Evening star., 1927-11-20
BOND LIST STRONG
:. DURING THE WEEK
Rail and Government Issues
in Heavy Demand-Re-
turn Declining.
BY BYRON SELLER.

bN BltON SELLER.
Special Dispatch to The star
NEW YORK. November 1S.-The
bond market has been very strong
again this week According 10 some
compilations the average prices is at
the highest for all time; according Ia
others it is the highest in quarter
Of century. At any rate 1t seems
impossible to satisfy the investment
appetite for securities of the highest
grade
This situation has been reflected
principally in two classes of bonds
United States Government obligations
and seasoned underlying railroad
issues. Every Treasury bond. in
coupon form. has this week sold at
the highest of record. Unlike the
Iibertys the Treasury issues are of
comparatively long term and SO at
tractlve to institutions and corpora
tions desiring permanent investment.
The buying has been response also
to the success of the operation result
ing in the retirement of the Second
Liberty Loan, by that much decreas-
ing the supply of Government secur-
titles.
Small Holders Turn Bonds In.
bonds of the second loan turned in for
redemption has eNcc.ded the early
estimates. showing that even the
small holders are becoming more edu-
Gated in the care of their money.
The same factor is responsible. in
part a least. for the strength in the
railroad bonds. AS with Government
securities, the supply is strictly linn
tied. Most of the low coupon bonds
were put out originally before the
World War; they are secured on prop.
erty built at prewar prices and many
of them are now closed mortgages
This type of bond appeals to the con,
servative buyer forced TO find sub,
stitute for Governments. The trend
of the times, too, is toward refunding
issues secured by general mortgages.
There are not likely TO be any more
of these desirable divisional loans.
It. does not take much buying. then,
to put prices up.
AS the quotation for the high-grade
Issues has adva anced. middle and sec
Ond grade issues have improved in
sympathy Bonds of the type of Mis-
souri, Pacific general As. which sold
this week at a record high are illus
trationS. IT has come to pass that
any domestic bond obtainable on a 6
per cent basis is subjected to close
scrutiny, and anything giving a high
err return than per cent is regarded
with a certain degree of suspicion.
AS a matter of fact. except in bonds
selling around the callable price, SIG
per cent is a high return. Perhaps in
strictly investment issues the largest
yields are now to be had in oil bonds.
Brokers' Loans High.
All this has happened regardless of
the fact that brokers' loans as tabu-
lated by the Federal Reserve this
week set a new high record. 1t has
happened regardless of the fact that
the reserve ratio of the Federal Re-
serve banks is down to the lowest of
the year. 1t is not as low as the mimi
mum of 1924. 1925 or 1926. in all Of
which years the low point was touch
ed in late December. but it is off over
two points from last week and over
three points from the same date
year ago. 1t has happened also regard
less of the strength in sterling eX-
change with it's hint of impending
gold exports. Brazil. Poland and Cana
da are already calling on New York
for gold and exports to Holland would
not be surprising. The point is. how
ever. that SO long as call and time
money remain as easy as at present,
other signs go unheeded
New bond offerings are down some
what from those of last week. The re-
spective totals are Ss6,060,1s0. com
nared with S1o6. .O56, 900. In this week
of 1926 only s54 .655 ,000 were sold.
A good deal of the financing of the
week has been IN the form of stock
common or preferred The most mn
portant investment offering was sto..
ono 600 of Electric Bond and Share
DER cent preferred. This was priced
at 100 to WELD $50 per cent. IL IS IN
teresting to compare prices at which
successiye offerings of the preferred
stock of this company have been put
upon the market.
Decline in Returns.
Always rated as SOUND invest
n,ont. the fluctuations picture the
steady decline in return TO tne IN
yesior which has accompanied the al.
vance in the preferred stock as well
as the bond market. The figures are
are follows: