Evening star., 1924-12-21
SEASONED BONDS
BEING NEGLECTED.
New Foreign Issues Get Most
Attention and Are Very
Well Absorbed.
u. S. LOANS BIT LOWER
Unusual Money Market-Traders
Warned Against Making Care
less Investments.
U. S. LOANS BIT LOWER
By GEORGE It. HUGHES
pccial Dispatch to The Sta,

BY GEORGE II. HUGHES.
Special Dispatch to The Star
NEW YORK, December 2o.-Invest-
ment interest this week has been
centered on new issues, mostly for
eign. Seasoned bonds have been
neglected in the rush to buy specu-
lative stocks.
New offerings, however, have gono
exceedingly well, the outstanding in
stances being the Greek and Belgian
loans. Both of these we're heavily
oversubscribed and sold at premium
over the Offering price as soon as
trading was begun on the exchange.
1t is too early to say how much Of
this overSubscription was for genuine
investment account and how much
represented the attempts of specu-
lators reaching for few points
profit. The speculative fever is now
SO violent that something of this sort
might easily happen. Investment
bankers take every possible precau
ton to avoid these Joy riders" as
they are called in bond circles.
New Issues Popular.
The aim of the banker is to place
his bonds with a permanent investor
and avoid having them turned back
upon the market at an inopportupe
time. Despite every effort. however,
to this end, there is always Il certain
amount of speculative buying of any
new Issue which promises to go well.
1t is without Significance that
while all this active bidding has been
going on for the most recently Of
fered foreign bonds, the older issues
have been duh, neglected or even. as
in the case of the French bond,
heavy. French rs, for instance. which
also were oversubscribed and which
also went to a premium in the first
few days of trading, are now back
at the offering price, and while tIa
German IS are still we'll above the
original quotation, they have lost 3
good part Of the premium and sHa.-
no inclination to go higher.
Odd Price Differences.
Another noteworthy fact is that
there are some curious price dis
crepancieS between the new and the
old foreign bonds. The Belgian 6s,
which have just been brought out,
sell to give the investor a lower re-
turn than he might receive from tho
old Belgian SIS. Hungarian 7hs sell
only slightly above the new Greek Is,
although the former pay half of l
per cent more interest For the
heaviness in French bonds there is
no adequate explanation in the news.
follows those matters, is DISCUSSING
the funding of her war debts to Gre;i.
Britain and the United States
1t is not likely that any decision
will be reached for a long time 10
come, but the fact that negotiation
nave been begun is encouraging IL
is undoubtedly true that France Ia.
made progress with her finances. but
investment sentiment toward French
bonds has not improved accordingly.
Foreign Bonds Down.
The result OF all this churnina
about IS that the average price oL
typical foreign bonds is down on tho
week and down on the month. The
hlgh point was reached on November
70 last. To less degree the saua
condition prevails among domestic
bonds. Here il is the good middle
and second grade bonds that have been
neglected, by which is meant bonds
to yield around per cent. The
trouble is that traders are not III
terested in anything that does not
promise action" and even investors
seem to be Indifferent to real value
| or course, this condition will not last
indefinitely. Sooner or later real val
ueS and not price changes will IT,.
the governing influences in the finai,-
cial markets. When that time comes
! investment bonds will again be il
demand. Meanwhile, there are man.
opportunities awaiting those Who
have SO far managed to escape the
current speculative mania.
support Expected Soon
After the first of the year, suppc.l
for the bond market may be expeci-
ed from the insurance compani,s
| who have large sums they must in
vest. For the present, governme-L
securities are dull and slightly lower.
! While there was an eXceeding,-
heavy cash subscription for the ner-
! Treasury Is, it does not appear likely
that any large amount of the third
AZ Liberties viii be exchanged for the
| new bonds A holder Of third 4lG LfbeI-
ties who turns them in for the new IS
would lose oRe-quarter per cent cur
| rent income and have only the
| longer term of the As as compensa-
| tion. From the long-range stand
point, that might be sufficient, but
| just now the general opinion is that
| money rates are pointing upward ana
| so the shorter maturities have ths
preference.
Unusual Money Market.
In the money market this week call
| funds and time accommodations have
moved in opposite directions. Gail
l money got down 10 tnc = per cent
| level again after earlier quotations
at l per cent higher. Time funds
were tirmer and for six-month money
4 per cent was asked. It is the nor
NAL procedure at this time of year
! for money to go higher. 1t is really
not a guide to what may be expected
after the January first requirements
| have been taken care of. OF course,
! II speculation keeps up the present
pace and business continues to ez-
| pand, more money will be needed.
| Then, too, there are gold exports to
! be considered. So far this month
| about S23,000.0O0 has been sent out
| of the country, but 'inasmuch as
there is over $4,000, 100000 left, there
How to- Avoid Suffering.
On one point investors may need
I a word of assurance. With the stock
| market making new high records
/ daily and with speculative enthusiasm
at the boiling point. the financial e&-
perts are diligently preaching eau
! ton, warning their followers that
! there is always an end to rising
| market and that when a reaction
| comes good many spectators are
| going to be left high and dry. Such
! warnings should be needed by those
who need them. They do not apply TO
! investment values. The industrial
| outlook is bright and those who buy
I sound securities of real merit for
| nermanent investment are not going
| to suffer.
Copyright, 1924. by Consolidated Press
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