Evening star., 1924-09-28
.UPSW|NG IS STEADY
IN BOND MARKET
Forty Domestic Issues Gain
on Every Business Day for
Two Whole Weeks.
CAUTION STILL PREVAILS
Secretary Mellon Apparently Be-
lleves Cheap Money Is Here
for Long Time.
BY GEORGE T.. HUGHES.


Special Dispatch to The Star
NEW YORK September 27-The
consistent movement in the markets of
the week has been found not in stocks
or commodities, but in bonds While
speculative sentiment has been greatly
divided, and opinions as to the outlook
| for trade at variance. the demand for
investment securities has continued un-
abated
1t has not been a market Of spectacu-
lar advances, and probably is the more
Impressive on that account The upward
movement has been very slow, but very
steady. Taking the average price Of A.
domestic issues there has been gain
now every business day for two weeks
1t is not alone the So-called giIt-edgtd
bonds, such as United States Govern
ment loans and first st-mortgag rails.
which have been in demand. but the
good middle and second grade issues
have been quickly absorbed.
Prices Near High Point
Prices have not yet got back to the
high point Of the early Summer, but
they are closely approaching it. This
week United States Treasury AIS sod
at practically their best price, but the
other Liberty bonds are still substartial
fractions below the record. At the same
entered the market, indicating conf
dence in it's stability. Such confidence
is not surprising when it is remembered
that bond quotations were higher in
1922, to say nothing of 1916 and pre-
war years. when money was not nearly
as cheap as it is today. The only SUI
prising thing is that there should ever
have been any doubt about the inher-
emily strong technical position of the in
veSment situation.
Dealers and traders are still proceed
ing cautiously. probably because pres
ent-day quotations look high compared
with those of last January. There is
minimum of speculative buying, fact
which makes the market less susceptible
to the reaction. These dealers feel the
same way about money as they do about
bonds. Money is low and bonds are
high. so they reason there must sooner
or later be d reversal in both. OF
course. such change will eventually
come. but the best opinion among bank
erS and economists is that the turn IS
still distant. Some even predict low in
terest rates for the next two years.
Treasury Urged TO Act.
That this problem as to the money
outlook is attracting wide attention
is shown by the recommendation
adopted by the investment bankers a.
their convention in Cleveland thus
week. urging that the Government
take advantage of the present Situ-
alton to issue longterm bonds. They
argue with much force that If the
prevailing opportunity to sell Gov
ernment securities on very low
WELD basis is not accepted the Treas
ury may have to pay a. much higher
rate Against this view may be set
the action of the Government bond
market itself
1t is not without significance that
the strongest Government obligation
has been the one OF longest term.
| Purchasers of the Treasury Az ap-
parently do not fear higher rates for
money, and so far Secretary Mellor
seems to be of this opinion, as ali
the Treasury financing has been short
term He would hardly have Dor
rowed money for one year at ~ per
cent if he had believed that j"
months hence he would be obliged TO
pay much higher rate.
Bankers for the Canadian govern
mert seem to agree with the Secre-
| tary of the United States Treasury
At any rate. the Canadian govern
ment this week marketed 100000. 600
in one-year notes at 4 per cent
Foreign Issues Gain.
The banking advisers of the Arren-
! tine and of France have successfully
| provided for the immediate needs OF
| these governments in the same wav.
| Perhaps too much stress should not
| be put upon the case of France, as
| it is by no means certain how the
| market would have taken long
! term French loan. We shall know
| more about that after the German
bonds are offered. Incidentally, it
| may be mentioned that foreign Sc
| curities have shared in the general
| bond market Improvement this week
| only to a moderate degree.
| In the more speculative field, rail
road securities have been in favor
| this week. This is partly because the
i car loadings show gratifying gains
| and partly because earnings state
ments are making more favorable
! comparisons with those of a year ago
| than they were in the Spring and
| early Summer. In other words. the
trade reaction has had surprisingly
| little effect upon traffic Predictions
| that the New Haven would solve it's
| refunding problem of next year with
| out difficulty added to the optimistic
| feeling as to the general railroad
| situation The Southern roads are in
creasingly prosperous and about the
only remaining weak spot is to be
| found in the Northwest. Heavy
grain traffic may clear up that.
| Public Utilities Strong.
| As to the public utilities. the out
| look is so bright that attention has
| been concentrated upon the stocks
where the possibility of speculative
| profits is greater than with the
! bonds. This is especially the case
with shares of the holding companies
| and instances where stocks have been
split up. Meanwhile the preferred
shares have been almost entirely
neglected. In the judgment of many
| investment authorities, the yields on
| these public utility preferred stocks
are out of all proportion to the risk
| involved.
| Copyright, 1924. by Consolida ted Press.