Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-29
HIGH MONEY RATES
AFFECT BOND LIST
Tax Selling Also Tends to
Check Upward Movement
in Market.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, December 2S.-Depress-
ing influences, nearly all seasonal, kept
the investment market quiet during the
past week. Christmas day, coming in
the middle of the week, was responsible
for many new issues being held over
until after the first of the New Year
High money rates incidental to the year
end and the continuation of tax selling
in moderate degree checked advances
Even the long awaited railroad merger
plan Of the Interstate Commerce Com
mission, announced on Monday, failed
to have the reflection expected in the
second grade and more speculative rail
issues. Feeling on this point is that
consulnmation is still too far off to have
any noticeable effect on issues which
might become involved.
South American Issues.
While there was not the pressure
against Argentine bonds that developed
week ago. large number OF other
South American issues dropped heavily
and along with them those of Central
America. The selling of these issues
was for the most part to establish losses
and full advantage was taken of this
where declines of as much as 20 to 80
points from the high of the year had
occurred. There was the same kind of
selling, though on a smaller scale, in
the weaker credit issues of Europe.
The immediate effect on the bond
market will be that of the January re-
investment demand. With dividend and
interest money amounting to over ST.
nm q
portion of it is expected to go into
bonds and preferred stocks. Dealers
have been buying up issues in the mar
ket In anticipation of this demand.
There Is no expectation, however, that
1t will come up to former proportions,
as the competition with higlh-yielding
common stocks is much stronger than
in other years.
New Offerings.
New offerings totaled $S,46S 900 COM
pared with $225, 569 900 last week end
and $27,104,000 in the same week of
1928. All the offerings were municipals.
Last weeks large amount, however,
Is thought more nearly to express the
gauge of the investment market and
the turn Of the year is expected TO
bring out much new financing. 1t will
be largely municipal, but there are
tations in prospect, with much flnanc-
ing incidental to President HooverS
improvement plan still more distant
prospect.
Lower money rates ace expected after
January /. The way II which recent
offerings have been absorbed indicates
how the new offerings will go. Under
writer's report that practically all re-
cent financing has been disposed of
and they are ready for the start of
big year.
Equities came back to life with year.
end short covering and also helped to
distract attention from bonds.
Average Above Lows.
AS the week ends. the average of 40
domestic bonds is still nearly 21a points
above the low CT the year, and the
average of 10 foreign government bonds
more than 2 points better than 1925
lowest level.
During 1929, when call money was at
Its extreme height, building programs,
real estate developments and indus
trial extensions were held up by lack
OF funds. But the first weeks trading
on the newly established New York
Real Estate Securities Exchange brought
out the fact that real estate bonds are
now strongly held. Where the Off
Gals OF the new exchange had antici-
pated preponderance of selling
orders, they have been unable to exc
cute the buying orders received. Actual
offerings have been few, and sales con-
cluded fewer still. This in itself is a
fair estimate of the general investment
markets health.