Evening star., 1930-06-22
WEEK SEES BETTER
DEMAND IN BONDS
Many Distracted Holders of
Stocks Place Funds in
Senior Securities.
Special Dispatch to The Star.


NEW YORK, June 21-Originally de-
pressed by large undigested budget of
new offerings and attacked by forced
selling incidental to the renewed slump
in stocks, the bond market put on a
poor performance in the first four
sessions this week.
The market did not receive any re-
lief from the stream of new capital
offerings, which totaled close to
Sl50,000,000. This is 100000 900 under
the previous week. but that week in
512 per cent reparations issues, for
which the world markets we're pre-
pared well in advance.
However, the end of the week saw
a strong upturn as the Federal Reserve
rediscount rate was cut to 2l2 per cent,
the lowest rate in the banks history
and bankers acceptanceS were accord
ingly cheaper, as was time money. The
action OF stocks in retracing part of
their large losses of the past fortnight
helped along the bond market by ad-
vancing convertibles and stock option
bonds and removing from the market
the heavy forced liquidation.
Heavy Investment Demand.
When the clouds had cleared away
after the storm of selling, it was found
that the average of so representative
bonds had dropped to 9l so from its
March mark of 94.80. But this does
not tell the whole story, as u. S. Gov
ernment bonds, prime railroad mort
cages, and high-grade public utilities
held well on a large investment de-
mand consequent on the almost frantic
search for financial shelter by dis
tracted former holders of stocks.
1t was in the industrials, which
dropped from their high average of
87l2 to 8Il7, and in the junior rail-
road descriptions, which fell of fro q
90.7l to 1925, that most of the havoc
was wrought Foreign dollar credits
held fairly well. AT the end of the
week they stood at 1902. compared with
their March level of l01.16.
United States Government issues were
supported not only by investment de-
mand, but by the success of the recent
Government financing which went to a
fractional premium in counter trading,
and by the indications that there would
be a further lowering of money rates.
The eight active long-term Government
bonds averaged 104.562 at the end of
the week, compared with their March
high of 104628. High-grade rails
averaged 95.45, equal to the previous
high mark Of the year, and the public
utilities stood at $3.50, compared with
their best of 1Oo.o3.
German Bonds "Pegged."
The new German 51as stood at 80
all week, securely "pegged" at that
price by the offering syndicate. but in
London the issue dropped to a 2-point
discount at one time. This affected
other German bonds, such as the Repar-
ations Is, German Central Bank 6s.
Deutsche Bank 6s, Berlin 6l2s and Co.
logne 612S, but the losses were hardly
comparable to those suffered in other
parts of the list. Bolivian bonds were
a sensitive target for the selling, owing
to the complication of political troubles.
and the rs fell off to a new low at
20 and the 8s down close to 80, both
Is points below their recent levels.
Other South American issues that
cracked under the strain were Antiquia
rs. off over points, and Cundin Marca
6i2s and Brazilian and Colombian de-
Scriptions.
European bonds were strong, however.
with Paris still in the market to buy
French bonds in almost any amount.
Some interest was shown in the de-
foulted issues of Mexico and the Ma
tional Railways of Mexico with the an
nouncement that Luis Monies de Oca,
Mexican secretary of finance, will at
tend conferences with the international
bankers committee on Mexico in New
York this month with the idea of re-
suming interest payments on Mexicos
debts
There are about $l84 ,0OO, 900 Nation
al Railways of Mexico bonds outstand-
ing and approximately $3.50, 900 900 Of
Mexican government bonds on both of
which the interest payments have been
defaulted for some years.
tCopyriRht 1901