Evening star., 1927-03-13
MELLON FINANCING
GRIPS ATTENTION
Six Treasury Bond Issues
Hit New High Marks During
Weeks Transactions.
BY GEORGE F. HUGHES.

Special Dispatch to The star
NEW YORK, March l2.-Announce
ment of the Governments financing
for the March quarter was the allah
aOrbing topic of discussion in invest
nent quarters this week. Wall Street
instantly placed the stamp OF its ap-
proval on the program outlined by
Secretary Mellon whose personal pres
tige as master of finance was, If
possible, further enhanced by his lat
est plan.
All division of the bond market, on
the Stock Exchange and over the
counter, reflected in strong prices the
optimism generated by the funding
operation which Mr.. Mellon outlined.
Government securities, as was to he
expected. led the market. Dealings in
them were very active. They resulted
in sharp advances in the long-term
issues. Buying was inspired by sat
isfaction with the terms of the new
fingncing.
Liberty Bonds Climb.
New high record prices were
reached by no less than five distinct
Liberty and Treasury bonds, the first
AIS, the fourth 4 as. the Treasury
4i4s, the Treasury As and the Treasury
334s. Second Liberty 4As. the issue
which is being refunded, also were
very active. but they moved within
a narrow orbit fixed by the terms of
the new financing.
The dealings indicated that an eX-
tensive switch was in progress both
ways. Many holders of the second
4l4s were selling their bonds and buy
ing into the long.term issues. The
bonds they sold were snapped UP by
other investors, mainly banks, which
prefer Treasury short.term bonds and
were buying the second Az s and then
offering them in exchange for the new
Treasury 5& per cent notes.
Other Issues Improve.
AS all classes of bonds are more or
less interrelated, the general market
could not help responding to the rise
in Government issues. After the first
flush of excitement had Subsided, the
Street witnessed a better inquiry for
corporation securities than it had ex-
perienced in several weeks. That was
because the rise in Government
bonds had gone so far that high-grade
corporation issues were out of line and
began to look attractive again. Over
the counter there was a perceptible
Improvement in the market for State
and municipal bonds for the same rea-
son.
Foreign bonds were fairly active.
The inquiry for Italian bonds was
good. Polish government and Bra
lillian bonds also were wanted. A
number of big foreign new loans are
under negotiation, but none is ready
for immediate offering.
Mellon Plan Unique.
=.
unique in that it comprises two dis
tinet types of securities. The finan-
cial community had expected the
usual quarterly financing to provide
for maturing certificates. 1t had not
looked for a huge refunding operation
involving the possible exchange of
more than SO 600, 100000 of second
Liberty AIS for new issue of s.
year 81 per cent notes. Altogether
the plan involves turnover of more
than seven billion dollars, setting a
record for Government finance.
The customary quarterly issue of
certificates of Indebtedness to take UP
a maturing issue is of interest chiefly
because ii will result in a further cur.
tailment of $500, ,000,000 in the public
debt, as predicted last week. That
operation is completely overshadowed,
however, by the offer of 31a per cent
notes in exchange for outstanding
Liberty Ans, That offer by Secre.
tary Mellon is another master stroke.
BY the exchange the Treasury will
save approximately $23 900, 900 an.
nually in interest charges. 1t also
will be able TO defer for at least three
years and possibly FIVE years the ar
rangement of a long-term refunding
operation for the Liberty 4 Il per cent
bonds.
New corporation offerings for public
subscription this week were stepped
up to total of S136. 900 900 in the
week. Since the first of the year new
issues have amounted to S1,41S, 800.
0no.
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