Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-31
Special Dispatch to The Star.

Special Dispatch to The star.
NEW YORK, March 31.-Notwith-
standing the investment markets fall
ure In March to put on the ,buoyant
upturn which has been freely predicted
for 1t in recent months, encouraging
signs of the approach of broader de-
mand for bonds are In evidence.
The markets improvement, 1t Is true,
has been slight Measured by Standard
Statistics index of 80 bonds, there has
been but a fractional gain in the past
month. But trading has been in some
what heavier volume than in either
January or February, and such new
issues as were offered in March were
quickly distributed. These last were
mostly of a high order of investments,
but, nevertheless, their speedy absorp-
ton revealed a demand for long-term
bonds somewhat greater than the mar
ket has seen in the past IL months.
The influence of the stock market
has been more or less negative, except
in so far as its periodic advances have
radiated a new optimism, based on the
temporary improvement OF commodity
markets in midmonth. 1t was also sig
niflcant, toward the end Of the month
that stocks were not sharply depressed
by the break in wheat. Another indica-
ton of the new sentiment was the much
greater emphasis laid on the small ad-
vance of copper prices early In the
month, as against the indifference OF
the security markets to the cut in the
third week of March.
Long Term Outlook.
The long-term outlook for invest
ments remains bullish. Every argumeie,
that can be mustered points to higher
level for, senior securities. Inventories
all over the world are at almost I'M
precedented low levels. Produce in the
hands of the public, such as automo-
biles, clothing. furniture and other ne
cessitieS of life, which in times OF de-
preston has been used to Tar greater
degree than would be the case in more
cheerful days, is near the replacement
stage, and public buying on moderate
scale. at least, can be anticipated for
the immediate future.
There Is an abundance Of money. 1t
Is back now, in so far as call and time
rates are concerned, to the low OF the
year after having had q slight tighten
ing, owing to the Government financing
early in the month. As matter OF fact,
though the Government deficit proved
much larger than the market antici-
pated, it is not now considered likely
that there will be any increase in taxa
ton. The Governments financing early
this month revealed the heavy demand
for short-term Government paper ana
also for long-term bonds up to 10-vear
naturities. With such demand still in
existence, Secretary Mellon must IN
evitably follow the line of least resist
ance and bridge the gap between reve-
nue. and expenditure. with more short
term financing.
Recent Issues.
The success of New York City with
its $100, 000, 900 of IA per cent 50-year
corporate stock, on which it received a
premium of nearly $4,000, 900; the rapid
dispersal Of the New York Central and
PENNSYLVANIA Railroad issues and OF the
sec, 900 900 Port of New York issue and
the comparative ease with which GER
tain Junior bonds were absorbed just
about reflected the temper OF the mar
ket.
It is true, Of course, that the abb
sorption of the new issues was not &C
complished without some Oppressive ef-
feet on the outstanding list, but this
was merely temporary and only served
to show that investors still view the
long-term market with great deal OF
conservatism.
Another sign Of the recovery soon to
come can be found in the action Of
junior securities during the month.
Second-grade railroad bonds, the adj
justment issues of one or two carrier
systems whose earnings have shown
wide declines, obligations Of industrial
companies whose 1880 earrings were OF
from 30 to SO per cent and foreign dol
Lar bonds all revealed the operation OF
a speculative interest. Without the at
tention Of this group Of traders this
section Of the market had remained at
the bottom for many months, and 1t Is