Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-02-28
TWO BIG FACTORS
IN BOND MARKET
Weak Stocks and Sitter
Rates for Money Have Aided
in Price SIumpS.


NEW YORK, February 27.-BonG
prices yielded at the close of the
week, partly in sympathy with the
break in stocks and partly responding
to a hardening money market.
Which of these two factors was the
more Influential it is impossible t.
say, but the matter is not very I'M
portant, for the declines, as far as
the strictly investment issues are
concerned, We're too small to be OF
any significance from the long range
viewpoint.
Naturally enough, the setback was
larger in the second grade and specu-
lative issues and it showed to some
extent in the foreign group. Here,
at least, money conditions could not
he held responsible because the high
yield which foreign bonds as a group
afford render them immune to huctu-
atoms in interest charges. Nor was
there any important news from
aboard to affect prices.
Moves Hard to Explain.
There was no reason, for example.
why French bonds which had stood
up all during the extreme weakness
in Franc exchange should sell off
after the exchange quotations itself
had rallied, but they did just that.
OF course, French bonds are not
fairly typical of the foreign invest
ment field and il may be that they
were simply rejecting the cumula-
tive effect of the uncertainties of the
French financial situation.
The other side of the picture is the
ready absorption of new issues. for
eign and domestic as well. AS far
as can be discovered there is no con-
Of h.
standing the large amounts the
market has been called upon to care
for. Some of these new offerings
have been unusually interesting,
among them the Italian Hydro-Elec-
trio issue sold in the latter part of
the week. The unique feature of this
loan was the provision whereby the
Italian government agreed to supply
dollar exchange for the service Of
the loan.
Little Worry Over Money.
Turning to the money market, the
best opinion is that the hardening this
week was only temporary, mostly due
to the end Of the month requirements
II may hold over until next month be
cause of the operations incident to IN
come tax payments on the 18th, and
the Government financing that comes
q L
of the Federal Reserve Banks shows
only a moderate gain in discounted
bills and the reserve ratio for the SyS-
lem as a whole is higher than it was
week ago, although there was
Slight decline in the New York banks
percentage.
Railroad earning statements for
January now coming in show both
improvements and declines over re-
suits for the same month in 1928.
January "A year ago. however, was an
exceptionally Favorable month for the
carriers. This year there had been the
loss in anthracite coal traffic in the
East. and unfaVorable weather con
ditions in other parts of the country
to contend with.
Roads Regaining Traffic.
In one respect there is cause for
congrat Ilation. Progress is being
made in regaining some of the pas
senger traffic lost to the motor cars.
The Southern Pacific statement re-
vealed this trend. For some time now
The losses of the railroads to the auto
mobiles have been progressively de-
creasing and it looks as though the
turn had come OF course, il is freight
and not passenger traffic that makes
up the bulk of profits, but the latter is
not unimpOrtant.
tCopyrignt 1920