Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-12
INVESTMENT BOND
DEMAND NOT LARGE
Cleaning Out of Weakened
Accounts Held Responsible
for HeSitant Market.
snscial plsnatch to The star.

Special Dispatch to The Star.
NEW YORK, January 1l.-While the
past week in the investment market did
not come up to the prediction made
for it during December, it nevertheless
provided some comfort for those in
terested in bonds in that legal and
other high-grade descriptions were
strong, and the better grade of issues
In the foreign department advanced to
a high level. Apart from that. there
was disappointment. The expected re-
vival consequent on the release of about
81 900, 000,0 900 in dividends and bond in
tereSt did not materialize. This pos
sibly is due to the employment earlier
OF anticipated income and stock pur-
chaseS at 1929 low levels.
, Liquidation of accounts that have
sho, ! losses since the November de-
cline continued, and until these losing
accounts are cleaned out traders con-
cede that the market is not likely to
have general advance.
Volume Is Smaller.
Volume was considerably less-thouph
1t did pick up at the end of the week
put the volume did not by any means
reflect the amount of securities being
moved, as during this same quiet period
many new issues were distributed with
an eXpediency reminiscent of a boom
market. During the week offerings
which totaled $l38, POT 900, against S.
1000 in the previous week and Sl7.-
$4,000 in the same week last year
included: $60,00000 insult Utility In
vestment. Inc, per cent convertibles:
$500, 600 Butler Brothers IS, $4,000, 600
Province of Buenos Aires SIS, $35.-
$29,O5O,OOO Tennessee highway, bridge
and refunding bonds and a number of
small municipals.
Close to $500, 900 of new issues are
IN immediate prospect. The American
Telephone &, Telegraph Co. will offer
l5O,O0O000 of sinking fund per cents
at a price said to be in the neighbor-
hood of 9912. These bonds, on a when
issued" basis, were traded on the Prod
uce Securities Exchange. Friday, and
went to fractional premium. So did
the Boston Edison Illuminating IS on
the Curb Exchange.
While the $15O00O,00O issue is all
that Is announced at present, the Bell
System generally is considering an ex-
pansion program for this year calling
for the expenditure of 500, 600, 900.
Another large fiotation in prospect
is $35,088,00 Of Chesapeake & Ohio
bonds due at the end of the month and
to reimburse the company's treasury
for past expenditures. The Interstate
Commerce Commission granted permis-
sion for the issue during the week The
Newton Steel Co. is to offer a $4,000 900
issue: the Pittsburgh & West Virginia
has applied for permission to issue So
100000 in bonds; Associated Telephone
Utilities Co. will offer $4,000, 900 of sig
lab
some large issues are expected down
shortly in connection with the Cana
dian Nationals new terminal in
Montreal.
Foreign Financing.
AS to foreign financing, the early
months of the year are expected to see
the Notation Of German reparations
loan and with this certain amount of
German industrial and other corpora
ton bonds, although German munich
palitieS and provinces are not likely to
float further dollar credits here with
out the Endorsement OF the central gov
eminent. The financial world will not
tolerate any factor which is likely to
lessen the reception OF the reparations
loan. The Berlin municipal traffic COM
pany is negotiating in this market for
a $4,000, 900 credit. But the New York
syndicate has already indicated to the
company that the loan will have to wait
until the financial situation In Germany
is cleared up.
Every day this week the list has ended
about unchanged after minor fluctua-
tons. Each group that rallied had some
special interest behind it. Sugar bonds
ended the week strong, with the promise
of something tangible coming out of
the conference of American refinerS
with representatives Of the Cuban CO.
operative selling agency. Traction bonds
were active and higher following the
Supreme Courts decision granting the
United Railways of Baltimore Decent
cash fare. Legal bonds moved up under
buying by savings banks. which have
more reinvestment funds on hand.
To aid these moves. money was easier.
Call money reached~4 per cent and
time loans dropped TO Az to Az per
cent.
The attraction of high-grade bonds
recently Is well illustrated by the aver
age price of 10 high-grade railroad
bonds against 10 second-grade railroad
issues. The high-grade average today
stands at 94.CS, against a high average
for 1923 of 94.8 and low of 89.11. The
second-grade average is today 75.6.
against a high of 1927 and low of
1881. In other words the high-grade
issues have recovered nearly 5 points
from the low and stand within a point
of the high, while the second-grade
group is still nearly points from the
high level, even though 1t has recovered
points from the low.
French Loans Strong.
In France the price movement of
government loans was paralleled by
strength In French loans here, govern
mental and otherwise. In his connec-
ton it is worthy of note that the 4
per cent French loan of 1917 touched
100 during the week. This same issue
dropped to So in 1926. The French
government will convert about $2,400,-
000, 900 of S and per cent loans early |
next year. Dropping of the acceptance |
rate by Paris bankers helped the |
strength in French bonds.
Another feature of interest in the for
eign section during the week was |
strength in Argentine bonds. This was |
credited to the action of the Argentine |
National Bank in providing $25, 600 O0e |
through London loan with which to !
increase the circulation of the paper |
peso. The tight money situation in the |
Argentine has been acute and the re-
lease of $4,000, 900 paper pesos by means |
of this loan should see the country |
through the trying period of crop move
ment, although the amount seems TOO
small to provide any permanent solution
of the economic tangle. Probably the
bank can again call on Lon
don or New York for further funds
should necessity arise.