Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-28
PREPARATIONS LOAN
|. PROSPECT IS GOOD
Market for Foreign Dollar
Bond Issues Has I'M
proved Recently.
BY CHARLES F. SPEARE.
Special Dispatch to The star.

| Special Dispatch to The Star.
WALL STREET, NEW YORK, Janu-
airy 2S.-From the standpoint of floating
supply tsls market for foreign dollar
ponds is in stronger position today
IMAM IN the past t1o years to receive
the first installment Of the proposed
| reparations loan.
On the other hand, it is less favorably
situated with respect to prices than It
had been before pending the fiotation
OF what might be termed a pivotal
piece of European financing in the form
Of dollars.
With easier money conditions In this
country, however. it is the feeling of
those bankers who win head the syrdi-
cate to be formed for the reparation
loan that the price situation can be
| improved. Already this is taking place
In those foreign bonds that have the
most intimate connection with the
reparations loan. This includes German
issues OF the municipal type and also
the securities of institutions over which
| the Reich exercises more or less control.
All OF these bonds have advanced sub
staptially since the early part Of the
year.
1929 Financing Small.
Figures presented by the finance diyi-
sion OF the Department of Commerce
| suggest the low ebb in foreign financing
| during 1929. The total number of new
issues that year and the dollar amount
| represented by them was the smallest
since 1924. Less than half the new
capital for foreign use was raised In
| 1928. "'-'
| An analysis of the record of foreign
loans since 1916, when France and
Great Britain became large borrowers
! In this country and their securities were
somewhat timidly presented to the
American investing public for approval,
| SHOWS that the boom time for such
| operations was between 1924 and 1929.
IL was at the latter end of this period
| That the market became so saturated
with foreign dollar issues that it crlInn-
pied ana practically all of the offerings
IN the f1rst half of 1928 went to a sub
stantial discount from the subscription
prices.
In this five-year period there were
approximately 1000 different foreign
issues, including loans to governments,
cities and provinces, to industrial cor
porations, to public utilities, to banks
and even to religious organizations.
They represented total par value of
approximately $1,000, 900, 900. The wear
OF greatest volume in loans was 1927.
when nearly 81 SOC, 0O0, 900 came into
the American market.
Between 1916 and the end of 1929
there were about 500 different issues
represented by par value of slightly
under $500, 00O, 900. These Included
many Of the choice 8 per cent loans
OF the strongest of the European
credits and of which many have since
been retired.
EXCESS Largely Absorbed.
Coming down to 1929, it is found that
the total number of new issues In that
year was only 1872 and that the dollar
amount was $715,0O0,OOO However, q
very high percentage of this was for
Canadian account. Few loans were
made during the year to Europe or to
South and Central America and less
than $70,00o,000 directly to govern
ments.
The situation today is that the ex-
cess Of loans in 1927 and in 1928 has
been quite generally absorbed, and there
are few outstanding weak accounts of
such loans in dealers hands. This places
the market In sound technical posi-
ton to receive additional bonds when
the first poHtion of the reparations loan
Is out of the way and foreign govern
ments and foreign corporations get con-
sent from their bankers to resume ne
gotiations along the lines that were
abandoned in 1929.