Evening star., 1926-10-03
BONDS ARE HEAVY
WITH MONEY FIRM
Deadlock More or Less. Ex-
lSting in Security Market
at Present.
BY BYRON SELLER.

bpecial Dispatch TO The star.
NEW YORK. October Firm
money cast a shadow over the bond
market this week. with the result that
prices were rather heavy and trading
was dull.
More or less of price deadlock
exists al present. Sellers refuse to
make concessions asked by buyers.
The latter are equally stubborn in
declining to pay asked prices. AS an
outcome, the actual turnover in the
market for outsta nding issues Is small
and has been for some time.
The level Of quotations is admittedly
high, although it averages about q
of a point below the peak reached
last June. That high level in itself
constitutes a barrier to activity pend
Ing clearing up of the money situation.
Six Per Cent Call Money.
Call money went as high as 6 per
cent this week, and time money,
which is better standard for meas
urement of bond prices, was quoted
as high as 5A per cent, a new maxi
mum for fixed date money this year.
The firmness of money was not an
abnormal development. 1t is usual
for rates to Stiffen over October J..
However. it also is normal for money
rates to ease up after October ! set
Elements are completed. and the
market should ease up very soon,
although il also is likely To harden ny
the end Of the month.
Wall Street is talking of the posi-
hiity Of an advance in the Federal Fte-
serve Bank rates before the end of the
year 1t is no secret "that some bank
erS expect such a development. 1hal
in nutSbSell is the reason the bond
market is sluggish and buyers are
coy. A higher bank rate would mean
also a higher level of interest rates
generally, which would react against
bonds until the seasonal tightness OF
money disappears.
Buying by Institutions.
OF course a certain amount of buy
ing is done all of the time by instltu-
tions Insurance companies as a rule
invest their income promptly. They
have found that in the long run II
does not pay to wait for reactions IN
bond prices. over period of years
prices have habit of averaging up.
But institutional buying has not been
active. Savings banks also buy when
ever they have surplus funds. But
the savings banks have been going IN
more for real estate mortgages than
corporation bonds.
Railroad bonds were inclined 10
droop this week. Many of the hlSh-
grade and second grade issues lost
little ground. However, there were
exceptions. st. Louis and San Fran.
cisco income 6S were active around
a6 These bonds sold Eek" interest on
October |. and there was large IN
vestment demand on the theory that
they would recover after interest came
off. Chicago, Rock Island and Pacific
bonds also were pretty well absorbed
because of the company'S record FOR
earnings this year. SeabOard JUNIOR
bonds were we'll taken on the road S
showing for the first eight months.
Third Avenue Adjustments.
In the local traction group the fea-
ture was quiet buying of Third Ave
nue. adjustment 5s and refunding As
The company'S report for the last
two months showed good surplus,
compared with a deficit for the CORE
spending period of last year.
In the industrial division demand
ran to sugar and copper bonds, be-
cause prices of both sugar and cop
per have been stronger with the
prospect of better earnings for the
companies concerned.
The demand for foreign bonds.
which was so good recently, petered
out with the result lildl IeteSSloilS
were the rule. Much of the buying
in the last few weeks had come from
abroad. where bankers are closer to
the scene and are in a better position
than our investors to ascertain the
true situation. However, that foreign
demand has been filed for the time
being
New financing this week reached
a volume in excess of $104.000,00O.
II included a broad variety of foreign
issues and domestic industrial, pub
lie utility, municipal and other bonds.
The feature of the market for new
bonds was the paucity of really high
grade securities. The scarcity of
bonds of the best rating has been a
characteristic of the market for
some time. and accounts for big de-
mand for high grade new bonds when
ever they are put on the market.
Argentine Offering Largest.
The largest single piece of new
financing was an offering of $16.900-
900 Argentine government 34-year s
per cent bonds. They were sold at
9SL to WELD 6.10 per cent. At the
same time it was announced by the
bankers for Argentina that they had
marketed privately $4,000. 900 of six
months Argentine government treas
ury notes on 5l4 per cent basis. The
bonds were a public offering.
The Argentine government bond
offering was the largest piece of South
American financing arranged in the
New York market this year.
CHICAGO LIVE STOCK MARKET
CHICAGO, October CP) UNITED