Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-04-27
INVESTMENT BOND
MARKET IS DRAGGY
Heavy Load of New Offerings
Causes Price Recession
in Week.
Special Dispatch to The Star.

Special DlSpaLcn TO Inc SUIT
NEW YORK, April 26.-The invest
ment market ran along this week in the
same familiar rut that has held 1t in
its grip-with the exception of the
spasm of active strength in mid
March-these many months. While
money rates continue low and should
result in an upward move were other
influences absent, the volume of new
offerings has been SO large as to pre-
clude the possibility Of any general adj
vance.
Bonds were weak at the beginning of
the week and dropped still more in
the Tuesday session. An easing of
bankers acceptance rates, followed by
o reduction of time money to per
cent for e0-day bills. on Wednesday
gave the market a start, and 1t re-
traced the ground lost in the first two
sessions. But new offerings piled up,
until the weeks total was about $685.
900 1000, compared with sos, 504 900 the
week before and $182, 900 two weeks
ago.
Midweek Gains Lost.
Such a smothering load could not be
without its Oppressive effect, and the
midweek gains were lost. At the end
of the week the averages for both do
nestle and foreign bonds were of about
half a point from those OF the week
before.
There is nothing to suggest that any
radical change will be brought about in
the money market in the near future,
even though 1t is known that the Fed
eral Reserve authorities have every de-
sire to stimulate business activity
through maintaining low interest levels.
Apparently there has been a higher
sterilization of rates following the
March low level, and this, together with
the continued flood Of new offerings,
has kept the market in q neutral con-
dition.
AS result, while bonds are hardly
cheap enough to justify large institu-
tionai buying merely for the sake of
securing bargains, they are not high
enough to reflect the true cheapness Of
The market has Jagged behind
the sharp changes in the cost of credit
but, nevertheless, with a sustained rise
in the investment holdings of banks,
should seek higher levels in time.
Another factor that should help
along the eventual advance is the con-
tinued grooming" Of outstanding issues
to ease new loans into place. This has
been apparent during the past week,
when sections of the foreign depart
ment maintained strength In the face
of the general dullness. For instance,
Chilean bonds opened the week very
active and remained so, obviously pres
aging the announcement Of the Chilean
SIS ,000, 900, per cent, at 912. The
IS had sold around SO, but
dipped to the offering level reluctantly
and hung there, securely ''pegged."
Japanese Issues Strong.
japanese issues were kept up to their
best prices of the previous week, ap-
parently to prepare the way for a $780,
600 900 loan for which the Tokyo gov
eminent is negotiating in this market.
Coffee state bonds were supported in adj
vance of the issue of the Sac Paulo
$1OO 900 900 coffee sterilization loan, of
which about $35,000,000 Is New York'S
slice, the rest going to Europe.
In the domestic list, the most active
group was the obligations of amuse-
ment companies. Persistent rumors OF
q merger between Radio-Keith- Orpheum
and Pathe resulted In rapid advance
of affected securities. Then the ref
scheme for the Fox Film and
Fox Theaters, initiated with $780,
000, 900 issue Of new General Theaters
IS, brought the spotlight to
bear on the old skies.
The municipal market continued to
present q tight situation. Few new
offerings of high merit were brought
out during the week, while at the same
time there was considerable buying for
private account of what the dealers
had on their shelves. An instance was
the picking up for one account of $10,-
O00, 900 New York City bonds, leaving
a virtual scarcity in this particular type
Of security. The situation will be some
what relieved early in May when West
chester County, with a $19,775, 900 Offer
Ing Of improvement bonds, and other
civic groups come into the market.
Real Estate Loans.
Meanwhile the market is far from
being q gauge of the cost of money
in other directions-real estate, for
instance. While there was an instance
during the week Of the financing of
large building in New York at cost
Of So per cent, this was exceptional.
One building loan was put out at
cost Of over TN per cent, and dealers
that In the case Of less known