Evening star., 1924-06-15
LIBERTY BOND GAINS
MAKE MARKET BOIL
Week Finds All But One Issue
Reaching Highest Prices
Ever Recorded.
MUCH FINANCING LIKELY
How Long Movement VIII Last Is
Puzzling Financiers.
MUCH FINANCING LIKELY
BY GEORGE j. HUGHES.
ecial Dispa tch to The Star

Special Dispa tch to The Star
NEW YORK, June 14.-Sustained
strength has characterized the sscur-
ity investment market all the week
The underlying influence was easv
money which was emphasized by two
important developments First was
the liking by the Secretary Of the
Treasury OF a "a per cent rate on
the governments June Is financing
Inc second was the cutting OF the
rediscount rate by the New York and
the Boston Federal Reserve Banks TO
3H2 per cent. The reduction Of the
New York bank was one-half per cent
and that Of the Boston bank was one
per cent from the previously prevail
ing rates.
The effect upon the bond market
and upon the quotations for money
was immediate. Call money ON the
stock Exchange loaned down to 2
per cent. and on the so-called outside
market q per cent was said to have
OBTAINED in few instances More
important STILL time money also feu
70 a new low, thirty-day loans being
quoted at per cent the rate rising
to per cent for the longer rna.
turtles.
Money Easiest in Seven Years.
Altogether it was the easiest r,or.u
market IN seven years and tha Gov;
eIHmehl financing was successfulIv
accomplished at the lowest rate sfnca
oetore the world war. While the Sec
retary asked for only $3.50 0n0 nno -,
these "a per cent certiffcates suh-
100000, 600 oona
II was hardly surprising. then that
investment IA bonds responded so sbsrn-
United States government Ios = S,.e.n o.eu'
the nrst to be affected The rnart-a,
Ior the old Liberties and fnr fba
treasury as, the long-term issue.
Poppy, fpofpuIlafiy k designated as MELONS"
week every Liberty issue was se11ins
az the highest price of the wear and
every one except the tax-exempt 3Le
at lne highest price ever recorded
tiprod ioils this movement can be con-
tIhueo IS a matter on which oninion
IS divided but some well infarred
pono men were predicting thar CO.
eminent obligations, long term oSebt
20 sen on 3A per cent basis TO CON
' 70 money market conditions.
High Grade Rails Picked.
the buying overfiowed fror, ~
and ;as ..es mo nigh grade rails. road
Ward movement was not onita e.
sapIo, but was equally signifcant
-nany seasoned issues so strongly So
.ured as to move independently Of
80 s aue outlook also made high rec
orus Tor the year. judging nv tbA
record OF previous years. the adJ,apce
IN theSe securities could e-o r1,,cs
lurther without overdiscountinp- ~
money situation. Examination az +be
price record over a series az yasrs
shows that there are msny bte1t
srade bonds selling below the hirrb
POINTS or 1917 and in some instances
even below the highs of 1922 This
IS more noticeable in railroad bonds
s+anne AschtHss A.ohis oank class. For in
stance' atch1Son general Is. generally
regarded as the premier security OF
us kind sold in July. 1922, more than
points above present quotations.
Money Trend Factorx.
There remains. of course. the nos
sio1iity OF halt in the downward
movement of money rates and of a
reversal OF the. trend. As to that
there are two factors to be consid
cred: First, the business outlook,
ana, second, the gold movement. 4
sharp revival in the program for
money for commercial purposes
rate charged for accommodatfon.
Sooner or later this is bound to come.
but how soon no one can say. AS to
the gold movement there is as vet no
sign of check to the incoming tide.
Because of these two unknown quan-
tinties the banks are still giving pref
erence to short-term investments of
every description, of which the sup
ply is not equal to the demand. It
markets. however. that the rise goes
on a long time after the original
cause has ceased to operate.
Foreign Securities to Front.
One of the most interesting incl
dents of the week was the renewed
interest in foreign securities. Evi-
IDENTIFY the high return was begin
ming to look more important in the
eyes Of investors than the political
uncertainties in Europe. At any
rate. new high records for the year
were made. not only in the United
Kingdom bonds but in French oblt-
cations as well. Liquidation by timid
holders had apparently entirely stop
ped. The same phenomenon was OBJ
served in South American bonds,
traordinarily high yields Similarly
domestic bonds generally considered
speculative Joined in the upward
movement on the theory that the re-
turn was greater than the risk war
ranted.
Railroad bonds were particularly
favored, less attention being paid to
earnings than to advantages to be
expected from proposed ConSollud-
tions. 1t may be that May state
ments will cast damper upon this
band of speculative enthusiasm. Car
Ioadings and weekly reports of gross
earnings suggest such a possibility
but there was no evidence of any
doubts this week.
1t is reasonable to suppose that
the volume of new financing will ma
terially increase now that conditions
are so favorable. The reception ac-
corded the new "Nickle Plate" bonds