Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-27
HUGE INVESTMENT
DEMAND EXPECTED
Bond Dealers Anticipate Un-
usually Large Business as
Dividends Are Paid.
BY CHARLES F. SPEARE.
pecial Dispatch to The star

special DlSpatch TO The star.
NEW YORK, December 27-The APP
pearance in the retail trade after the
holidays of marked down" sales for
promoting business comedies with the
distribution from the investment worlo
at this time of the year of lists of
securities recommended to those who
anticipate dividend or interest money
from their securities on January /.
The January "reinveStment demand"
always has been one of the great slim
ulating influences in the bond market.
majority of corporations pay their
Semi-annual interest on January ana
July /, and a relatively large number
have established these dates for dis
tributing their quarterly dividends. The
sum of both interest and dividend pay
mentS has gone on increasing from
year to year, and for next Thursday
1t is estimated as high as $1,120,000, 0O0
This represents an increase of between
IS and 100 per cent in the past 10
years and is more than 20 per cent
greater than the amount paid out in
January last year. 1t is about one
eightieth of the total annual income
credited to this country.
Anticipate Demand.
In anticipation of the January IRE
investment demand" dealers in bonds
have long been accustomed to buy up
the kinds of securities they feel will
be most desirable for their clients. This
has led to a strong market for Sucn
issues in the later weeks of the year.
AT the end of 1928, however, the public
was not deeply interested in bonds ana
in consequence, there was not much
preliminary absorption of them for re-
distribution. The break in stocks in
october and in November, however,
turned many of those who had been
specializing to securities with fixed rates
of interest On the assumption that
the investing public is more conserva-
tive today than it has been for some
time, advance buying OF bonds of high
quality has been in evidence recently.
Bond dealers today, however, were not
prepared to say whether the January
interest and dividend money would be
transferred into the investment market
on the scale of previous years. Some OF
them are quite skeptical about it. They
were among the younger generation
who, in spite of the experience of the
last few months, believe that people
with money still prefer to buy stocks
instead of bonds, and especially when
that junior securities of many of the
best managed and most progressive of
American corporations may be pur-
chased at from SO to so per cent Of this
year S nlgn prices ana at yields ranging
from 5 to 10 per cent. They contrast
this with the return on such bonds as
the investor would most likely consider
and on which his annual income would
range from only 434 per cent to about
8 per cent and is in addition subject to
tax
Not only are bonds purchased pre-
nminary to the January period in an
ticipation of their resale at better prices,
put the first Of the year is the time when
those corporations that need money are
most apt to offer new bond issues, be-
neving that a considerable portion of
the fund available for reinveStment will
be directed toward them. Consequently,
with 81, l20,000,000 of money being re.
leased in the first week OF January, bor-
roWers nave their eye on it and Wall
Street expects to see quite a number OF
public utility and railroad issues appear
ing in the market shortly.