Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-12
INVESTMENT BOND
MARKET STRONGER
DURING LAST WEEK
Sentiment improves on Belief
That German Credit Will
Be Assisted.
Special Dispatch to The Star.


NEW YORK, July lin the early
part of the week in the investment
market. every one stood by to see what
| effect the definite agreement on Pres
! ident Hoover's debt plan would have
! Toward the close of the week the mar
ket had an uncertain tone because the
! agreement had not, as expected, en-
tirely stopped Withdrawals Of short
| term credits from Berlin. This had
been the main object of the plan-to
stop the run on German credit, avert
a collapse of the Reichsmark and thus
lay the foundation for German re-
covery.
When these Withdrawals persisted
End it became evident that quick ac-
ton was needed to prevent a banking
crisis, both stock and bond markets
reacted. German Government 5la per
cent bonds-which have reflected the
investment markets opinion of what
was occurring in Europe more accurately
probably than any other barometer
/ dropped to new low on the move
mont. Other foreign bonds followed
suit.
Sentiment Shifts Suddenly.
These developments gave pause to
the overopt 'mistic element and a wave
| of uncertainty developed. It was
obvious that Washington, London and
Paris, having set their hand to the
! pillow, would not turn back and leave
; the rest of the furrow unfinished. But
! it was hard to convince the markets
| here and abroad that DR.. Hans Luther
could, by the mere asking. secure the
| h. To-,
| to set the affairs of the Reichsbank
and Germany in order. Withdrawal of
"devisen," or foreign exchange, had
reached the alarming total of nearly
1000 100000 reichsmarks since the first
! of July
| However. on Friday sentiment shifted
| abruptly to the other side, and German
bonds had vertical recovery, on the
| expectation that the Reichsbank would
receive aid. Bonds were quick to fol-
! low the lead of the fast-moving Ger
man group.
| During this period the domestic bond
market acted with significant firmness.
When stocks reacted in midweek and
| foreign bonds were breaking rapidly,
| the Junior railroad and industrial list
held closely to its previous level. Trad
ers became impressed by the perform
ance Of bonds such as Erie SIS, Missouri
oSAIS Oo' NlChcl HIdLe 4t2S, UnlLeO
| States Rubber SIS, Goodyear SIS. Shell
Union Oil SIS, Texas Corporation SIS,
Paramount-Publix 512s, Famous Play
ers IS, International Hydroelectric IS
and International Cement SIS. There
was not one of these that did not in
June break badly with the stock mar
ket. and it was natural to suppose that
If the markets conception of conditions
warranted broad downturn, then such
bonds would go with it. They did not,
! and at the end of the week spectators
started to pick them up in fair guam
titles largely because of their previous
HrmneSs.
Domestic News Better.
Quite apart from this, the news at
home was better. Confidence did not
sink to its low mark of June. despite
temporary reverses in the foreign stu
alton. 1t was true that both cotton
and wheat had sharp dips, but few
doubt that there is any reason behind
these except the after effects of govern
, mental market operations. Wheat as
matter of fact, with a Canadian gov
eminent condition estimate of So per
cent against 90 per cent year ago, had
a good reason for advancing.
(COpyright.