Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-06
INVESTMENT BOND
PRICES ARE LOWER
re-HoIiday Selling Results
in Loss at the
Week End.
Special Dispatch to The Star.


NEW YORK, September Sin view
Of the strength shown by railroad bonds
late in the previous week, the last f1ve
sessions of the investment market were
disappointing. The week started on
well. Bonds were firm and showed every
indication of a broad improvement. but
when stocks started on the downgraoe
bonds lost virtually all of their improve
ment ard at the end Of the week, meas
ured by Standard Statistics index OF
so Issues, were within third OF q
point Of the years low level.
It was obvious that there was con-
siderable amount of pre-holiday selling
by those unwilling to take risk on
what might develop between Friday and
next Tuesday But this was chiefly by
SPECTATORS who had bought for the re-
coyery in badly depressed issues such
as the domestic railroads and some OF
the foreign dollar descriptions. 1t was
significant that domestic industrialS
such as National Steel SIS, Vanadium IS,
United States Rubber SIS, Dodge Brothers
IS and Paramount-Famous 6s-au Is
sues that had held firm through the
previous downswing-broket to new lows.
The fact that this movement was ac-
liquidation In high-grade corporation
bonds like American Telephone IS and
Columbia Gas g. Electric IS pointed to
forced liquidation. With railroad stocks
breaking under their June lows there
was every reason to believe this was
the case.
United States Group.
In United States government bonds
M
long-term issues advanced broadly when
Secretary Mellon announced his $780,
600, 900 offering of 24-year S. It was
n smaller coupon than the market had
anticipated for so long term. The
average guess had been for 10-to-14
year IS or 3iss. An accompanying Of
fering Of $500 200, 900 Treasury rs per
cent certificates of Indebtedness was
quickly oversubscrtbed four times, but
the books were held open on the long
term loan. An oversubscription was re-
ported, but Washington intimated that
1t would be nothing like the III times
subscription received for the last issue
Of long-term treasures.
The market saw in this a cautious
Tightening Of money rates and Govern
ment bonds lost much of their i'm
provement as q result. Stocks were
sold on the theory that income tax III
creases, both Federal and State. were
impending and an acute demand de-
veloped in a scantily supplied tax-ex-
empt municipal bond market. In the
last three weeks less than $4,000. 600
of prime municipal bonds have been
offered in q market that normally can
take care Of double that amount each
week.
The continued advance of the high
grade and short-term groups once more
emphasized the spread between them
and junior bonds, for the latter were
neglected The break in stocks gener-
ated considerable nervousness amcng
small commercial banks and there we're
reported quite q number Of instances
of banks selling corporation bonds they
had picked up at the low point TWO
weeks ago and In June.
Foreign Factors.
Some reason for the markets anxiety
came from abroad. German issues
broke to new lows on the reopening OF
the Berlin Bourse. The decline there
of as to 40 per cent far exceeded ex-
pectations and had an immediate Sc
quel In the market Of London, Paris,
Amsterdam and Geneva. Large blocks
Of Kreuger g. Toll IS and international
Match IS were unloaded. It was felt
that the large government advances
made by the match concerns would be
frst to be affected by any fresh diff
nculties in Europe's finances, and there
were adverse developments in South
American republics in connection with
the match monopolies granted these
companies One, Ecuador, rescinded
the concession.
(Copyrieht. 1881