Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-12-31

FROM Concentrated PFPgs As4oci7tIOn--An-
nuaI Review.
BY CHARLES r. SPEARE.
n yEW YORK, December 31.-In
M contrast with the stock
market ,t the rise in n bond w pr,Ges
the average upward swing OF
stocks covered a range Of 30 points
between the low OF January and the
December level. that of bonds was
trifie over 3I2 points in the domestic
list and less than points in foreign
issues. However, the market for in
vestment securities was one OF the
most notable in years. duplicating in
many respects the features OF the
last great period OF abundant capital
and low interest rates, % years ago,
when first mortgage per cent raii-
road bonds sold at substantia pre-
miums, municipal bonds touched
31a per cent basis and the old per
cent United States Governments ex-
ceeded by many points the price at
which the present United States
Treasury Az per cent issue Is now
selling.
This wears advance was a continual
ton Of the movement toward higher
range in bonds that really began in
1924. In 1922 domestic issues regis
tered an average price Of 40. In 1928
there was reaction from the high
level of the wear. II was not until
the year following. and coincident
with the beginning of broader and
stronger stock market. that the
strength of all fixedinterest ohliga'
tons began 10 assert itself. From
that time on there has been a steady
Improvement in prices and total
avera &c gain between January. 1874.
and December. 1927. Of is points in
domestic issues and Of about points
in foreign dollar bonds.
4 Good Year for Borrowers.
Within the 12-month period now
closing. great many developments
have taken place that emphasize the
changed conditions more than does
the price advance itself. Among them
are the rise in numerous Junior rank
! ing railroad and public utility BONDS
/ 10 A price level approximatlng mat
held in the two years preceding by
FIRST mortgage bonds. This was a
response not only to the demand by
the investing public for an income
return unsatistied by the senior
7 issues. but To the greatly improved
/ credit standing of the companies
whose bonds have appreciated IN
7 value. Another outstanding trend
has been that toward "A lower coupon
rate for new issues, or those repre-
senting new capital entirely. ana on
bonds which were sold 10 replace
maturing obligations as we'll as ooii'
cations that had been called IN al
vance To their maturity.
No wear in the Countrys hiStotS
{ has Witnessed such an active refund
ing program as 1927. IL is estimated
that during the J. months over $l.aoo.'
600 400 of corporation bonds and notes
have been called for payment before
/ they were legally due. The 10
per cent issues that were competed
( bv the stringent times following the
war have largely been redeemed by
/ American corporations and replaced
J hv longIerin bonds, carrying cou
non rate of per cent in many in
/ stances. but with the popular coupon
| in the second half of 1897 one oil
Az per cent.
/ IL has been a year OF opportunity
/ for the borrower. II he has beer
! fnreha nied he has been able IN put
! his house in order on a basis ot
cheap money, and Ia finance long
term commitments at rate that
will help greatly in carrying him
through the later periods Of bushes.
depression and financial stress.