Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-07-25
WHOLE BONDL|ST
DULL AND HEAVY
Plenty of Money Is in Sight,
However, for investment
Purposes.
BY GEORGE t. HUGHES.

BY GEORGE T. HUGHES.
Special Dispatch to The Star.
NEW YORK, July 24-The bond
market during the past week has
been dull and heavy. One of the rea.
sons for this has been the fact that
safety is the very essence of the in
have reflected the fact that France
was going through a. financial crisis,
and the large interests with money to
invest were far more willing to walt
the course of events and be sure than
to rush in and be sorry.
Another factor in the situation was
the strength In time money. There
are indications that there will be an
abundance of capital for investment
purposes for some time to come. But
this is the season of the year when
bankers have to expect Withdrawals
of funds by the banks in the outside
sections for crop moving and other
purposes. In addition, the Specuia-
tive demands from stock and COM
modify market sources have been
extremely heavy.
Statement of Sims.
Some idea of the amount of capital
available for investment in the United
States can be cleaned from the fol-
lowing statement of r. N Sims, Sec
rotary treasurer of the National Asso-
citation OF Supervisors of State Banks:
"On April IL, 1926, there were IN
the United States a total Of 2S,2S9
banks, of which 20,2SS were State
banks and 5000 National banks, and
in round numbers total capital sur
plus and undivided profits Of $7,39S,-
01S,9u3, total deposits Of $54 ,291, 1888
and total resources of $63, 9se, 452, $50.
Total deposits of all banks were
S3,794,626,031 above the previous high
record of April g., 1925, and total re-
sources So, 4S7, 6o7, APT above the re-
sources of. that date"
with capital, deposits and total re-
souces OF our banks larger than ever
before, there seems little doubt thsA
the cash available for legitimate, con-
sentative investment purposes is sum-
cient to provide all capital necessary
for every legitimate requirement OF
financing or expansion. Since 1913
the number of banks has decreased
by 524, while total resources have in
creased $17,234,237 ,054 or SO per cent.
Ample Money to Invest.
These figures sustain the conteYf-
ton that there will be ample money
for investment purposes for some time
to come and this in itself is q safe
guard OF the investment market. For
the bond market at present is to a
large extent independent OF current
profits. The securities listed under
the investment heading are so thor
oughly protected in most cases that
they may be deemed safe despite the
ordinary fluctuations of profit margins
or Of the rise and fall of the stocks
of the corporation involved.
They are not Independent, however,
Of the time money trend, and 1t is
this Tightening Of the money market
which has largely dominated the
course Of bond prices during the cur
rent week. This fact was reflected
in the comparative immunity to the
heavy trend enjoyed by the so-called
savings bank investment securities Of
the to AZ per cent class. The bond
yielding to 81 per cent on the con-
trary reflected the Tightening Of time
money.
Enthusiastically there has been some
unloading but this has not appreciably
affected the volume of investment
funds, for idle money is worse in the
investors eyes than an Idle clerk
The speculative bonds during the
week have shown weakness in prac-
tically all classes.
The refusal of the Interstate Com
nerce Commission to sanction rate in.
creases for some Of the Western roads
was not a decisive factor in the stu
alton, since the class / carriers are
in a substantially sound position and
the differential in present and possible
rate was not sufficient to affect Is
sues thoroughly protected by property
values.
French Bonds Fall.
French bonds fell off sharply, as
was to be expected in view Of the
events on the other side of the Allan
tic. But 1t was noticeable that they
did not drop to extreme low figures ex-
cept in the case of some Of the pro-
vincial issues.
A feeling was evident that while
there might be and probably would
be a period of uncertainty for a time,
the French dollar bonds sooner or
later would have to be taken care of,
no matter what government func-
toned in Paris It is recognized that
France must have foreign credits.
There is at present no source so
promising as America, and the finan-
eial powers of France are bound to
recognize that fact.
The stock market, too, has had its
influence on investment security
prices For a time the chance for
quick profits in stocks has overshad-
owed the slower and safer yield from
bonds. Some funds undoubtedly have
been diverted to the stock side since
the opportunities for further advances
In bond prices were of minor proper
lions. There is no sign of sharp
increase in commodity prices, or other
factors which would endanger the
long term strength of the investment
market.
az. Friendly to New Issues.
The week was characterized by a
volume of investment issues and
these were received both by dealers
tvTho have no intention of holding
thein) and by ultimate investors with
marked friendliness.
This was especially true of the
utility issues. The widespread distri'
button of utility securities has had an
undoubted psychological effect, and
the uses of electricity are increasing
SO rapidly that the companies are
able to maintain earnings and at the
same time in some cases reduce rates
Another feature is the increased pop
ularity of holding companies per.
hitting group operation
This gives diversification in addition
to the advantages OF joint manage.
me1lt and financing