Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-04
INVESTMENT BOND
MARKET IMPROVES
Better Tone Evident at End
of Week, Although Aver
ages Are Lower.
Special Dispatch to The Star.

NEW YORK, October 3.-While
bonds dropped an average of about 3
more points this week, and at times the
volume of liquidation approached rec
ord proportions, the six market sessions
were not without some optimistic de-
velopments. and the week closed with
all markets in considerably better
frame of mind
The fact that New York. with one Of
the worlds few stable currencies at its
back. could absorb the offerings from
all over the world that have poured into
the local markets as foreign investors
sought to turn exchange fluctuations
into profits was itself of considerable
significance. Talk of closing the ex-
change, or even setting scale of mini
mum values, as was done when the
Stock Exchange reopened after the 1914
shutdown, quickly evaporated with the
sudden uprush of the bond market on
Friday. This was visual proof that the
markets potential strength was still
undiminished in spite Of the flood Of
selling.
Foreign Bond Selling.
The selling of foreign bonds in the
last week of September had nothing to
do with the financial stability of the
countries whose obligations were in
volved. On October l between SOS ,0o0.-
900 and S70,000,000 in interest and
sinking fund payments had to be met
In New York. In most cases sinking
fund moneys had been received here
well in advance of the date. But in
terest payments are usually held up I'M
til the last few days, and the precip-
itous break in foreign exchange quota
lions the week before had found many
foreign governments and corporations
with insufficient funds in New York to
pay their interest coupons
This phase Of foreign exchange, how
ever. provided its own corrective, and
near the week end. with the pressure of
dollar purchases off the market and ex-
change quotations advancing. bonds
came back sharply There was good
reason. Canada As, a bond payable in
New York funds and backed by the
credit of a government whose stability
is not in doubt, sold down around 70.
In the domestic field, two factors
helping railroad bonds were the con-
clusion OF hearings by the Interstate
Commerce Commission on the carriers
application for a rise in freight rates
and the agreement of the Eastern lines
on consolidation plan. But the con-
tinued decline In rail traffic, together
with the tremendous pressure exerted
by foreign holders of American securi-
ties. served to keep the index pointed
downward. New lows were reached on
each successive day until Friday.
New Offerings.
Utility bonds that had hitherto found
favor even in the widest selling panics
CT the bear market were marked sharp
ly down as English investors sought to
cash their exchange premiums Public
utility preferred stocks sold at prices
that indicated generalization in this
market. But the strength displayed
near the end OF the week served to
show that, once the foreign selling is
completed. the market will swing sharp
ly back from an oversold condition.
During the week new bond offerings
amounted to $23,812,000, against $344,-
600 the previous week and $7O,063 900
in the same week of 1890.
Copyright. 1917