Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-05
BONDS ARE STRONG
BUT TRADING QUIET.
investments Going to High
Grade MunicipaIs, Govern
ment and Short Term Paper.
BY F. H. RICHARDSON.

Special Dispatch to The star.
NEW YORK, May 5.-Bonds were
strong today in quiet trading.
Now that the investment market, for
two consecutive days, has been freed
of the influence of forced selling COM
ing from the stock market, and also
the Oppressive effect OF weakness IN
equities, some appraisal may be made
of the current investment trend. While
prices have responded readily to the
buying, there has been little volume IN
dealings and it is apparent that the bulk
of funds seeking investment from saw
ings banks. insurance companies AND
other corporate investors are still going
into high-grade municipals. United
States Governments and prime short
term paper.
An instance of this today was the
quotation of Liberty first 414s at lev
els yielding less than ~ per cent per
annum. This buying, Of course, Is predl-
Gated onothe theory that the Liberty
loan willObe refunded on the call date.
June, 1882. This certainly has been the
TreaSury's plan, but whether it will be
able to do it or not depends on the
market
Intimation by the Treasury Depart
ment today that another long-term
loan was in sight emphasizes the fact
that the Treasury has more than
81. 600, 900 900 in short-term paper fall
ing due between July / and December
is. When the soldier bonus agitation
was at its height 1t was reported that
the Treasury would not be able to
refund the Liberty loans callable In
1882 and 1888
The municipal market today received
the announcement that Asheville N. c.,
and its county, Buncombe County, have
defaulted on May l service on funded
debt. The county was hard hit in
recent months by bank failures. Against
this glum news, however, San Fran
cisco sold $10.400, 900 Of AZ per cent
bonds to a First National Bank syn
dictate on Ala per cent cost basis
to the city. MunicipalS are in keen
demand and dealers are convinced that
Asheville and Buncombe County will
be able to pull through with banking
help, just as the State Of Mississippi
did recently.
The tendency to buy only the best
of bonds was shown by the action Of
Bush Terminal IS of 1855. which today
were 81 bid. or nearly 18 points below
recent levels. The issue, while not
a prior lien on the company's prop
was covered by earnings 3.03 times
fixed charges in last earnings reports.
However, there was speculative buy
ing in many junior bonds. among them
McKesson & Robbins 5laS, Warner
Bros. Pictures IS, Utilities Power &
Light SIS, Frisco A As and 4l2s, Shell
Union Oil SIS. Missouri-P IS. In
ternational Telephone 41as and Cen
eral Theaters Equipment IS.
Prime issues were firm at their best
levels of the year. Atchison General
As sold at par. their best price since
1912. American Telephone IS and SIPS
reached to new 1881 tops. The same
was true of other high-grade rail and
public utility emissions. Time money
was easy and in plentiful supply at 134
per cent for 90-day loans.
In the foreign department there were
wide gains in many recently depressed
bonds. notably Uruguay IS and 8s,, Sac
Paulo rs. Peru IS, Medellin SIPS, New
South Wales IS, German Central Bank
IS. Finland 612S. Buenos Aires 6l2s. Bo-
livia IS, Australia IS and Argentine IS.
Italian bonds were firm, rejecting the
announcement that the Italian cabinet
had approved issue Of a new per cent
internal loan Of $209, 200, 900 in nine
year treasury bonds at 95. The loan
will be exempt from taxes. German is
sues were unchanged to fractionally
higher.
(Copyright, 1917