Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-01
BY F. n. RICHARDSON.


| Special Dispatch to The star.
NEW YORK, August 1.-The month
Of July witnessed violent fluctuations IN
the foreign dollar bond market spec
tscle that has become a familiar &C.
compartment to the bear market.
The month opened quietly enough,
with foreign as we'll as domestic bonds
still depressed from their June decline,
but the list burst into violent activity
with the first detailed announcement OF
President Hoover's debt holiday scheme.
advanced rapidly up to and after its
contamination in the Paris agreement
and then slumped with the negative
outcome of the London Seven-Power
Conference
German bonds, for instance. had slid
over 40 points before concerted action
by the powers promised some banking
relief in the Reich and then recovered
probably a quarter Of the losses. But
at the end OF the month virtually all OF
this recovery had been wiped out. Both
Lombard street and Wall Street had lit
tie faith in the efficacy of the measures
adopted at London to see Germany
through her crisis, or in the ability of
the committee to be appointed by the
| Bank Of International Settlements" to
get to work rapidly enough to stave off
the catastrophe seen In the wake Of the
, London meeting.
Reduction IN Values.
The story Is better told in figures
When the market had discounted the
German banking crisis-which in
volved the failure of the third largest
institution in the Reich-the reaction
had wiped out 3e792.91O in market
value of the $1,000 251 900 Of German
obligations outstanding In this market.
The fluctuation of this group of bonds
between the highs and lows OF the
| month alone accounted for S4lS,960.-
320 in dollar bond values, Very little
Of this vas recovered in the closing
DAYS Of the month
At the same time the world wide eff
fects of the German crisis had brought
ltqu1da ton into every other foreign dol
lar security regarding which the slight
est degree of uncertainty was enter
tanned. There was q depreciation Of
SIT S3S.S00 in Argentine bonds, Of
SIS ,940, $50 in Bolivian issues. of S195,-
10000 in BraziI's credits, of sos. 472. $40
in Chiles oblgs tions, S7s.915.4s0 in Pc
ruvian bonds. $26,o71 200 in Uruguavan.
sl51 .a13, 400 in Australian, S12 ,396, $50 In
Austrian. SALT $40 in Hungarian, s54,-
986,950 In Polish. $40, 7o0,000 in Ru-
'.An~Ai.nhA S4tU 9SE'oOOs&&S i3& Subati Nv
scriptions
There was, IN toto. a loss of
81 .s51 $4,000 facing the holders Of
foreign dollar securities in this mar
ket. The high and low points during
the month In this same group stood
s1.1so.s79,71 apart And this huge
varia ton in values occurred in an
aggregate Of s3.61s.s29,o 600 par value
Of bonds
IL r,~,,II l.. ....G l. 1T.
these enormous losses entirely TO the
stance, had an abortive revolution on
her hands. Uruguay's bonds we're IN
settled by the governments budgetary
difficulties Chile declared a partial
moratorium ewing to the heavy cost
of buying dollars With which to pav
debt service when Chilean CURRENCY
was so far below par. Other South
American countries were expected to
emulate one or more Of these examples.
cultles and not all of them we're roper
cussions Of the German bank failures.
Pessimism Rife.
resstmlsm was SO strong at times
during the month that more than de-
serving attention vas paid to cahled
reports that China would GO TO war
with japan. japanese bonds we're
actually depressed noticeably on these
reports At one time, also. there was
quite heavy liquidation of French,
Belgian and Scandinavian issues. of
the safety of which no one has any
serious doubt
In many respects the situation was
analogous to the state in which France
found herself inst little over I'VE
years ago, Then French government
Is were selling at about the level to
which German government Is have
recently dropped. French runicipals
such as Lyons and Bordeaux IS then
sagged TO levels not much better than
those Of Berlin and Prussian SIS today.
True. the basic causes of the two crises
were different, but IN many surface
manifestations they we're the same
Few could be found in 1928 and 1925
Who had a good word to say for French
securities. Bids were then far below
the market and declines Of TO 6
points between sales were common
That is exactly how German securities
are regarded now,
No one can doubt that eventually
German Is will have the ranking that
French Is TO-DAY enjoy. with market
quotation OF 11s. Mark exchange,
which had dropped heavily in mid
month, recovered near the month end
Although 1t was evident on July 70.
when the London Conference adjourned
! that the German government was hav-
ing difficulty in applying its artificial
measures to keep mark quotations above
water. and although the increase of
the Bank of England rate was further
/ evidence Of the uneasiness in Europe.
/ the fact that Germany was helping
herself was better news to the market
than all the oratory loosea at the
! London meeting.
The domestic market can be dis
missed with a. few words. II fiuctuated,
! sometimes quite widely. as each develop
| ment OF the foreign situation was made
known. But In the end StandayS
Statistics index of 30 representative
bonds stood Just about where ii was at
the beginning Of the month In other
| words, prices remained fairly steady.
This course Of action was taken from
| a stock market that showed all month
1inmistaksble signs of a desire TO ad-
| vance. Junior bonds were well sup
, ported on every dip.
Railroad Earnings.
A. a matter of fact. there was much
In the domestic situation that argued
for better trend to security prices.
Railroad earnings for June. II was true.
were off about IS per cent. but even
this poor showing represented a check