Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-08
FL0TATION OF STOCK
MAY BE CURTAILED
Let.up Is Seen in Marketing Of
Huge Investment Trust
Issues.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, October 8.-With the
amount OF financing by investment
trusts and trading corporations having
reached figure in excess Of 1000 900,
600 in the first nine months Of this year
and the stocks of the newer trading cor
porationS having been conspicuously
believed that let-up in the fiotation OF
this popular type Of security will be
witnessed.
One of the effects Of such a rapid
and extensive emission Of trading cor
poration stocks has been to flood the
market and to bring about a condition
Of 'undigested securities" This invari-
ably is the sequel Of period Of ex-
travagant response to a public demand
for a particular type of stock or bond
1t led to trouble in the early part OF
mand for AZ per cent corporation
mortgage bonds. After approximately
100000 of them had been underwrit-
ten and offered to the public their mar
ket faded away and is now many points
below the original level.
Recent estimates that there would be
additional investment trust and trading
corporation financing in the last quar-
ter of 1929 amounting to $2,500, 000, 900
have had to be revised within the past
week, or since it was possible to buy
many of the newer stocks at a heavy
discount from prices at which they
were offered in August and in Septem-
Der. Plans for bringing out new finance
corporation stocks have been abandoned
temporarily and now wait on the action
of the general market following the
break which eliminated on Friday and
was followed by the sharp rallies Of Sat-
urday and yesterday.
For the nine months to September 30
the total amount of new capital raised
in the American market approximates
$4,000, 100000. This includes not only
domestic stocks and bonds, but foreign
issues and nearly 5000, 900 900 of mu-
nicipal bonds. The significant item In
the domestic total is that Of common
and preferred stocks, which so far
overshadow bonds that the latter have
been lost sight Of in the public craze
for equities" .
In the nine months the total stock
issues OF domestic corporations hoated
amounts to approximately $4,000, 000,-
900, compared with about 1900, O00, 900
of new capital raised through the me-
dunn Of long and short-term bonds and
notes. Neither item takes into account
securities issued for refunding pur-
poses. Nearly As per cent of all the
stock issued represented the obligations
of investment trusts, trading corpora
tions or other financing organizations.
With this ratio Of stock financing to
bond financing more than 21a to /, it
is clearly evident that the houses that
have been for years specializing in
bonds have not readjusted themselves
to the new fashions in securities and
have had a difficult time of 1t. They
find some hope in the break that has
occurred in the stock market lately,
which has turned the minds of invest
ors back to securities that are less vola-
tile than stocks and pay larger return
on capital invested than do the popu-
lar high-priced industrials, public utili-
ties or even rails. There has been evil
dence Of an improved demand for bonds
Of the higher grades within the last few
days.
The problem of the bond men who
have stuck to their legitimate trade
throughout the past two years Of tran
sition from bond to stock popularity
will have an important place in the
program Of the Investment Bankers
Association convention, which is to be
held in Quebec next week.