Evening star., 1929-12-18
INCREASE IN BOND
FINANCING IS DUE
Large Number of New Issues
Are Expected After Jam
uary |.
BY CHARLES F. sPEARE.

Special Dispatch to The star.
NEW YORK, December 1S.-The sag
in the listed bond market the past
week has been due to the expectation
of q large number Of new issues to
be brought out in competition with
old issues after the turn of the year.
These will represent financing by
railroads, public utilities and indus
trial corporations, with the prospect
of a considerable amount Of borrow
ing by municipalities. It is still open
to question how far these new offerings
will be absorbed. Much depends on
their quality and on the prices which
the syndicates place on them.
During the panic dealers in bonds
were able to buy UP round amounts
being sacrificed in order to protect
speculative commitments or exchanged
common stocks at bargain levels.
Gradually these bonds have been re-
distributed among institutions, estates
and private investors. Large amounts
Of bonds that had been carried many
months by those who had underwrit-
ten them, and which at one time
showed substantial losses, have been
money and q diversion Of funds from
the call money market into the obliga-
tions Of corporations and municipall-
ties.
Short term Notes.
The strongest inquiry still is for
short-term notes, which are scarce and
which command high premiums and
give low return. Railroad Equipment
Trust certificates maturing in the flrsC
half of 1880 have been selling on q
Az per cent basis. Government paper
has been quoted below 3 per cent
basis. Substantial amounts OF the new
keted to yield 3h per cent. during
the coming year o great deal OF this
will undoubtedly be refunded with
long-term obligations.
Specialists in preferred stocks, and
especially those of the public utilities,
report the best buying in this group
of securities in nearly two years. De.
mand is of a general character, although
the insurance companies have taken
large blocks Of them In preference To
buying bonds at considerably lower
Weld. It is expected that with the
present popularity Of preferred shares
some Of the new financing will be III
this form. The beginning OF 1t was
witnessed today in the offering OF
block of 10O, 900 shares Of Standard
Gas g. Electric preferred at approxl-
mately the market level for the stock
outstanding.
New corporation issues with a 5 per
cent coupon offered at par have been
omickly Absorbed recently, In contrast
to the very limited sale Of such issues
possible during the greater part oi
this year. Such bonds Of this type
have been those Of the Detroit Edison
Co. which put out $l3,5l6,000 OF gen.
erai and refunding SIS last week and
the $50 100000 issue today Of per
cent collateral trust bonds OF the
Canadian Pacific. In the same class
are SIS. 100000 S per cent bonds OF a
pected to be offered tomorrow at par.
Applications in advance for securities
of this character have been relatively
i, as great as for some Of the popular
trading company stocks at the height
of the movement In them last summer.
Not much is promised for while
in the way of foreign Issues. although
negotiations are pending IN connection
with some of the South American
governments and states. The proposed
CITY of Berlin one-year note issue on
a 7l5 per cent basis has been aban-
doned, owing to the objections to IL
by the German government.
German Loan.
Rumors of . loan by an American
group headed by Dillon d Co. to the
Reich were confirmed this afternoon
by cables stating that the ReichsbanK
president, DR.. Hjalmar Schacht, hao
approved an $50, 600 900 issue.
There were no foreign government
loans during the entire month OF No
vember and only $6e, e,260, 900 for the
II months ending November 80, com.
pared with about $685., ,00o, 900 for the
same period of 1928 and $670,0O0,OOO
In the IL months of 1927.
The abrupt decline In the total OF
new issues last month to less than
$500 ,OOO, 600, compared with $S77, GIT 600
in September, the smallest, with one
exception, since July, 1928. was due
chiefly to the drying up OF offerings
by finance companies. After having
brought out approximately $2,325. .o0O,-
600 of investment trust and trading
corporation shares between January
and The end of october, of which 6O
per cent was crowded into the months
of July, August, September and Octo-
ber. the records indicate that only
S3 AIS 900 stocks of this character were
floated during November. Promoters
of this type of security are now turning
tIn{- aGfa~klaya 1ya NthAr directions,