Evening star., 1929-08-31
BOND
APPEALS TOPUBL|C
Other Types of Securities Are
DuII-Foreign Dollar
Issues Decline.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, August 31.-A Wall
Street house that has long specialized
in investment securities announced a
few days ago that its regular run of
clients was no longer interested In
strictly mortgage bonds, but preferred
issues with a kick" in them or con-
tanning what in more modern street
language Is known as sex appeal"
Consequently this firm. like many
others, is digging into the merits of
bonds or preferred stocks that may be
convertible into common stocks or
which carry warrants giving certain
speculative privileges. Only OCCASION
ally does 1t find it necessary to ana
lyZe the position of some mortgage lien
OF a railroad or public utility, while the
ago, for foreign dollar bonds has about
died out.
Heavy Transactions.
Due to the heavy transactions in less
than dozen convertible bond issues,
some OF the stock exchange and invest
ment houses that specialize in bonds
have done more business this Summer
than ever in spite of the drying up of
the orthodox investment market. FIRE.
quently transactions in convertibles have
represented from 40 to 50 per cent of
the total days bond business on the
New York Stock Exchange. Such is
sues as American Telephone and Inter-
national Telephone 4l2s have advanced
over 100 points in the last few months
and have bettered the gains made
earlier by such popular stock option is
sues as the Anaconda Copper Is, now
retired. and Public Service of New Jer-
sey 4l2s. Banks have been the large
buyers OF these bonds and have found
them profitable as a means of over
coming some of the depreciation that
has occurred in their lists of mortgag ges
and foreign dollar loans.
Not all of the apparent boycott of
the bond market is due to high rates
for money or to the greater possibili-
ties in common stocks and in bonds.
There are other factors that have
played a prominent part in creating
an unfavorable public attitude toward
this branch of Wall street business.
Among them are the overcrowding
Of the bond market with new issues
period Of congestion that Is not
relieved until prices have been ma
terially reduced, so that the original
buyers have to take a considerable loss
on bonds purchased.
Another bad feature both in domes-
tic and foreign bonds has been the
tendency to overprice new issues and
to bid up old issues in order to es-
tablish high selling basis for new
ones of the same quality and bearing
similar rate of interest This has in
the majority Of cases in the last year
and a half resulted in a bad break
in the price of the bonds after the
syndicate closed and the issue was al
lowed to have a free market. Here
again the original buyer has been the
sufferer from the artificial conditions
set up and surrounding new issues.
Foreign Issues.
Probably the most serious situation
from the standpoint Of future market
ing of bonds is that which exists today
in the list of foreign dollar issues.
The shrinkage in foreign bonds that
have been brought out since the sec
ond half of 1927 runs up into the
hundreds of millions of dollars Many
of these bonds are off from 10 to Is
points from the prices at which they
were sold to the public little more
than a year ago. A case in point IS
that of the Bolivian per cent issue
brought out September /. 1928, at gu ?
and quoted today around 80.