Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-25
Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, January 24.-In several
respects this have been an eventful week
in the market for high-grade invest
ments and for speculative bonds. Prices
have been higher. Institutional demand
has been keener. New issues have gone
we'll. The activity among dealers has
at times been greater than since the
boom period In 1928. Domestic bonds
have touched a ney high average for
the year.
This latter fact does not tell the. whole
story of the change in the price tend
ency that has occurred in the last few
weeks. United States Liberty fourth
4Hs, the Treasury As and several other
Government obligations have been at
the highest for some time and the first
named within IA point of the top flg-
ure ever reached, that of March, 1927.
When the syndicate offered New York
Central Equipment Trust certificates on
Thursday to yield only 4 Is per cent for
the long maturities, it established
new price basis for this type of security
and one that has not been equaled In
many years. United States Treasury
notes due in March have been quoted a
little over a per cent basis and those
falling due in September and December
between u and u per cent.
Ease in Money Rates.
This all comes about from the ex-
treme ease in all forms of money, run
ming from the ! per cent outside call
rate to the rate of IL per cent for
60-day loans and per cent for loans
coming due late in the Spring. The
banks have been piling up an enormous
amount of money since the first of the
year. 1t is now problem what to do
with their funds in order to make them
earn most and at the same time pre-
serve the highly liquid position which
they established at the end Of 1880.
New offerings this week have aggre-
gated about 500, ZOO, 900 compared with
nearly two and one-half times that
much the week previous. They have all
been of type that attracted the insti-
tutional rather than the individual
buyer. Prices have shown a tendency
to move above rather than below old
issues. This has had beneficial effect
on the general list which, week ago,
was disturbed by reverse policy. Most
Of the new offerings of the gilt-edge
variety have been able to show a pre-
MUM after their issuance.
An attempt was made during the
week to revitalize the market for second
grade bonds. AS O step in this direction
and per cent railroad refunding mort
gage issues anywhere from to 3 points.
It was in this group that the largest
declines occurred in December. The
market for all of them is a narrow one
and is sensitive to purchases or sales of
q substantial size. Convertible bonds
were also strengthened by the generally
flrm tone Of many corporation stocks.
Second Issues.
The problem of the market is now
limited to issues Of the secondary grade.
The future of those of the first rank can
be fairly well forecast. They will be
strong and perhaps higher so long as
money rates remain at their present
average. The banks desire them. There
is no inclination to sell them, even when
they show a small profit. On the other
hand, bidders are lacking for anything
that does not have an AAA or an "A
rating The outlet for bonds of this
type In moi hal times would be in the
portfolios Z the large metropolitan as
well as the interior banks. They show
no disposition "a buy them now. II =
doubtful whetheS the1 viii change their