Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-08-01
BOND PRICES GAIN
STABILITY IN WEEK
Selling Comes to an End.
I Institutions Cautiously
Filling Needs.
BY GEORGE t. HUGHES.

NEW YORK, July 31.-The week
In the investment market was marx
ed by a stabilizing of bond prices
after the reaction earlier in the
month. There were no striking al
vances. but, on the other mana, the
selling which had been so eHectlNe
in depressing quotations came TO an
end. \ Financial institutions appar'
emily had reached the conclusion that
,,,Jces were as low as they were
likely to so for some time and SC
cautiously set about nlling theH
needs.
There was no change in the money
situation. Call funds were remark
ably easy up to the very close OF the
week, when the month-end require.
ments brought about some calling oil
loans and a stiffening of the rate
This, however, was only an incident
1t could not even be ascr1bed 70 tne
wild speculation in stocks, which
more than is usually the case. was
financed without undue demands
upon the banks.
Time Money Firm.
Time money continued firm just as
IL had been when the reaction ~
bonds commenced, but the erect mao
worn off and bonds steamed. Ine
weekly statement of the Federal re
servo hanks showed only a moderate
increase in INQUIRY for funds for
commercial purposes. 1t is reason
able to expect, if the Fall trade turns
ont to be as good as now anticipated
that money will be a little higher
h,,t that is not necessarily adverse to
bonds. Commodity prices remain
about the same, advances ana ue
clines neutIalizing one another
Trading fell off in volume as at
tention was diverted to stocks. ms
has been the rule throughout the
wear. It was noticeable this week
nevertheless, that prices were no'
Influenced unfayorably when deanns
slackened. There was simply an an
sence of that speculative buying
which Is generally part OF the Day
to-day transactions in bonds as wei
as stocks.
lust at the close of the week there
we're signs of increased interest in
speculative railroad bonds. The field
for this sort of operation is mucn
narrower than it was a year ago
Steady improvement in earnings has
lifted securities of many roads out Oh
the speculative class into the invest
ment list There are still ~ number
Of income and adjustment bonds, or
which interest payments are con
tingent charge. which offer oppQItu
mites for market price appreciation
The reason that these are not as &C
tive as they were last Winter is be
cause the stocks appear so much
more attractive speculatively.
Statements Exceed Expectations.
However. that may be. income state
mentS of the railroads as whole
have exceeded expectations, and &c
that extent higher prices for then
securities are justified. 1t is estimated
that the aggregate earnings OF class
roads for June will establish q
new record, not only this year. bul
for that month for all time IL the
present calculations prove correc'
the carriers as a whole VIII coInt
near earning at an annual rate OF I
ner cent on valuation. There are
exceptions here and there, but they
are not important. Even the North
western roads, which have long beer
the weak spots III the railroad sNs
tenn. have made striking gains.
New financing has not been in par
tioularly large volume Inc week
bond offerings amount to about SSS
600 .OOO compared with nearly Via,
600 900 the week before and o5.SoO
600 in the corresponding Week VI
Ieo5 Most of the new issues nave
been well absorbed. In fact, all dur
ing the recent reaction new offerings
found a ready market. and there are
lass than the usual number OF undl
pested issues threatening the price
level. ANYTHING with conversion
privilege has been in specially sooC
demand.
Thare have been so many Instances
In the last few years OF large proillE
accruing to buyers of bonds carryht
calls on stocks that the speculative
annette for all such has been Whetteo
Tbera Is some danger along this line
for corporations do not offer bond'
carving conversion privileges with
out putting a price Con that oppor
t,Initv. and whenever there is chance
of speculative profit there is also
chance of speculative loss.
Foreign List Drags.
The foreign list has dragged alont
all the week without much change
Prices have hung around the hlghs
the recovery which set IN altel
France had made start at stralgnt
eninp out her tangled finances. Or
the other hand. they have not gone
higher because investors are waiting
to see whether the Poincare cabine
viii succeed in it's efforts. More o.
less. too. the course of French bond
has a sympathetic effect upon othe'
European securities.
The outstanding exception is tn
German per cent international loan
the dollar issue of which went to
new high record on the stock eS
change during the week. so far In
vestors have not been disturbed b,
the agitation on the other side abou
conclusion of war debts. Anyway
that is not factor that affects Souti
American obligations, which nav
A.