Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-30
INVESTMENT BOND
MARKET Stronger
Railroad Group Proves Fea-
ture of Week, With Spec
taCuIar Advance.
Special Dispatch to IN. star.

Special Dispatch to The Star.
NEW YORK, August 2s.-It Is a
tradition in Wall Street that the bond
market when it turns. always does so
In the middle of the week This week
was no exception for the list, which was
heavy on Monday and Tuesday, turned
on Wednesday, advanced broadly and
actively on Thursday and at the end
Of the week was still pushing ahead.
The index of so bonds, as prepared
by Standard Statistics. which had
dropped to a low Of 916, was back
again to 90 at the end of the week.
This was not as representative Of the
advance, probably, as the recovery of
the index of 20 railroad bonds This
had touched 9l.3, the lowest since the
1920-1e2l depression and as the week
closed it stood at SO.
Spectacular Advance.
The advance of the carrier group
during the latter half of the week
was as spectacular as the decline in
the first half One of the significant
features of the decline had been the
exceeding thinness of the market. Mis-
souri, Kansas Texas adjustment bonds,
for instance, dropped Is points on sales
Oh Only S1O,ODU. oOubklGIH runway O12S
lest points on sales of $4,000. But
on the recovery prices advanced as
rapidly on few purchases. Missouri
Kansas-Texas adjustments recovered
nearly all of their loss on $4,000
deal and Southern Railway 6l5s climbed
back S points on transactions involv-
ing only $4,000
Such movements, which were gen.
eral throughout the rail list, are char
acteristic of a thoroughly liquidated
market, which moves down swiftly on
few offerings, because buyers have be-
come nervous and have withdrawn
their bids in an effort to reach fast
diminishing offerings.
There was no doubt that carrier
bonds had been much overSold. Some
which we're forced below 40 cents on
the dollar are still on the list of bonds
legal for investment by savings banks
and trust funds in New York State
Still others, which have dropped to 10
points, are underlying mortgages of
railroad systems which, while their
earnings are reduced in 1881, have large
cash reserves, small funded debts and
no important maturities for long term
of years ahead.
Traffic Reports Awaited.
The continuation of the advance de-
pSnQS largely on now August JtdAAS
reports compare with the poor showing
in July, when net operating revenues
for all class l railroads were down
nearly 40 per cent. The Interstate Com
merce Commissions decision on the
lafreight rate application Is not expected
until mid-Septemb2r.
One significant characteristic OF the
investment market for weeks past has
been the comparative steadinesS of sec
ond-grade industrial bonds during the
rapid decline and subsequent recovery
OF railroad issues. United States Rub
Der IS have ranged firmly between 6715
and 20. Goodyear SIS have fluctuated
between 80 and 81. Goodrich 6i5s have
found their range between 81 and 90.
Vanadium Corporation IS kept within
781sae0. Inland Steel 41as moved be-
tween 1884, and IS. Paramount-Publix
5lks have he'd within 75a80 and Pathe
Exchange rs between 90 and 95
InduStrials and public utilities have
served to give reinsurance to those who
expected all bonds to give way with the
rails. It is perhaps fair to say that,
forgetting the rails for a moment. the
bond market has been steady and has
acted exceedingly well throughout the
recent minor bear swing The demand
for high-grade short term paper is un-
diminished, as witness the four times
oversubscription Of the Treasury's last
offering of 90-day bills at an annual
bank discount rate Of so per cent.
(Copyright, lpaI.l