Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-19
OUTLOOK IN BONDS
IS HELD BRIGHTER
New York Economist Tells
Local Club He Expects
Advances.
Ely EDWARD c. STONE.


the members of the Washington Bond
Club at their luncheon today that he is
bulIish on the bond outlook.
The amount of money on hand falling
money rates, large amounts OF capital
awaiting REIMBURSEMENT and the records
of past performances under similar con-
ditions, we're some of the reasons pre-
sented for expecting advances.
Mr.. Clay, now head of his own in
Vestment service and formerly with
Moody, addressed the largest attendance
at any Bond Club meeting this year,
President Sidney Thomas, presiding. !,
The existing plethora of capital, SAID
Mr.. Clay in opening his remarks, Is
plainly indicated by the decrease oil
$500 900 600 in outstanding credit DUR
ing the Is months ended with January
1t is further indicated by the 1all IN
New York call money rates to q 10y
per cent average and by sharp lalIS III
rates charged by banks to customers
throughout the United States.
Bonds Price Factors Favorable.
Referring to bond price factors, the
economist declared that bond price
forecasting is relatively safe ana ac-
curate because of the consistency with
which these prices respond 10 known
IaHIOTS.
creasing supplies of credit and capital;
to respond invariably to fear on the one
hand or confidence on the other; and
to move day by day about nine-tenths
of the time in sympathy with stocks. All
three OF these factors are now buIllSh.'
The speaker then mentioned what he
called the bonus buncombe," asserting
that the indicated amount OF probable
borrowing against bonus certificates Is
about S700, 1000, 000 However, the month
" expenditures. of the American people
average more than 81 100000, 900. Hence
the borrowing should be equivalent TO
an addition of only 10 per cent to
American expenditures for one month.
This can not embarraSs the Govern
ment nor hurt the bond market, he
commended.
Post@deflation years, meaning those
occurring Immediately after radical
general defation of credits, have in
the recent past been 1922, 1915, 1903
and 1904. In such years capital COM
ing back to its owners from the def1a-
tion and liquidation seeks reinvestment,
and does so in large volume. 1t greatly
stimulates bond prices and even stock
prices.
Bond Issues and Sales.
New bond issues are running very
throughout the year on account of the
plethora of capital. They seem likely
to total 5 billions for the year, against
an average of the past two years and
the high record of So in 1927. Refund
ing promises to total about l.5 billions,
against GA last year and a high record
of l.57 in 1927. The price of capital
Is declining and bound to continue
doing so at least until the late Autumn
Of 1882, Mr.. Clay said.
New York bond sales have definite
seasonal movement, especially in post
defation years. They should expand IN
May, show dizziness in June and July;
nearly double from July to November,
and hold most of their gan in Deem
Der and January. I'VE may confidently
expect a very active year in listed
bonds" the economist predicted.
In past years like this a general
average of bond prices showed rise
Of nearly points from March to
December. The average seasonal ten
dency in such years has been steadily
upward each and every month from
April 10 December, inclusive.
In conclusion Mr.. Clay touched
briefly on the popularity OF stocks.
This popularity" he said, has been
temporarily. impaired Blythe stock mar
ket panic and the slump in earnings
per share. More important is the fact
that it has been permanently impaired
by the stoppage of our gains in gold
holdings, by the great reduction in the
annual increase in American national
income by the exhaustion of creative
thought arising out Of the war, and by
the downward secular trend Of COM
modify prices"
Utility Stock Offered Here.
wsggaman, Brawner s, Co. Inc. are
offering the class A stock of Central
Public Service Corporation, which, &C
cording to an announcement by Albert
z. Pierce, president Of the company,
has entered into a management con-
tract with the Washington Gas Light
Co. This stock is actively traded in on
the New York Curb where it is cur
rently selling about 1912. II reached
q high Of Sta and low of 20 in 1929,
during which year valuable rights were
given TO stockholders The stock has
paid 3 dividend of 10 per cent in stock
sinG 1925.
Local Banks Vote Dividends.
At a meeting of the board Of directors
OF the Security Savings G. Commercial
Bank yesterday, the regular quarterly
dividend of 4 per cent was declared
payable March 81, to stockholders Of
record Marcn 20.
Directors of the Mount Vernon Saw
ings Bank have declared the regular
quarterly dividend Of y per cent. The
disbursement is payable March 81, to
shareholders Of record March 25.
Washington Gas Light bonds led
quiet trading on the Washington Stock
Exchange today. Sales in Capital Trac-
ton SIS were also recorded. Mergen-
thsler and Potomac Electric Power 6
per cent preferred were the only issues
attracting attention in the stock di-
vision.
Student Bankers in Contest.
In the public speaking preliminary
contest last night at the institute four
winners were chosen 70 enter the finals
next week. They are Aubrey o, Dooley
Federal-American National Bank q
Trust Co., and H. +. Kimball, Arthur
Woodcock, all Of the American Security
& Trust Co.
The judges were: E. j. McQuade.
vice president Liberty National BanE,
RAYMOND B. Dickey, dean Of the insti-
tute faculty, and DR.. George L. Farm
ham, who conducts the institute class
in public speaking.
The Security Club of the American
Security g. Trust Co. viii present theil
annual Spring pay at Wardman Park
Theater, Wednesday, March 25, under
the direction Of j. j. Hoffman, with 9
cast of II persons including:
Ella Lee Sewers, Ellen &. Crawford
Marguerite Detterer Ruth P. Lucas
M. c. Breithaupt. Ruth II. Gochenour
Paul L. Vanderbilt, Roberta M Offutt
I. r. M. Biglow. Frances H. Carric.
Donald W. Nowbray and Drayton c
Mayors.
Garage Market Officers Named
Permanent officers and directors OF
the Kent Automatic Garage e. Wash
inpton Market Corporation. which ex-
poets TO build an extensive garage and