Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-14
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, November 1.-THE
market for new issues Of securities In
the first half Of November has been Is
barren as in the month Of October.
when fotations of stocks and bonds
touched the lowest level in 20 years.
Investment bankers returned from
their convention at White Sulphur
Springs this week were of the general
opinion that not much could be ex-
pected in the way of new business for
the remainder. Of this year. Ordinarily
at this season there Is much activity In
promoting underwritings, and among
dealers, In the building; UP of posi-
lions" In anticipation Of the normal
late December and early January REIN
vestment demand. At the present
time, however, corporations cannot
finance on terms that would be &C
ceptable to them, while the public that
has money, to invest shows q strong
preference for common stocks rather
than for bonds.
Government Financing.
There is also immediately ahead the
Government financing which is neces-
sary In order to take care of the heavy
maturitieS falling due on December Is
This operation Is conceded the right
Of way this year when, owing to the
change In interest rates and the recent
heavy decline In Treasury issues,
may be necessary to nurse the market
along and offer terms to prospective
buyers that will be more tempting than
those of the last major undertaking In
September. The nature Of the De-
cember offering will not be made public
for several weeks.
Had 1t not been for municipal loans
new borrowings would have dropped
close to zero. Even the long term issue.
of cities and States have been few anc
small in size the last two months
However, up to the end of September
they ran at about o normal rate, 81
that their proportion to all new capita
raised this year Is much higher thar
it has been in any similar period sine.
the war. .
~ New Capital Raised.
New capital for the purposes o.
corporate financing and that raised BY
foreign governments and by municipali.
ties in the 10 months to October g.
amounted to $2,878, 1000 900. OF this
$1,646. 000, 900. was for corporations ant
approximately $l,134 zoo, 900 in the form
Of municipal loans. Therefore, abou
40 per cent. of this years borrowing.
have been for municipal account and II
the form of tax-exefnpt securities, com
pared with ID per cent in 1880 ane
IL per cent in the first 10 month!
Of 1929.
One of the most widely debated sub
jects in this country today is that O.
local taxation. Associated with 1t i
the somewhat reckless borrowing b!
local and State governments. A review
of the municipal loans contracted for
and. in large part, publicly offered be-
october, 1891. shows that In this periot
loans issued, not including refundinl
loans, was $8.293 ,o0o. 900. The debt o
local governments has been rising mucl
faster than the national debt declined
from year to year prior to 1891.
It Is believed, therefore, that becaus
Of the rapid piling up of this debt, an,
for obvious market reasons, there vii
be less municipal financing in the mex
IL months. This will give the marke
time to adjust itself to the excess o
offerings In the last few years, a con
dition that Will be assisted by SOM
increase IN the demand for tax-exemp
SCCuilLlCS IA tAAC GVC4lL LAIlG ulCOIIlc la
schedules are raised at the coming SEES
sion Of Congress.
Active Borrowers.
or the corporation borrowers thu
public utilities have been the most &C
tive for some years. In the 10 month!
to October 81 they were responsible
for over SO per cent of the new capita
raised. About 20 per cent was absorbed
into railroad issues. In the past 81,
weeks, however, neither the public
utilities nor the railroads have beer