Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-02-14
BONDS ARE HIGHEST
FOR NINE YEARS
Two Liberty Issues Attract
Attention-Good Gains in
i Foreign Group.
BY GEORGE T. HUGHES.

Special Dispatch to The Star.
NEW YORK, February 13.-Onct
more this week the average price OF
a selected list of typical bonds, botl
domestic and foreign, listed on the
New York Stock Exchange, has at
tanned new high level for nine
Years The steady rate OF the adj
vance has been very impressive. Thert
has been practically no setback ano
all grades have participated more OF
less in the improvement.
The United States Government
bonds, the two issues which reached
new high levels for the year, We're the
taxexempt Liberty 3l2s and the
Treasury AIS. Buying of the Tor
ner contradictS the theory that tan
reduction would injure the market fol
: nontaxable securities, municipal and
State obligations as we'll as the LAD
erty 3Ias. Evidently the price has
discounted the expected cut in taxes
some time ago. For another reason
the demand for the Treasury Has was
interesting. This is the Government
bond of most distant maturity.
Special Market Factors.
Long term bonds are generally
bought only by those who have con-
fidence in the money outlook. Treas
ury As are the Government issue with
the longest period to run next to the
AIS, and it is significant that these
two are nearer to their record highs
for all time than any other United
States Government obligation.
one factor which helps support the
market for Liberties and Treasury Is
sues is the slowly lessening supply
brought about by the operation Of the
sinkink funds. Trading in all these
issues has fallen off sharply during the
past year. Taking the period from
January l to February 10. dealing in
Government bonds on the New York
stock Exchange for 1926 was $37, 487.
500 compared with $50. 227,950 in 1925,
and with S12S,9l0,S25 for 1924. The
figures for trading over the counter
are not available, but there is no
doubt they would show the same
trend. Speculation in Government
bonds is almost nonexistant. the only
buyers being real investors who, when
they enter the market, find a steadily
diminishing amount offered for sale.
Gains i'm Foreign Group.
In no part of the list have the gains
been more uniform than in the for
eigu group. Compared with those
j, ohtainable on domestic securities the
Yields on foreign bonds are extraor-
binary large. Excluding Canada
which is not regarded as foreign for
this purpose-Great Britain and
Switzerland, the Yields on listed Euro
pean issues range from SIG to q per
cent on the obligations of northern
countries to Sla and 9 per cent on
those of newly organized nations in
eastern and southeastern Europe.
The range in South America issues
IS from 8 per cent for Argentine
bonds to 8 per cent and over for GER
tain Brazilian issues. japanese bonds
return around Z per cent. In almost
every case issues of corporations To-
Gated in foreign countries give high
or return than the bonds of the gov
ernments of those countries. and the
number of foreign corporation bonds
dealt in on the American market is
being constantly augmented.
Prejudice Is Overcome.
The temptation these attractive re-
turns present is gradually overcom-
ing the long standing prejudice
against foreign investments and the
fear of adverse political develop
ments abroad New foreign issues,
too, are meeting with q better recep,
ton.
The way in which French bonds
have held up against the weakness in
franc exchange is still the wonder of
traders. The recovery in Brazilian
obligations despite the fact that new
Brazilian financing tends toward Lon
don rather than New York was
another outSta nding feature.