Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-30
INVESTMENT BOND
PRICES UNSETTLED
Profit Taking Proves Disturb
ing Factor in Market
During Week.
special pispatch to The star.

Special Dispatch to The Star.
NEW YORK. March "a combi-
nation of factors caused some unsettle-
ment in the investment market during
the past week. Money rates advanced
a little from their low level under the
stimulation of stronger demand from
sources outside of the market itself
Strictly speaking it was rather a hard
ening or curbing of the supply, because
time money did not show any quotable
difference, 90-day bills still going at
312 to 4 per cent.
Part of the price appreciation of the
previous week had been based on an
ticipation Of another reduction In the
New York Federal Reserve Bank re-
discount rate. But the street accept
ed, at the beginning of this week, the
probability that the rate would not again
be lowered and prices reflected this in
a small decline.
Cheap Money Factor.
However, this movement did not GO
very far and the assumption Is that
money will remain comparatively cheap
for some time to come. AS a conse-
quence, continued activity is expected
In the senior market. Volume fell
off this week as matter Of fact, but
dition to the undistributed portion OF
last weeks budget Of $4,000, 900 new
issues, a total Of about $3.50, 1000, 900 was
brought out this week. Naturally the
process of getting these out cut down
market transactions. New issues in
the same week last year aggregated
$44, STE, 900.
Another factor in the movement was
the comfortable profit shown IN the &C
counts Of those who had bought bonds
at their lows of last November, or even
q month ago. Profit taking was not
heavy but it had its effect, particularly
in the high yield types. Corporations
withdrew their funds as the increase
In business activity provided more use
full purposes for them.
To set against the foregoing there
was a moderate increase in the buying
of bonds by savings banks. Life In
surance companies reported an increase
in new business coincident with large
decrease in the weekly totals OF loans
TO policyholders. This last would sug-
gest that the insurance companies were
also heavier buyers Of bonds.
The trend Is illustrated by few
figures. An average Of so bonds, rep
resentative of the whole list, stood at
"a. "a at the end of the week. COM
pared with 94S0 last week. United
States Government bonds, always SEN
Sitive to money rate fluctuations, ended
the week with an average of 103.6S6
for the eight active long-term descrip-
tions, as compared with 104.628 a week
ago. This drop of nearly a point was
completed during Thursdays session,
showing that traders in these securi-
ties anticipated the maintenance of
the present rediscount rate.
Railroad Bonds.
Prime railroad bonds did not drop
so far, their average standing at 94.9l,
compared with 95.45. Ten prime public
utilities kept still closer to their high
point of the previous week at 1887,
against 10O.O3. The widest decline was
in the industrial group, whose average
was nearly points lower at 85.28,
compared with sta. A group of
junior railroad issues dropped to 1895
from 90.71.
lous situation exists. The lack OF new
offerings to feed the steady demand
peculiar to this type Of security has
left that section with virtual scarcity
and the current range OF municipal
bonds still stands here as 1t did week
ago. about $50 to 4.30 per cent on the
best issues. Boston, for instance, paid
only 1888 per cent to market $5,000,-
600 loan during the week. This prob
ably will be re-offered to the public
around $50 to $50 per cent. The
weeks total of new municipals was
only about S40,00o,000.
The foreign department also resisted
the weaker tendency and a group OF
good foreign government obligations
ended the week at 101.16, compared
with 100.71 last week. The strength IN
foreign exchange was partly responsible
as there was a considerable amount OF
buying of these securities for overseas
account. On the other hand political
developments In Europe have not been
so promising, with the overthrow OF the
German cabinet and the continued
deadlock OF the Naval Conference. In
addltlon the high prices to which the
foreign list had climbed last week
attracted moderate amount of specu-
lative selling.
The explanation of the rise is that
With cheap money prevailing through
out Europe, and banks unable to realize
better than 2 3-16 to 2 5-16 per cent in
their own bill markets, they have been
sending considerable sums to America
for investment in their own dollar
securities, which offer attractive yields
compared to money market conditions.
Early this week, when the rate on bank
ers' acceptances touched az per cent,
there was small movement the other
way, but with two consecutive adj
vances in the acceptance rates here
the flow was again reversed and at the
end of the week foreign issues rose
strongly.
Germany Obtains Credit.
Germany obtains A $50, 900 900 credit
in this market with which to repay II,
cash Q credit Of similar aazS datinr hack