Evening star., 1928-05-06
MORE COURAGE
IN TAKING OF BONDS
New Issues Go Better During
the Week-Oemand for
Securities Renewed.
al nisps,cA to The S,a,

EpeCsak AHSidtCA 10 ARF SNaf.
NEW YORK, May S.-More courage
IN the matter Of taking on bonds has
been exhibited this week This arises
out of the belief that the high point
in the seasons money market has beer
reached so far as it is affected by
commercial demands.
From now on until the middle OF
August the requirements Of business
normally decline, and rates for money
become easier. This year. however the
situation is complicated by the effort on
the part - the Federal Reserve Banks
to correc, The overSpecuiatiou in Secur-
itieS thrc2gh the means of higher dis
count les. So there may not be the
usual SEASONAL decline in either call or
time, money. .
Whatever the conditions may be,
there has certainly been a more aggreS-
Sive attitude shown toward listed and
unlisted bonds. The slump which con-
unue6 throughout March appears to
have reached its end toward the end
OF April. In the last few days there has
been quite q decided revival in demand
for bonds and with ii a STRENGTHENING
N prices, This Is more evident in the
higher coupon issues than in the low
interest oearing MORTGAGES. Some of the
former have advanced ! TO IL points
on comparatively small volume of
transactions. In this movement the
pubic utilities and the second grade
rails nave been prominent.
Depend on Special Situations.
The movements in other Sroups a,
domestic issues have been based almost
entirely on the development of special
situations bv which they are benefited.
IhiS was brought prominently to the
attentlon OF buyers of bonds of the
New York traction group the issues of
number Of small independent rail-
roads whose future may be improved
oy the tendency to consolidate then,
with some Of the larger systems and
also few industrial bonds that have
been helped by favorable trade develop
mertS. On the other hand. there are
securities that appear to have run their
course for the time being after long
period OF popularity, and few affected
by poor March quarter earnings.
The final figures Of April issues indi-
cate month OF greater activity than
had been forecast The total of new
stocks and bonds amounted to over
$SlS,00o, 600, which compared with
ST22 .000. 900 In March. but was below
the record month Of April 1927. when
1881, 100000 Of securities were quoted.
Nearly so per cent Of all of the bonds
offered IN April were public utilities
ano Sl09 600 900 of the total of S6a3. -
100000 bonds were Of foreign origin.
Volume of Bond Redemptions.
April was also a month prominent for
the volume of bond redemptions. Those
bonds redeemed before maturity aggre-
gated $240, ,O00. 900, compared with
$2IQoo0 D00 the month. previous and
with about S236 600 900 in April last
year. Here again the public utilities
represented the largest proportion OF
maturing bonds. which we're nearly
sl35,000, 900 Of the total called during
the month
There has been wide diversity in the
character Of the new offerings this
week. Foreign financing again has been
prominent. amounting TO about S70.-
100000. This includes the 10000 600
Mortgage Bank OF Chile per cent loan.
which raises the amount borrowed by
this institution from the United States
70 SO. 900 900; also $4,000 600 OF the
German Central Bank for Agriculture
IS. bringing the total issues Of this bank
on a dollar basis up 10 s135. 900 600. In
both Instances the return on the old
loans Of these banks Is still higher than
on the new ones Other foreign issues
were one Of $4,000 900 BY the depart
ment Of Akersaus. Norway, and 81. 600, :
ooe sy chemical corporation operating
II. the Ruhr district
Union Pacific Issue.
Next in Importance vas the s20, 900, :
900 4 per cent debenture issue Of the
Union Pacific Railroad, whose proceeds
are 10 be applied 70 the paymen. of the
conapanys s per cent gold bonds of
July !. Another vas the $1,000 600
issue Of Houston Gulf Gas Co. 6i2 per
cent sinking fund debentures, which
follows last weeks offering by this same
company Of siI O00 600 Of first mortgage
and collateral per cent bonds. The
demand for preferred stocks has been
reflected in several fairly large issues
Of this type Of security on q basis that
Is attractive 20 those who are not
satisfied with the present return on
bonds and are disinclined TO speculate
in common stocks.
The scope Of the market is gtill lin
tied by the rates for call money, which
have encouraged local and interior
banks 10 place their surplus funds In
the cali money market and 10 negotiate
short term loans between 5 and 5iz
per cent There has also been a large
AU1JU0k o. UuyIt1R ol oo31IuefclSl paper
since the rate for fairly good name
paper has advanced 70 434 per cent
Some OF the large institutions have been
taking profits on bonds and substituting
snort term Treasury certificates as The
Federal Reserve Banks have sold tbs
latter This phase Of the situation Il
likely 70 continue for some time.
UndepoSiied Libertys.
There have been suggestions recently
as TO what the Treasury Department
proposed 70 do with the undeposit2c
portion Of tae Third Liberty Loan
which natures next Fall. The money
market and the bond market are 10:
81 present favorable 70 any proposal on
the Eane terms as those recomm endeo
earlier in the year. Meanwhile the re-
cuction OF the public DEBT goes or
steadily.
On May this was si.093A7s.7l7
under that " year ago. and II ID
anticipated il Will be below SIT 500
900 900 by June 30 This compares
With S2s 59g. 600 600 At the peak Of The
postwar period.
RIGHTS ARE OFFERED.