Evening star., 1931-04-05
Special Dispatch the The Star.

Special Dispatch the The Star.
NEW YORK, April 4.-The bond
market by easy stages has declined to
its lowest point of the year. that of
January 2. Standard Statistics index
Of 80 representative bonds equaled that
figure, 96.2. on Thursday However
this may be interpreted, there cannot
be other than d bulliSh construction
placed on the markets ability to alb
sorb new bond issues.
During the past week, $114,710, 900
of new bonds were distributed in ad-
dition to over $1,000 1000 of United
States Treasury short term bills The
total compared with $140,606,1 100 last
week and $85. 100000 in the same 1880
week, bringing the March total close to
500, 100000.
New Offerings.
One Of the chief reasons why these
large amounts of new capital have been
provided without unsettlement is that
no effort has been made this year, as in
1880, to push the market beyond its
limit New offerings have been priced
close to the market and not to d
points above it, as was the case year
ago. The result has been that new
offerings have been we'll taken and
there has been an almost total absence
of those sudden and wide declines
which followed the dissolution of un-
derwriting syndicates last year.
Thus the flow of money into industry
is gradually being enlarged as the in
vestment market is permitted to seek
its own levels. Sooner or later this
must result in better tone all around
for bonds, but for the immediate future
much remains to be done. The con-
tinuaF poStponement of large pieces of
utility and industrial financing casts
shadow over outstanding bonds. But
at the same time public saving is pill
ing up and surplus funds have been di-
verted into high-grade short term
paper, such as Government certificates.
When public confidence in business re-
turns it may result in less demand for
Governments and it will at least enable
bankers to do the financing that is nee
esSary for the expansion of industry.
Even now. this evolutionary process is
going on, though its effects are hardly
measurable. The Treasury this week
paid LAG per cent for short-term ac-
commodation similar to that arranged
in December for less than / per cent.
This was partly due to the bullish furry
in stocks since the turn of the year,
which reflected signs that the down
turn in commodity prices had reached
an end, and partly due to the Treas
the greatly decreased revenue from the
income tax. Whatever the cause, the
yield on treasures was increased and
some funds moved into other securities,
such as municipals and prime corpo-
rate obligations.
Domestic Issues.
During March electors, in various
States and municipalities, approved
$46.6l0994 of new bonds, compared
with $33.741 500 authorized in March.
1880. The daily bond buyer reports
this figure as the largest March total
ever recorded. At the same time re-
jections are smaller.
Domestic issues held to two courses.
In the first place, bonds on which in
terest payments and sinking fund serv-
ice are covered many times by earn
ings of strongly intrenched companies
we're in demand and worked toward
higher levels. Secondly, junior issues
of companies whose dividends have
never be2@ cut or omitted, or whose
earnings have shown future wide de-