Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-08-04
OPTIONAL ISSUES GAINS.
Domestic List Average Down To New
Low During the Week.

LUW During tuC "ccn'
Special Dispatch to The Star.
NEW YORK, August 3.-Midsummer
finds the bond market In much the same
condition that it has been for the past
two months. Interest Is all in the con-
vertible issues, which this week have
been somewhat more irregular with
respect to the old favorites, but with
new stock option bonds filling In the
gap and showing substantial gains.
The domestic bond average. which
does not include the convertibles. has
dropped to a new low, or about 81
points under that Of last January.
This was to be expected in view Of the
stringnt money conditions that have
developed out of the August require.
ments plus the heavy absorption OF
funds both for the market for securities
and to accommodate commercial re-
quirements. With the average rate Tor
call loans in July slightly above per
cent, the highest for the year except IN
march. and with time loans up to 834
per cent. investment issues that are SELL
ing under a per cent basis face a
severe handicap.
Hold Up So Well.
The astonishing thing is that they
hold up so we'll There has not been
great deal of liquidation in them re.
Gently: at the same time the demand
has been slight About all they can Be
expected to do is to hold steady. New
supplies are small, with the volume OF
July financing in the form Of straight
mortgages much below that OF other
Summer months.
Most Of this weeks new offerings have
been in the form of stock issues. OF
these the securities of public utilities
and of investment trusts have ranked
first. The only railroad financing Tor
some time has been with equipment
trust certificates. The railroads bought
very little equipment during 1927 and
in 1928 when they could have sold
per cent basis Today they are COM
PEELED to negotiate with their bankers
at figure permitting the latter to sell
to the public the early series on from
a 53A per cent to a per cent basis ana
for the long maturities fully 1 per cent
above that Of two years ago.
municipalities are being restricted In
their improvement progress by the
dificulty in obtaining long-term money
within their legal right. They are re-
sorting to temporary loans which fire.
quently cost them per cent. The day
seems rather distant when they will be
able to refund these loans on a per-
manent basis, and at rates acceptable
to them.
Convertible Stock Attractive.
Stocks, either common or preferred,
with convertible privileges. absorb the
interest of the investing public. This
is not to be wondered at when the
remarkable record achieved by so many
of the public utility junior issues the
past year, is considered. The whole
program of corporate financing has
been thrown out of gear by the prefer.
ence of the public for equities rather
than for creditor positions. It will take
a long time to restore 1t.
The expectations of a month ago that
bonds might move up late In the Sum.
mer, with the return Of good markets
for investment securities in the Au-
tumn. have been completely dashed by
the return Of the high money rates
and the renewed speculation In stocks.
There undoubtedly will be more insti-
tutional buying in the Autumn; also
purchases for individual accounts and
estates that are usually postponed at
this season of the year. The general
outlook, however, for fixed interest
bearing securities over the next few
months is not particularly promising
and Is occasioning further readjust-
ments on the part Of selling organiSa-
tons to the new requirements Of their
trade