Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-29
SPECULATIVE BOND
ISSUES DEPRESSED
Rails Under Pressure During
Week Following Reports of
Poor Earnings.
Special Dispatch to The Star.

|
NEW YORK, June 28.-While United
States Government obligations reflected
the still further easing Of money rates
by going to new high average for the
year, the past week in the bond market
was chiefly notable for the wide decline
! in speculative industrial issues and
Junior railroad bonds.
Since speculative types of bonds are
more likely to follow the course of
stocks and usually pay little attention to
the movements of money, the course of
the high-grade issues must be taken as
as truer gauge of the market.
Rail Group Sell Of.
| Yet that is not all of the story, for
| prime railroad bonds suffered not a
little in the forced liquidation of the
early days of the week, when stock mar
gins were crumbling as fast as they were
propped by quick sales of bonds. AS q
matter of fact, 10 such railroad mort
cages finished the week at an average
of $3.50, compared with 95.45 in the
| previous week. At $500, this group may
be said to be out of line with the market,
! since the fluctuations of this type of sc :
curity should reflect the course of
money, now at its lowest since the lat
| ter part of 1924. @
Taking the market as a whole, Stand
| ard Statistics weighted index shows 80
bonds at 99.3, or the lowest since early
March, when the same. index dropped to
| 98.7 on March 4. Hence. the market is
not in such bad shape as might be
suspected if one were merely to examine
casually the many weak spots.
The continued reporting of unex-
| pectedly large decreases in railroad
earnings for the first Ave months of
the year brought heavy liquidation in
the junior securities of the carriers and
such issues as Chicago g. Eastern Illi-
nois IS, Chicago Great Western As, st.
Paul adjustments, Rock Island AIS,
Denver & Rio Grande Western IS, Erie
| SIS, International Great Northern ad-
! justments, Frisco AIS, Seaboard Air
line 6s, and Boston e. Maine SIS dropped
to levels not only below their previous
bottom marks of this year but below
the prices touched in the panic days of
last Autumn.
Foreign Issues.
Foreign bonds were fairly well sup
ported by buying for overseas account,
though here again the forced selling
factor entered into the declines earlier
in the week. Their recovery was fairly
general in the last two sessions. 1t re-
flected the success of the reparations
AOdIis ClAiIOcQ UdCk CiOSS 10 lLS
offering price of 90 on the London
market. after dropping at one time to
4l4 per cent discount. There was
heavy trading in the new German .51as
at the offering level in New York,
especially on Thursday, which was pay
ment day.
Bolivia is in the midst of political
disturbances, but speculative buying of
her bonds, which were all selling on
a al L.o
covery of 2 to 8 points.
What Is likely to help outstanding
foreign loans is the current official re-
straint placed on new issues. This, in
some dergee, is prompted by deter
nimation to distribute the reparations
bonds in a satisfactory manner, and in
measure by a paternal official pro-
lection designed to prevent a repeti-
ton of last Falls debacle, when foreign
credits slumped without apparent re-
sistance.
(Copyright, 1900