Evening star., 1926-09-12
INTEREST CENTERS
|NITAL|AN BONDS
Other Foreign Issues Draw
Attention, Notably French
and German.
BL BYRON SELLER.
specjal Dispatch TO The star.

BL BYRON SELLER.
Special Dispatch TO The star.
NEW YORK, September 1.-THE
week in the investment market has
been characterized by a remarkable
renewal of interest in foreign bonds,
accompanied by rising prices. The
result has been that the average
quotation for these issues traded on
the New York Stock Exchange Is at
new high point, not only for this
year, but since dealings in these
loans We're initiated on any consider
able scale.
Interest centered around the obli-
cations of italy, France and Ger
many. Buying appeared in the dollar
bonds of other countries, and there
were some advances. but they were
not as conspicuous As IN III" case
of the three mentioned.
Reasons Tor this mark }of confluence
in foreign investments ARE various.
Nm the first place the investor who rs
willing 10 take some rtSk III return
for an attractive yield has been
forced to turn to the foreign held.
because the price OF domestic bonds
has reached 50 high a level. THIS IS
the broad and sustaining influence
for values in foreign dollar bonds.
Then there have been tangible de
yelopmeutS abroad. encouraging the
buyers of foreign bonds. In the ilst
place the Italian nefiation measures
have been thJ object ot lnuch iaN
orable comment. Quotations ~ the
market for Italian lire tell the same
story. So il WAS not surprising that
the most Spectacular of the opera
tions in fureigu bonds this week
should have been in connection WIN
the Italian government : per 'th'
dollar loan. ,
For a long time these bonds h"d
been selling below the Obligations oi
France Belgium and Germany al
with the same coupon rate ana ol ap-
pl,uXimately the same maturity. They
had had an unfortunate history. or
fered in December. 1923. they We're
the last to be marketed of all the four
continental European : per cent loal"
and distribution was not as thorough
AS in the case of the other lnfe%.
When the syndicate was dissolved IN
Nav, 1926. the market price had an
abrnpt break of about } points ana
until the last 10 days little progress
toward recovery was made. rms
week however. there was a sudden
change IN sentiment. and on Friday,
nndcr IN extremely large turnover,
the quotation advanced to the best
since a free market in the bonds was
established.
Rise in French Issues.
Along with this improvement in
italian bonds was Il further rise IN
French issues Two OF the direct Oh
legations of the central government
made new highs for the year ana
practically all Of the French railway
bonds did the same.
Inasmuch as the French govern,
ment controls the railways. bonds "l
tha latter have always moved more
or less with other French securlle-'.
Perhaps, too. the report from lne
other side that a new loan was TO be
axtende dto the French railways
by a group of bankers techill-
cally British. but actually IN,
vastinc American capital. had
something 10 do With the matter; n
der the policy laid down by NaSililS
ton. the bankers of the United STATES
cannot maxi. loans direct 10 France OF
.o Franch enterpriseS until the war
deht refunding agreement has beeh
ratified. Still. in indirect ways. Amer
Jca N funds could he used through Lon
6on There has been no progress TO-
ward placing French finances on d
enId ha asis. but at least the DOWNWARD
movement of the franc has peeh ar
rested temporarily. when IL "llEtl.
fact that has doubtless proved helplu'
10 tha market for French bonds.
rurninpr 10 Germany. there is more
cause for satisfaction than in elther
Ttal,- or France. Buying OF German
luords has not been SO conspicuous
h,,t they. too. have been we'll takel'
II must be remembered that C'eililal Il
dollar loans sell on a lower ylelu pas
than those Of the other two countries
and do not offer quite so great a spec
Native incentive. For that Yer! fea-
son they should be more ATTRACTIVE ~
the buver whose main purpose Is con
tInuitv of income and not apprecla'
tion in his principal.
Treasury Issue Marketing.
In the domestic market the most
,otarastinp DEVELOPMENT was the
heavy. oversubScription to the Treas
u,~v's Offering of S350,000,0O0 certln-
cafes of indebtedness on 3f2. pc.
oan+ basis The reception accorded
this financing on terms so 1aVoraole
70 the Government supports the arSu-
ment that the Treasury VIII be aoie
to borrow at progressively lower rates
as time goes on. no matter What lhe
course of the rest of the lhNes'hleill
market.
There is. however. no sign Of any
weakening in the demand for prime
corporation securities. prosperous
nublic utilities have again demonstra-
ted their ability to sell first mortgage
bonds at prices to net the buyer less
than per cent during the week. Inc
market for seasoned issues has been
steady. While il has not enjoyed any
innortant advance. on the other hand.
Il has not been disturbed by what
hardening Of money has occurred.
The weekly statement of the Fed
eral Reserve bank reveals nothing 10
weaken the investment situation. The
reserve ratio is practically the same
as in the preceding week and nearly
a point above what il wai' in the same
week a year ago Undoubtedly there
has been some selling of bonds by
member banks. but il has been readily
absorbed.
,Copvright 1926