Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-31
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK. May 30.-In the past
week bonds dropped down to new low
levels for the year in every depart
ment except the small group of high
grade issues. Standard States index
of 80 bonds dropped well below the
previous years low of $50. This was
one of the most active weeks OF the
year in point of volume.
The heaviness of the trading, how
ever. was not caused by any unusually
large blocks or heavy trading in any
one issue, but by the marking down
of many inactive issues to the levels
to which the list had drifted in the
past month. It was cause Of wide
comment in the Street that price de-
clines were so wide compared with the
volume of offerings.
Foreign List.
In the foreign department such
bonds as Argentine IS and Chile IS
$4,000 or $4,000. German Govern
ment 512s-the Young loan so widely
heralded when it was offered here at
90 Just q year ago-declined more than
4 points on the sale OF comparatively
few bonds.
The domestic list was filled with
similar soft spots, where bids were far
below offering prices and, with the
incipient cautiousneSS affecting the
market. were withdrawn on the slight
est pretext. st. Louis-San Francisco
4As, for instance, dropped q total Of
points on the sale Of less than 100
bonds. ST. Paul SIS, Erie SIS and Nickel
Plate 4l2s had similar wide down.
turns on small sales. Industrials and
public utility issues of less than the
highest grade had narrower but sub
stantial losses under the same cir
cumstances.
Except in the case Of the foreign
dollar bonds, it was hard to find a
definite reason for such panicky SELL
ing. The stock market, it was true,
dropped into new low ground each day.
Earnings reports disproved the theory
held earlier that April would show a
check in the decline of business. But
these same factors were present before,
and there were a few bad breaks in
the bond list by issues which are not
in any doubt as to interest and sink
ing fund payments.
There was no doubt that the
individual investor was in q frightened
forced liquidation by investing corpo-
rations, such as banks, companies need
ing to cash part of their reserves and
insurance companies endeavoring to
safeguard their portfolios.
Break In Argentine Bonds.
In the foreign department, the fea-
ture was the wide break in Argentine
issues, which sagged to levels showing
a 80 per cent depreciation in the whole
group since the revolution. Since there
are about 100000 of Argentine
dollar bonds outstanding, this means
loss of 1927, 900 900 to American holders.
Everything in the Argentine situation
that might cause such wide break in
the bonds has been known for some
time. It Is a generally accepted fact
that the Argentine government will
show q big deficit at the end Of the
fiscal year and that some drastic meas
ure must be undertaken to meet both
it and the $50,000,000 of 5 per cent
notes maturing october in New York.
But the Argentine government is max
ing every effort to overcome the diff
culties and has issued an offlcial state
ment that interest and sinking fund
payments will be kept up.
In the case CT Chile, where similar
depreciation has taken place, the opin-
ion of Prof e. H. Kemmerer, who re-
Gently completed economic studies of
Chile, Colombia and Brazil, Is. that
the bonds will We seruced. He holds the
same opinion o. Colombia. Prof. KEN