Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-01
INVESTMENT BOND
MARKET IS DRAGGY
Prices Hold Well During
Week, but Trading VOL
ume Says.
special pispatch to rhe star.

Special Dispatch to The Star.
NEW YORK, May 31.-Without a
feature of any kind, the investment
market pursued its slow and leisurely
course during the past week. Prices
held well, but volume dropped of con-
siderably under the influence of the
three-day holiday and the worldwide
preparations for the first installment
of German reparations bonds under the
Young plan.
Money, which remained at its low
level of per cent for 90-day time
loans, has ceased to be factor for the
moment.
Much stress is placed on the impor-
lance of the reparations issue. True,
the amount will be only $500, 900, 900,
not large by any means when 1t is con-
sidered that it will be divided among
New York and European capitals. But
it Is merely the forerunner of a series
of issues of like size or even larger and
many details in connection with 1T have
to be settled with q view to conditions
many years ahead.
Arbitrage Question.
There is, for instance, the question
of NEUTRALITY-SUSPICIOUS. or not the repa-
rations bonds will be transferable from
one market to another. It is claimed
that while the 5000, 1000 900 itself would
not be an arbitrage security large
enough to wreck any individual market
should exchange conditions become
such that a single market might be
flooded with the bonds, eventually there
may be $1,000, 100000 or more of these
bonds outstanding at one time, and the
sudden precipitation Of large part of
them on any bOurSe would inevitably
cause acute difficulties.
The matter of offering prices presents
another problem. In New York 1t is
taken for granted that the bonds, which
will be 519 per cent will be put out
around 90. In that event the American
slice, which As expected to be around
$85, 900 900, will be rapidly distributed
But will the same price serve to dis
tribute the bonds on other exchanges?
London, for instance, has had difficulty
in moving other foreign loans in recent
weeks, and 1t may be necessary to offer
English investors a slightly better
bargain.
These obstacles have caused a num-
Der of setbacks in the arrangements of
the terms, and some slight embarrass-
ment has resulted, notably in England.
where Chancellor of the Exchequer
Snowden is anxious to arrange the re-
funding of the British war loan.
Once these matters are out of the
way, the investment markets, not only
in New York, but of London, Paris,
Berlin and other cities, will have to
contend with a huge total of foreign
loans that have been held back in con-
sideration of the reparations bonds and
the anxiety of all nations to make the
first official deed of the Bank for In
ternational Settlements success.
New Offerings Decrease.
With such a test ahead of it, it is
natural that our bond market should
be dull and featureless One immedi-
ate result has been the drying up of
the stream of new f1otations. The week
saw only SAC, 767 900 new bonds put out.
against STA, 653,000 last week and
SOL ,081 900 in the same week of last
year.
There were some slight disturbances
caused by factors bearing on individual
bonds. Such fluctuations are always to
be found in the market, and usually
they have no bearing whatever on the
investment outlook in general
As a matter of fact, the market has
done well to have absorbed the huge
amount of new offerings put out since
the beginning of the year and still keep
up the level of prices currently pre-
vailing.
1na0N