Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-02-13
INVESTMENT BOND
| DEMAND IS GOOD
Moderate Money Rates Have
f: Sustaining Effect on Mar
ket During Week.
srecial pispatch 10 The star.

Special Dispatch TO The star.
NEW YORK, February 12.-Con
tinued good demand for bonds. mod
crate money rates and wide variet,
of new issues combined to sustain in
terest in the investment market thi!
week
So far as the market for old bonds
was concerned, dealings were on
somewhat smaller scale and price
changes were irregular. Offerings Of
new bonds tended to keep prices or
an even keel, for the reason that the
new issues covered almost every
variety Of desirable bonds. which were
available in round lots at one price
II was possible. for instance, for
large investor to purchase large
blocks of Chicago and North Western
Railway first and refunding Ala per
cent bonds at a price to yield 4.a5 per
cent. Had the same investor gone
into the market and attempted to pur
chase even a small lot of old bonds OF
equally good grade he would have
been forced TO buy his bonds one at a
time and to bid prices up.
Practically Deadlocked.
It was that sort Of thing that helped
10 keep activity in good railroad bonds
al a minimtfn this week. Other rea
sons were. that buyer and seller are
more or fess deadlocked. as they often
have heen at previous stages of the
rise In the bond market. Buyers re-
fused to climb for bonds while sellers
held them for full prices.
Most of the trading was In railroad
bonds of the semi-speculative grade.
A good deal of activity was witnessed
In such bonds as Erie convertible
series D-4s, Western Maryland As and
issues of the Chicago, Milwaukee and
ST. Paul Railway. The movement was
in sympathy with the wild specula
ton in the cats and dogs" Of the rail-
road stock list. To certain extent
the activity in the speculative
railroad bonds reflected the investment
policy of combing the market for high
yield issues of the better grades. Ger
tain buyers of bonds refuse TO follow
prices up beyond certain limit, turn
Ing instead to other issues which are
q little behind the market.
FOREIGN bonds We're quiet after the
collapse of prices last week. The
speculative shake-out in that depart.
ment, which resulted In a decline of
/ to as much as points in prices OF
active issues, was a needed corrective
to an overbought position. Prices of
hut for the time being the edge is of
the demand. On the other hand. GER
tain other fore gn issues. particularly
those of Central European countries,
were in good request, notably Czecho-
siovak 7ias and SIS and Polish SIS and
Prague TVS, which had been neglected
for some time.
Government Bonds Inactive.
Very little activity was noted in
United States Government bonds, al
though the undertone of the market
here was firm. A fair demand existed
for long-term issues. based apparently
on the feeling that no new iong-term
Government issue would be brought
out this Spring. The Treasury Ans,
or so-called .Mellons,' and the Treas
ury As were the active issues. Traders
In United States Government bonds
talked OF the poss. bility of cut In
the Federal Reserve Bank rate and
were waiting for one before commit.
ting themselves too heavily In the
market. On the other hand, In nigh
banking quarters such a cut is re-
garded as unlikely at this time.
As already said. the market Tor new
issues was characterized by the
variety of bonds offered for public
subscription. The volume of offerings
VAS much smaller than the record
breaking total brought out the pre-
vious week, but was large in COM
parison with the average week. The
principal issue, in point of size at
least, was one of $4,000 900 aluminium
Co. of America per cent sinking
fund debenture bonds. which We're
quickly sold at par. Second largest
in the list was an issue OF $4,000, 900
Associated Gas and Electric Co. 5h
per cent convertible debenture bonds.
That issue was reported oversubscrib-
"a. The Chicago and North Western
Railway offering of s2o,572.ooo first
and refunding mortgage Az per cent
bonds already has been mentioned. 1t,
of course. was snapped right up. be-
cause it afforded investors an unusual
opportunity to buy round lots of high
grade railroad bonds at one price.