Evening star., 1926-10-14
FASHIONS IN BONDS
ARE EVER CHANGING
Foreign Issues to Attract At
tention Is Forecasting
Bankers.
BY j. c. ROYLE.
Special Dispatch to The Star.

QUEBEC, October 14.-Fashions in
bonds change as regularly as fash
ions in clothes. The investment bank
erS now in convention here are the
haute Couture-the ultimate author
ity-in investment securities, as the
Partisan dresSmakers are in frockS.
According to the concenSuS of the
delegates here, foreign issues will be
very popular, while United States mu-
nicipal securities will be less eagerly
sought and provided in less volume.
The total of municipal offerings,
both long and short term, up to the
ssTSt of this month, amounted to 81.
521 .642 1872, while the volume of all do
mestic bonds issued in that time
amounted to S5,065 ,372, ,187. The rail-
road and miscellaneous industrial Of
ferings accounted for S3,543, 3,774,175 of
this
Rails to Be Popular.
Railroad issues, both new and old
and whether refunding or not, seem
likely to be popular. This comes as a
direct reward of service. The carriers
have extended service to shippers more
nearly perfect than ever before in the
history of transportation. Manufac-
turerS have ceased to complain of
hand tomouth" buying They are
realizing that as a result of the effici-
ency of the railroad, retailers can and
will buy for immediate delivery with
safety, and that as great a volume OF
business is being done under the new
system as when merchants laid in un-
Wieldly stocks three months in ad-
vance and paid for them more slowly.
The manufacturers are getting an
equal amount of money, getting it
more promptly, and are in a position
to do business without tying up as
much capital as under the old system.
Railroads have prOSpered and new
rail financing undoubtedly will find a
ready response from investors. On the
other hand, many eminent authorities
here believe that much of the deman nd
for funds from municipalities has been
satisfied and that the volume of mu-
nicipal bonds presented to the pubic
In the next six months will show a
decline. This is not the case in the
South. County, State and municipal
financing along the Gulf of Mexico is
likely to be heavy, and the way in
which recent issues have been snapped
up indicates there will be ample funds
to meet all requirements.
Consolidation of Power Firms.
A dozen schemes for the amalgama-
tton of electric power and public utility
this convention began. The object is
obvious. There has been a great de-
mand for power, not only for lighting,
but for domestic and industrial uses.
This has been accompanied by de-
mand for reduced rates. To meet these
two demands the trend toward con-
Solidation and cutting of overhead eX-
pense has been inevitable, and this is
being accomplished through amalga-
nation.
The bankers here do not resent pub
lie utility regulation. What they want
is a definite understanding on which
they can proceed with programs of
expansion. That is the reason the
committee on giant power turned down
-nc program of Gov. Pinchot of Penn
sylVania so decisively. Lower rates
but more customers, especially farm
customers. is a war cry heard at every
session OF this convention.
Government Financing.
Government financing has ceased to
worry bond men. The United States
Treasury issued $494 $3.50 in 33a per
cent bonds on March IS. No financing
was necessary June Is. The Septem-
ber ) issue was 1878, 500 500 of gle
per cent certificates. Under the quar-
terly financing program a new issue
will be due December Is, but on the
basis of tax receipts received Septem-
her Is and payments of foreign obliga
tions maturing. obligations will be al
most equaled. So unless the Treasury
chooses to anticipate some 1927 ma
turtles 1t IS likely that Government
financing for December will not exceed
$3.50, 200, 900.
Foreign securities will be more close
ly guarded than ever before. That is,
American investors will have a greater
knowledge of the security behind the
issues presented to them. Ray Nor
ris, president of the Bankers ASsocia
tion, said today that the committee on
foreign securities "has taken natural
and sound steps toward creating a
central and impartial bureau of serv
ice and information for the benefit of
investor who want to know about
foreign bonds"
No check is anticipated by men who
handle realty bonds in the volume of
Tor, 20 10. vol