions OF success for the German offering
were accompanied by selling Of other
foreign bonds on the stock exchange
All the high yielding European issues
such as the French and the Austrian,
were noticeably weak. The only ex-
PLANTATION to be had was the intending
investors in the German loan were sell
Ing other foreign securities in order to
switch into the new bonds. 1t seemed
to be the market opinion that seasoned
foreign issues. or at least French eblga-
tions. ought to sell on about the same
Weld basis as the German bonds. This
was rather unexpected development
Most dealers had anticipated that the
successful placing OF the German loan
would stimulate the market for all for
eign securities on the ground that the
putting into effect OF the Dawes plan
would be long step toward the restora-
tion OF normal conditions in Europe
That may still be the ultimate effect. II
has been a characteristic of the bond
market for the past month or more that
anything new was in brisk demand.
while the same grade OF security in an
old issUe was neglected.
New ORerfnGs Abso1bed.
There has been remarkably good all
sorption Of all new offerings this week.
not only the high-grade investment is
sues. but those with a semi-speculatiVe'
feature. Next week effort will be con
centrated on placing the German bonds
but the sum involved is not large
on the total Of investment funds now
available. There will still be plenty Of
money to take up anything attractive.
either domestic or foreign. The most
experienced bankers are still of the opin-
ion that the ease in money Will con-
tinue for a long time to come. There
has been some slight tendency toward
higher rates this week, but it was ur-
important from the long-range stand
l. laal nf f.Illg
about gold going abroad, but that seems
to be also a matter of the distant fu-
ture
At any rate, the circulation state
ment OF the Treasury Department
made public the other day shows
gain during September of more than
s15.o0o.o0o in the total stock of gold
coin and bullion in the United States.
The total is 547,7S5.214, compared
with s4.135,4{6,45S year ago. 1t is
estimated that the worlds supply Of
gold now amounts to a little more
than IS, 600. 900. 900 so that the United
States holds approximately half the
total
silver Goes Higher.
There have been no important
changes in the business outlook this
week such as would affect the invest
ment market. Silver has made an
other new high above anything quot
ed since 1922 Whether this indicates
general rise in commodities such
as has often followed an advance in
silver remains to be seen. Steel in
got production increased approx
mately 80 per cent during August
and September. Copper continues de
pressed. the expectation that German
buying would be begun on a large
scale not yet having been fulfilled.
Rubber is around the years high.
Car loadings have made more new
high records.
In general. business seems to be
going along steadily notwithstanding
the political uncertainties Politics
are really minor influences in the in
vestment situation, no matter how
important in speculative circles.
Railroad sAfter Funds.
In railroad developments the i'm
portant announcement this week has
been the decision of the Illinois Cen
trail directors to raise s11, 100000 OF
new capital by the sale of common
stocks. The only comparable opera
tion by a railroad in recent years
was by the New York Central The
railroad security market since the
war has been in no condition to alb
sorb common stocks. Not alone was
there was always the fear of adverse
regulation. When the carriers need
ed new funds they were compelled to
sell bonds, or. in a few instances,
preferred stock. The action of the
Illinois Central, therefore, marks
change in attitude which may have
far-reaching results. 1t certainly in
dicates confidence on the part of that
roads board in a more favorable feel
ing on the part of investors toward
railroad securities.
Probably the Illinois Central is in
as good a position as any other
American railroad to make the ex-
pertinent. If it succeeds, other roads
will doubtless follow the example.
Nothing would be more salutary thar
q demonstration that the time has
come when II is possible to enlist
new partners in railroad enterprises
instead of meeting all financial needs
BY borrowed funds.
(CDpyriSht 1924, by Consolidated Press