Evening star., 1931-12-01
BONDS ARE LOWER
AS STERLING SAGS
Wall Street Watches New
Break in British Pound
With Interest.
BY r. H. RICHARDSON.
Special Dispatch to The Star.

Special DlSp8ICn 10 Inc 6tafs
NEW YORK, December bonds
downward along with the sharp de-
cline in stocks The attention OF the
Street was centered on the new break in
sterling, which brought that currency
to its lowest since England went on
the gold standard. while o consider
able amount Of mystidcation was mani
fest In regard to the new decline, it
was pointed out that. sterling normally
Is under heavy seasonal pressure in
the Fall and that this year, with ex-
traordinary imports rushed ahead OF
support for exchange quotations, the
break has been abnormally severe.
At any rate, British S12s, with q de-
cline Of around 2 points, hardly re-
fiected the olninouS Interpretation that
might be placed on . quotation Of
sterling at q 80 per cent discount In
terms Of dollars.
Canadian Exchange dropped to a II
per cent discount, or its lowest on the
current move, but here again Canadian
government and railway bonds, while
lower on the day, did not fully discount
the sag in exchange. It was reported
that the Canadian railroads would an
nounce q wage reduction today. Me-
rierS and the unions have been going on
for some weeks.
Definite announcement that service
was being paid today not only on Ger
man government 511s, but on q long
list Of German municipal and corporate
obligations resulted in better prices for
these issues for q time. The general
pressure, however, subsequently resulted
In dips ranging from fractions to around
a point in Young Plan 512s, Reparations
Is, German Central Bank issues and a
few municipals, such as Berlin 6s and
Prussia IS.
Most European issues Of Specula-
tive nature were also lower, including
Poland Is. Kreuger q Toll IS were on
nearly points to . new low. Estonia
Is were flrm on the report that sinking
fund service had been met.
Japanese issues were under pressure,
with heavy sales Of Japanese govern
ment SIS. These were OF about 2
points at one time, but later rallied.
The 615s were q point lower. The
Manchurian situation looked consider
ably better.
South Americans were little changed
nouncement Of sinking fund service on
the IS due June l, 1853. Urguayan Is
sues were sluggish.
In the domestic list, railroad bonds
were again under the heaviest pres
sure, notably New York Central refund
ing IS and Pennsylvania ANS. Sharp
losses also occurred In Alleghany Cor
poration IS, Atchison general IS, Bal
timore q Ohio AIS, Chesapeake Cor
poration So, Erie IS, Denver 81 Rio
Grande Western S.. Great Northern Is,
Nickel Plate 6s and others. Indus
trials were quiet and inclined to sag.
Prime iSstIeS were hrm.
Foreign dollar. bonds broke sharply at
the opening.
Great Britain 51as, OF nearly 2 points,
were at Q new low for the bear mar
ket. This decline, together with others
In the Canadian and Australian groups,
reflected today's fresh break in sterling
exchange, which also hit q new bottom.
Japanese issues dropped fractionally.
italian bonds were OF . point or more.
Germans, mirroring definite announce
ment Of the receipt Of December serv-
ice on the Young plan and other Ger
man loans, were steadier.
Domestic railroad bonds started hrm,
but, with q lower stock market, soon
lost their initial advances. Missouri
Pacific IS, Erie 5s and other speculative
types were little changed after the first
quarter hour. 1ndustrialS were steady.
High-grade issues lost narrowly.