Evening star., 1929-06-30
BY CHARLES F. sPEARE.
Special Dispatch to The Star.

DL NAlAhAL6o Es "a AAA~S@S
Special Dispatch to The Star.
NEW YORK, June 29.-The climax
of the six-month bond market period
Just ended was reached in the early
part of June, when the United States
Government was comp.sled to borrow
on nine-month paper at Sls per cent;
In March the government had sold
certificates of indebtedness at 434 per
cent, and a year ago at 37s per cent
and per cent In November. 1927,
1t was able to obtain funds at 31s per
cent. This represents the progressive
strain on the money market while
speculation In stocks was absorbing sup
plies of capital and the public was
showing a strong preference for stocks
rather than for bonds.
Within the half year domestic bonds
touched the lowest average since 1926.
With the exception of brief rally
in April there was an almost continuous
decline from the early part of January
to the end of May. 1t occurred, how
ever, on a comparatively small volume
OF transactions, for the heavy liquida-
ton by institutions and by individuals
took place in the Summer of 1928 and
again during the Autumn of that year
The situation can best be pictured by
giving some OF the important changes
Between their high prices and their
low level United States Liberty bonds
showed a range of from 215 to 23Z
points. United States Treasury certifi-
Gates declined from 3H points to 63z
points. The railroad legal list of bonds
had an average drop of about points
The legal public utilities fell from 4
to S points. In the secondary railroad
mortgages there were declines of from
to 10 points. Unlisted public utilitie.
went down from to points, and ir
some cases to and 10 points. There
were many industrial bonds in which
the losses were extreme, but these re.
flected unfavorable internal condition.
rather than the state of the credit
market.
Foreigns Show Decline.
Turning to foreign bonds, in which
the average decline was also substantial
we f1nd evidence of an oversupply Of
second and third grade credits and con-
ditlonS suggesting lack of discrimina.
ton both as to the amount of such
bonds offered to the American market
IN 1927 and 1928 and also the quality
of them.
This is indicated in losses of from 5 tc
points in the bonds of Antioouia. OF
70 IL points in those of Bolivia. o1
4 to points in Brazilian issues anc
s TO points in the obligations of Chile
ana Peru. The various government anC
| bank bonds of Columbia dropped 9 to Il
| points and those of the Dominican Re-
pubic from to Q points. A. number Of
the South and Central American coun-
tries and provinces borrowed beyonc
their capacity. They are now experi.
| enclng difficulty in meeting the service
| OF their debts. They are not altogether
! at fault for this condition. When The
going was good and the American public
was willing to buy high coupon foreiar
bonds without looking much to tht
| equities behind them, they were sup.
piled, as they always are, and today fine
that they are holding some rather pool
| securities.
| Coming to the German group of bonds
which had to bear the brunt of the
| liquidation during a critical period Of
the debt negotiations in Paris, we fine
the following conditions between Jan.
uary and the first of June: Municipa
and provincial issues off 6 to 8 points
| mortgage bank bonds down from 6 to {
points, public utilities from to IL
points and industrials off to 7 points
The German government per cent loar
| stood up Splendidly during the perioC
| OF liquidation and varied in price les.
than point while others were expert.
enclng severe decline. Movement:
| that were sympathetic with the Eu.
ropean financial and political condition: