Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-15
BOND MEN HOPEFUL
OF BETTER TIMES
Increased Interest in Divi-
dend-Paying Securities En-
CourageS Bankers.
BY CHARLES F. sPEARE
an pispatch to the star.

Special Dispatch to the Star.
QUEBEC, october 15.-The back
ground of the eighteenth annual con-
Vention of the Investment Bankers
Association, which is getting down 10
business today, is quite different from
that in any other year. The 1000
representatives of bond originating and
distributing houses in all parts of the
United States have come here hoping to
find encouragement for better trade in
investment securities than they have
had since they were, at Atlantic City
in 1923. They are deeply conscious that
times and fashion have changed and
the competitive factor of common
stocks may be permanent instead of
transitory. ~
Since the last convention bonds have
gone out of style among investors. There
were clear symptoms of the movement
away from fixed interest issues and
into equities last October. Few then,
however, foresaw the extent to which
the investment business was to be
dislocated by the strong preference of
the public for common stocks of cor
porationS, for bonds with convertible
privileges and for the shares of invest
ment trusts and trading corporations.
See Hopeful Turn.
Nor did some of the men who had
spent lifetime in buying and selling
bonds believe it possible that within IL
months they would be divoreing them
selves from this activity and joining
organizations whose trade mark was
the stock certificate. During this period
the market for bond statesmen has be-
come as glutted as that for used cars.
What the bond men who are now
swarming in Quebec want to find out
in the next few days is whether they
are In q business that may 60 the way
Is cottonS and woolens when silk and
HayOn became popular, or whether there
Is o chance for a renaissance In the
investment market that viii permit
them in time to recapture their old
customers. Certain signs in the past
week are giving them a degree of hope
that they have not had before this
year.
These signs first appeared after the
stock market collapsed week before
last. They took the form of demand
for high-grade railroad and public
utility bonds and for municipal issues.
The extent of the decline in the much
exploited "b.Le chip" shares jolted the
public more than any of the other re-
actions of the year, including that In
March. 1t set it thinking about paper
profits that remained and the advisable
ity Of getting these before they had dis
appeared.
The evidence from bond houses is
that many SPECTATORS who had been
plunging in the most volatile stocks
suddenly became super conservative and
began to buy municipal bonds. Some
even bought United States Government
securities. Others went back to the
best of the first mortgage railroad and
power and light issues, which they had
completely abandoned since 1926 and
1927, and with it their old dexterity In
cutting coupons.
Decline in Money Rates.
These changes, due to the new eau
ton of the public after a severe test
of the market, were aided and abetted
by the unexpected decline In money
rates, Though brokers' loans held up
until last week, interest rates began to
decline Just as soon as the worst OF the
stock market storm had blown over.
Prices ofsgilt-edged bonds are as SEN
sitive to changes in rates for money as
Is q compass to magnetic influences.
The factor that did most to stimulate
these securities was a drop of nearly
per cent in short-date loans. The
stock market keeps in touch with call
money, while the bond market looks for
guidance to time money,
Given situation in which the buyer
of securities has begun TO discriminate
more carefully between those that go
up and down like a jumping jack and
give very small return and others that
move somewhat laboriously, but permit
the holder a peaceful nights rest, and,
secondly, q more comfortable money
market, the basis of q returning bond
market has been established, The only
disturbing feature in the situation Is
that the public may be won back to
stocks If they continue to advance. and
that money may stiffen up again toward
the end of the month and be high again
on the approach of the holidays.
A convincing proof that the bond
market has turned is to be found in
the reception given by the bond issues
brought out last week. One of them
was the $1o0,000,0 900 offering of per
cent convertibles of the Texas corpora
ton of which the allotments were 10
per cent. This is the largest oversub-
scription to any like kind of bond in
months. Another was the $10,20O,o00
issue OF New York Central equipment
trust certificates which, in Wall Street
vernacular, went out of the window.
The market for foreign bonds which
has been in the doldrums for over a