Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1925-08-24
Stock Price Rally
And Bond Strength
Features of Week

Features of Week
New York, Aug. 23-(AP)-A rally
in stock prices which carried the
rail and industrial averages to the
highest levels in years, revival OF
strength and activity in the bono
market and a substantial advance In
prices were the principal develop,
ments in this weeks financial ana
commodity markets.
Cotton prices showed relatively Ut,
tie change. Money rates continued
easy although there was q temporary
stiffening of the rate on cali funos
Friday afternoon. Foreign exchange
held firm, Belgian francs rallying
moderately on the announcement
that an agreement had been reached
for the funding of the Belgian debt
and the Scandinavian exchanges
bounding UP on reports that the pro-
ceeds of reaching dollar loans foa--
ed in the United States were called
to those countries.
The advance in stocks. was not uni
form. Steels, rails and coppers gave
the most impressive demonstrations
of group strength while reactionary
tendencies were most pronounced in
the motors and public utilities. A
rally in oils was short lived
With car loadings crossing the
million mark for the fourth con-
secutive week, the railroad situation
appeared especially bright, with op-
timism intensified by series Of IA
vorable July earnings statements.
Virtually all the carriers which have
reported so far have shown substan-
TALLY higher net income than in July
of last year.
Gains in the car loadings have been
paralledel by the improvement in
freight traffic computed on the basis
of net ton miles, which for the first
six months of the year totalled 2l2,-
sos, 100000 This was an increase Of
more than seven billion net ton miles,
or 3S percent over the corresponding
period last year but SIS urder the
same period of 1928 when the vol
ume of freight was the creates on
record for the first half of any year.
Gradual improvement in the iron
and steel industry was noted by the
weekly trade reviews, which re-
ported that operations had been
speeded up to 20 per cent of capacity
and that the month probably would
show an average of 70 per cent gains
in week-to-week purchases rather
than any increase in forward buying,
accounted for the expansion Of mill
activity.
An enlarged demand for many COM
modities last week was followed by
series of price advances, which en-
braced sugar, industrial alcohol, vir-
tually all the non-ferrous metals and
scrap iron. Quotations on crude oil
and gasoline, however, were lowered.
hut in view of the sharp reduction in
the output of petroleum this action
failed to affect the oil shares serious
ly.
Although price reductions on auto
mobiles had been expected to stimu-
late business, the development of an
open price cutting war has aroused
some apprehension in the motor in
dustry. The revisions by some man
ufacturers have been so drastic and
numerous that 1t is now feared that
the increase in new orders will be
Offset by the lower profits. So far
this year, however. the motor indus
try has found conditions exceedingly
profitable.
Labor troubles have been RESPONSE
BILE for uneasiness in certain indus
tries. The threatened coal strike has
resulted in speeding up the output of
bituminous COAL which is now run
ming above ten million tons week
for the first time since last winter.
The building industry has been SER
iously hampered by the dispute be-
tween the bricklayers and plasterers,
which 1t Is estimated has tied up $15,-
600, 900 in new construction through
out the country.
Rising prices and marked expan-
sion in the volume of trading gave
convincing evidence last week that
the summer slump in the bond mar
ket, which had been under way since
June, had been definitely checked.
The returning ease Of mony condi-
lions supplied the key to the renewed
demand for bonds, notably the high
rating investment in securities.
Freer credit, together with reports
that the September financing of the
u. s. treasury would be limited to a
relatively small bond issue at low
er interest rate, revived interest in
Liberty bonds. Large scale buying.
some of which was rumored to be for
the governments sinking funding ac-
this department and prices improved
substantially.
Reassured by. the highly favorable
character of the July earnings re-
ports so far made public and the
succession of new weekly freight
traffic records, traders and investors
again bestowed their favor upon
railroad liens. Obligations of the
stronger carriers were freely bought.
A striking feature of the weeks
trading was the heavy market de-
mand which developed for Inter
national Telephone 81 per cent de-
bentures following the oversubscrip-
ton of $25,000,O00 offering. With
buyers attracted by favorable con-
vertible feature. the bonds COM
manded a premium of more than 3
points above the offering price of
80 as soon as they were admitted to
trading on the New York stock. ex-
change.
Settlement of the Belgian debt
problem, providing for the payment
of more than $700,000OO0 to the
United States over a period of 81
years, had tonic effect on foreign
bonds. The outstanding Belgian OBJ
legations were strengthened and
some of the French issues attained
new top prices for the year.
Belgium. itself, was said to be not
in need of immediate financing al
though the government may borrow
S25,O00,OO0 or so late this fall or
early next year. France, however,
probably will be in the market as
soon as a basis has been reached for
funding its debt and similar accomo-
dations may be sought by Italy and
,Czecho- Small bond issues
for Poland and Jugo Slovakia are in
prospect for the fall
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