Evening star., 1926-08-22
BUYING OF GERMAN
BONDS |SFEATURE
Little New Financing and Re-
discount Raise Have Hurt
Home InduStrialS.
BY GEORGE r. HUGHES.


SPECIAL Dispatch to The star.
NEW YORK. August 2l.-The in
vestment market of the past week,
while diSplaying practically the same
characteristics as that OF the previous
week has become somewhat more
animated and has been featured by
continued heavy demand Tor Ter
man industrial and municipal obliga-
tionS.
The more prominent members OF
the group have been carried forward
in some instances rather sharply. and
the closing of the week finds them
quoted at or close 10 their record
high prices for the year.
The buying which has manifested
itself in these foreign obligations has
been due in large part to the com
paratiVely small amount of new
financing in the domestic market. At
the same time, the slowing up which
has been particularly noticeable IN
the demand for home industrial issues
has been a natural sequence to the
recent increase in the New York Fed
eral Reserve rediScount rates IRON
the 3i2 per cent figure. which pre-
vailed from April %, to a per cent
rate, thereby bringing it in line with
the other regional rediScOunt figure.
u -
itrelf because Of the 1 per cent re-
tiscolnt which has long been in ef-
feCt with the other regional inSt-
tuticns. has had it's effect upon the
market for industrial bonds, which
have become dull. with price fluctua-
;ions comparatively narrow
Rails Divide Interest.
Speculative railway bonds have
duo.
trials. the demand for the former
issues being sympathetic with the i'm
provomcnt which has taken place in
the better class Of railway shares on
The stock Exchange. Activity at
higher prices for railroad securities
has been tho result Of a clearer reCOG-
milton of prosperous conditions of the
railroads of the country and the OK
CeedinGly bright future which the in
duStry is facing.
So far as new financing is con
Cerncd. offerings of foreign obligations
have held the center of the stage dur
ing the past week. The $l6,000,0 900
issu" of the Republic of Peru conSti-
tutcd the largest piece of new tinanc-
Ing and is reelection of the activity
that has ccntcred in South American
offerings. The issue consists Of eX-
tornal secured sinking funds 7l2 per
cent gold bonds due September |, 1856.
and is priced at 100 and interest, to
yield 80 per cent. The proceeds are
TO u" used to take care of Peruvian
government Indebtedness for public
works and. in the discretion of the
republic, toward the establishment Of
q national agricultural bank.
Next III Importance was the offer
ing Friday of $9.J00.000 issue of
National Power and Light Go. 6 per
cent gold debcntures at 9& and interest.
to yield over 6.lo per cent. These
have been accompanied by offerings
of other foreign obligations aEgregat-
ing some S35 900 900 in all. During the
past several months foreign flotationS
have been far below those of the cor
responding period in 1925, but with
further new offerings of this character
expected in the later months of the
year. the total for 1926 is expected to
result in tho total coming close to if
not exceeding those for the year 1925.
The market for new domestic issues
continues dun. but expectations are
that in the near future home public
utility and industrial issues will again
Absorb most attention.
New Telephone Issue.
III" final result of the Sl5i 900 QUO
American Telephone and Telegraph
addition stock issue. made public this
week. was highly gratifying and went
10 show the abundance of funds avail
able for new high grade securities.
This represented the largest piece OF
new financing which the market has
been called upon to absorb so far this
wear. and according to the final figures
kll of the stock was subscribed except
bne piece. What was more note
worthy was the fact that approximate
iy S4 per cent of the entire issue was
paid for in fun as of August >, and
bnly II per cent subscribed for on the
tnstalmcnt plan.
SO far as the money situation is con
cerned. no material change has taken
place from the conditions which pre-
NAILED a week ago. The hardening
Tendency which has developed in the
market for time funds naturally is cN.
bected TO continue so long as activity
In general business is on the inCrea Sc.
The recent raising of the New York
fediscount rate was looked upon as a
natural procedure in the normal
Working of the system if the rate
keeps in line with the market. 1t has
been pointed out that this action. if it
IS to he followed by IA similar policy
tn the part of other Federal Reserve
members, may result in some GQuida-
zion of securities by member banks in
ktead of utilization of the rediSCount
privilege. but the investment market
has given no indication of such 81 de
Selopment.