Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-30
Special Dispatch to The Star.

Special Dispatch TO The Star
NEW YORK, April 30.--Throughout
April the bond market dropped steadily
from new low to new low until its aver
age decline was brought to within: point
of the lowest levels of last December.
Measured by Standard Statistics index OF
30 representatfN bonds, which Is based
on the average levels OF 1925 adjusted
to 100, the markets level at the end
of the month was just under 95, COM
pared with 100 at the end OF April,
1880. In the month. on the scale Of the
same index, the decline amounted to
about y points.
That the decline was SO narrow was
due to the great firmnesS OF high-grade
descriptions, which have responded with
successive new high prices to the con-
tinued cheapness of money
Junior securities. just as year ago,
we're the vide losers. After tempo
February, when some faint signs Of a
revival were reported in the worlds
commodity markets and in American
business. the picture again assumed a
dismal look as flrSt-quarter earnings
and completed 1880 reports revealed
little basis for belief that trade activity
was on the upturn.
Rail Stocks Dropped Sharply.
Domestic railroad and industrial
bonds of the class affected by earnings
dropped sharply in reflection of the IS
to "A per cent reduction in 1880 earn
ings and the failure of early 1881 re-
ports to show any change in the situa-
ton. Many railroad issues, notably
those of the st. LouiS-San Franciso,
the Missouri Pacific and the Mobile d
Ohio. dropped 10 to Is points when 1t
became evident that their earnings
would no longer permit their inclusion
in list of bonds legal for investment by
savings banks and trust funds.
Oil company obligations moved down
as readily in response to reduced earn
ings and the evident inability of the
industry to make any restrictive scheme
effective outside of the United states.
Amusement companies showed poor
condition reports, and their bonds drop
ped to levels commonly referred TO as
receivership prices Bonds Of copper
concerns. sugar companies. automobile
manufacturers, cement producers, news
paper publishers, traction companies
and many other clasSiflcations in the
industrial list sold down.
Only one group was exempt from this
general movement. The bonds OF the
public utilities held strongly or ad-
vanced. Their earnings were flrm or
higher in most cases both for the year
1880 and for the first quarter of 1881.
The factors favorable to an advance
in bond prices-the increased purchas-
ing power of the dollar owing to the 20
per cent decrease in commodity prices
since 1929, the continued ease OF money
rates and the huge backlog OF public
savings-kept prime issues moving up
ward. The now accepted leaders OF the
investment market. American Telephone
g. Telegraph and other high-grade pub
lie utility bonds. climbed to 4.50 per
cent yield basis. Seasoned railroad
bonds of unquestioned merit, like At
Gibson general As and Norfolk & West
ern As, advanced until their yields were
only shade above 4 per cent. United
States Government bonds and munich
pal issues moved to their best prices Of
the year.
No Further Response.
This demand for high grade bonds
was such that when near the end OF the
month the Federal Reserve Bank re-
duced its bill buying rate, thus intimat-
ing another rediscount rate reduction
and confirming the determination OF the
authorities that cheap money should
continue, the list had discounted it far
in advance and there was no appre-
ciable further response.
In the foreign department a COM
parable situation existed. The bonds of
France, Britain and the Scandinavian
countrieS-the cream of the foreign list
were in demand and their prices re-
manned firm. But in all other direc-
tons weakness of some degree charac-
terized the months movement. The ad
vance early this year in foreign dollar
bonds was entirely Offset
Brazilian bonds, affected by the low
est price for coffee in % years and by
uncertainty as to the ability of the new
Rio government to hold its grip, we're
heavily liquidated. The comparatively
conservative Argentine group dropped
8 to points when the elections in a
single province went against President
Uriburo's government. Uruguyan de-
scriptionS dropped heavily on reports
opened negotiat tons in Europe looking
to aid in servicing its sterling loans,
even though the May l service on the 6
per cent bonds was on deposit in New
York on April %. Chilean, Colombian
and other South American issues drop
ped also.
In Australia the Commonwealth Bank
refused a further overdraft to the fed
eral government, and the government
suspended payment. There was an i'm
mediate decline in Australian dollar
bonds on both occasions.
Elsewhere in the foreign list move
mentS were smaller and the fact that
declines predominated was a mirroring
of the general poor condition of bus
mess rather than of any particular sit
uation. SPANS reversion to q repub-
lican form of government created little
disturbance, except in quotations Of the
peseta. No Spanish dollar bonds have
been issued.
$515,838,O 900 New Issues.
In April new bond offerings amount
ed to $5l5, 838, 900, of which over $780,
100000 was put out in the first two
weeks of the month. At the time a
condition OF oversupply existed and
some issues. notably the New York
Central AIS and Pennsylvania AIS,
dropped to discounts when syndicate
bids were removed. The total of $515,-
$50, 900 compares with $3.50, 309 1872 In
March and 1896, 458, 63I in April, 1880.
For the first four months of the year
to date bond financing has totaled ST.
003 .550,9l2, compared with $2,564,925,-
584 in the first four months of 1880.
Though this shows a large reduction in
1t is not nearly as wide as
the decline In stock offerings, which