Evening star., 1925-10-11
INTEREST CENTERS
IN FRENCH BONDS
Attitude of Investors Since
Debt Conference Is Yet
to Be Displayed.
BY GEORGE T. HUGHES.

Special Dispatch 10 The Star.
NEW YORK October lO-The in
vestment problem which is at once the
most interesting and the most difficult
20 solve relates to the foreign bond
situation.
The puzzle is to forecast the reac-
tion upon the minds of American in
vestorS of THE French international
debt compromise. There is no doubt
that if the negotiations at Washing
ton between the American commission
and the French financial representa-
tiveS had been brought to a conclusion
satisfactory to both parties ii would
have been followed by the greatest re
vival of interest in foreign securities
since the war.
Bonds Back on Market.
Il was in anticipation of some such
outcome that Wall street traders a
couple of weeks ago bought large
blocks of French dollar bonds in the
confident belief they would be able TO
resell them at substantial profits. Con
siderins the high yield obtainable on
French obligations, this was not an
unreasonable theory upon which to
work
But. as every one now knows. the
Washington conferences resulted in a
temporary arrangement which left the
situation almost where il was before
they started. Disappointment at this
was evident early this week when
these speculatively held French bonds
were turned back upon the market
and the price weakened accordingly.
Investors Are Puzzled.
After this selling was absorbed. how
ever. quotations recovered in part and
the attitude OF the actual investor was
not clearer than before. Most of these
French issues have been we'll distrib
uted md the floating supply compared
with the total amount outstanding is
not large. so that the market f1uctua-
tions represent little more than vary
ing attitudes of professional traders.
Another matter in doubt is the posi-
tion of the administration at Wash
ington with regard To new French
loans. Probably that will not be de
veloped until the bankers ask indorse
ment for some fresh French bond is
sue but the bankers themselves are
uncertain whether the tentative ar
rangement between the two govern
ments as TO the war debt justlfies
them in negotiating a new French
loan. Perhaps no light on the situa-
ton can be hoped for until il is seen
whether or not the French Parlia-
ment ratifies the proposal which NJ.
CaillauX is taking back with him to
Paris.
Foreign Issues Firm.
Meanwhile the foreign bond market
as a whole remains surprisingly firm.
\ good many authorities had expected
the French episode would he followed
by an exhibition of disfavor toward
foreign securities as group. mat
has not happened.
Quite the contrary. there has been
buying this week of many of the high
er yielding foreign bonds and appar-
emily confident buying. More atten-
ton has been paid to South American n
descriptions and the conclusion is, II
the market indications are to he relied
upon. that the American investment
market is still able TO absorb large
amounts Of foreign offerings.
In the general bond market the week
has witne ssed an increase in selling
orders for account of corporations.
Curiously enough short-term securl-
ties have been offered almost as freely
as those of longer maturltles.
Liberal Selling Absorbed.
Whether the liquidation represented
merely sea sonal need for funds which
had to he provided by the selling OF
bonds or whether it was the express
sion of an opinion that the market
was headed toward lower levels can
not lie said The fact is that the sell
ing was absorbed without materldi =
effect upon prices.
Demand from other investors was
strong enough to take care of the bulk
of the offerings. Another indication
of the underlying strength of the mar
ket was the easy way in Which new
issues were sold.
Not much attention has been paid
to the money situation as 1t affects
the bond market. although money is
lust as important a factor as it ever
was. What expressions of opinion
have been ventured have been contra