Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-12
SECURITIES ISSUES .
TO Be RESTRICTED
Greatest Amount of New Of
feringS Expected to Be
in MuniCipaIs.
speclal plspatch 70 The scar.

obcCtdl DlSpAtNH W AuC 0taIs
NEW YORK, January IA survey
of the investment market in relation to
the probable new financing in the first
quarter of 1881 indicates that the total
Of new corporation bonds and stocks
will be materially smaller than in the
same period last year. From present In
dications the greatest activity will be in
the field of tax-exempt issues, or those
offered by States, cities and counties as
well as for the purpose of interstate
projects.
This is in line with the national policy
OF promoting enterprises that give ern@
ployment. 1t will be assisted by the cur
rent demand by institutional and indi-
vidual buyers of securities for those OF
the highest grade. Recently the mar
ket for tax-exempt issues has been much
firmer than during the middle of De-
cember.
Prospective Borrowers.
Some of the prospective large borrow
ers are the city of New York. the State
Of New York, the State of New Jersey
and the New York port authority, with
substantial programs of highway, water
works and bridge developments under
consideration In the West and South.
The recent improvement in the prices
of high-grade railroad and public utility
bonds has given encouragement to COR
porations in The transportation and light
and power industries that have been
poStponing negotiations with theirs
bankers until market conditions were
more favorable. There Is large amount,
of new capital required in both of these
fields for normal developments. It is
hoped that opportunity will be given
during the present period of cheap
money to refund high-coupon bonds at
lower rate of interest.
Although there are rumors of num-
Der of foreign issues pending In cohnec-
ton with European and South Amer
lean projects, the feeling in investment
circles is that the dollar bond market
is not yet in condition to present propo-
sitions that would be attractive either
to borrower or lender or to the ultimate
consumer of such obligations. Germany.
for the past four months has been COM
PEELED to take care OF major part OF
her requirements at home. While there
has been an extension Of Short-term
credits by American bankers, there Is
general dissemination to consider any
thing in the nature of long-term Ger
man municipal or corporation loan.
Undigested Securities.
In spite of the fact that total bond
issues in 1880 were about 80 per cent
below those of 1929 and that they
tapered off to nominal figures in the
last quarter of the year, there is still
considerable supply of undigeSted
securities in original hands. For this
reason there is a strong sentiment
among investment houses in favor of
some form of regulation of new offer
ings. 1t is recognized that a great part.
of the trouble in the market is due to .
the excessive emission of bonds at times
when the market is saturated. The
usual sequel of this is a heavy decline
in the price of new issues after the
syndicateS have been dissolved.
Recent illustrations of this were given
in the unusual break in Dominion of
Canada IS and Mobile & Ohio Railroad
S. The domestic municipal market has,
also had experiences of the same sort
in the last few months. Control of new
issues was successfully carried out dur
ing the war period. 1t is believed some
form of regulation of the same kind
is again desirable as a means of return
ing the investment market to condi-
ton of normalcy. Il.
CCopyright. 1917