Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-11
BOND PRICE GAINS
PLEASE INVESTORS
Bankers Note Activity in
Market on Long Side.
Advances Steady.
BY VICTOR EUBANK.

NEW YORK, November ll-Wal
Street investment bankers, who watch
oonos much closer than they do stocks.
appeared at their Offices this week with
more cheerful countenances than usual
For bonds recently seemed to have
taken new lease on life and started to
climb out of the basement
The activity of the bond market on
the long side,p say the obServant bankers.
Is one OF the best indications that BUSH
ness sentiment is slowly but SURELY i'm
proving. During the past 10 DAYS United
states Government loans showed quiet
sCrength. and some foreign issues gained
as much as is points in one week.
In ADDITION to a better feeling ALI
around. ponds generally are said to have
oeen helped by the advance in COM
modify prices and an improved credit
situation.
Flotations Few.
Few bond hotations have been an.
nounced In recent weeks owing to the
TACT That buyers were absent. One great
rallroad company IS said to have beer
forced to seek additional fnancine
through bank loans because il felt i
could not put its obligations on a feebl,
market.
One of the sharpest drops In bons
prices on record occurred during thu
11lSH-kT ace SeCur1tlnS
joined the medium and low grade issue.
IN the downward route. A virtual short
posltion was forced on manv banks
Wnlch. In order to maintain a rreatey
Lqufdlty, had to sell excellent oblirs.
lions on the market for what they wolIId
orlng. In this respect. some big losses
we're Iaken: The same banks, however
according to financial observers have
recently been covering" their sales ana
getting back into their vaults, at higher
prices; the bonds which they were forced
to unload -'oo
United States Government bonds To-
getEer with the highest grade industrial,
ana utility loans, sank to levels which
many traders regarded as "sacrifice"
prices. One reason for the slump in
these securities, was the fear that there
would be a money "pincl1" and that
low yield obligations would be extremely
poor paying investments.
Inc reversal of the gold export move
ment and an easing of the short-term
money market, investment experts sav
brought the high grades back into
FAVOR, and while few of them have made
up their losses, they are at least Of,
higher ground.
Cautious bankers. although enco,r-
aged by the action of bonds in general.
POINT out that the market Is not vet
out OF the woods" and that there are
problems both national and internao
tional which still have to be overcome
before it can be said that a real trend
has arrived.
Difficulties Summarized.
One banker summarized the dificul.
ties:
England, of the gold standard. still
has the question of tariffs and India
on her hands. Manchuria, with the
japanese and Chinese at each Others
threats, might bring a cloud out of
Russia, or anything might happen in
that country where the Orient, even at
war, maintains its mysticism of CEN
turtles. Then there's Germany with her
big financial and political questions.
And at home the railroads and their
troubles are waiting for definite solu-
ton. All of these dramas may end
happily-and there are reasons for be-
lieving that they will But at the same
time one situation or another may rub
the bond market on the wrong side.
Notwithstanding the ifs and the
ands, there Is no question that I'M
usually attractive long-term investment
opportunities are present today. But
the situation here, as well as abroad,
can be expected to bring fluctuations
from time to time, no matter how sound
the basic structure"
Increased vitality in the bond market
Is expected to bring out new municipal
and corporate offerings.