Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-28
BOND SALES DROP
ON PRICE DECLINE
End of Bear Market in De-
bentures Is Seen by ~
Observers. A:

Special Dispatch to The Star.
NEW YORK, November 28.-The sig
nificant phase Of the current liquida-
ton of securities, so far as bonds IRE
concerned, is the sudden contraction of
the volume of trading The LIQUIDATION
of the last three weeks, which has cent
the price average of the market down
more than 5 points to the lowest level
since 1921, was accomplished in4 a
volume OF trading almost as low as that
of last August 3yoa,
Wall Street sees in this development
the approach of the end Of the bear
market in bonds. Those who bought
bonds around the October lows-when
trading was in heavier volume than 1t
was even in the hectic days of October,
l929-are not disposed to sell their
holdings, and those who bought. at
substantially higher levels have either
been forced out of the market or have
put their bonds away for the long pull.
Sales Volume Figures. -
This may be illustrated by examining
few figures of sales volume. In Octo-
Der bonds traded on the New York
Stock Exchange totaled $3.50, 49,, a5Q,
compared with 1851 100000 in October,
1929. Sales of bonds on the New York
Curb Exchange for October this wear
S57, 288, 900 in october, 1929. On both
exchanges October's bond trading was
heavier than that of any month since
1927, and on the Stock Exchange Octo-
ber's business has been exceeded only ID
times in the entire history of the ex-
change, including the months during
and just after the war. when the huge
Liberty loans were so actively traded.
Now, during this period of heavy
trading, the average level of the bond
market, as shown by Standard Stats
tics index of so bonds, declined from
September's high of 92.4 to 80. Daily
sales on the Stock Exchange were run
ming from $12,000,000 to $15,000,Q00,
compared to 100000 or $8,0O000O
daily in August and early September
Trading increased in volume when the
market staged its late October recovery,
and the index of go bonds climbed from
80 to 84.8. ~
AS the market approached its peak
on the recovery, however, sales again
fell off. From the October peak of $99,-
295, 500 during the week ending October
3, the totals by weeks were: October 10,
500, 1913, $50; october II, $77,171p00,
and october "a. ST., 7So, 400; About this
time the bond market established its
peak. Then volume tapered off IN a
surprising manner. In the week OF
October 81 sales totaled only SOS, 138,-
100. The following week they slunAped
to $57 300 and during the week Of
November IA rose to $64 ,901 500, but In
the third week of November they
dropped to $50, 803 ,000. This week daily
sales are down to the 100000 to So
which, with its total of $188, 100000,
was the quietest month for bond traders
since 1929.
October Low Broken.
The market has now broken its Octo-
Der low and is below its 1921 bottom.
Some railroad bonds are at lowest
prices in their history. Others are selling
at prices comparable with the depres-
sions of the 80s and COS and the panic
of 1907.
But bond trading has dropped to
such unimportant dimensions that little
significance can be attached to such
prices. Northern Pacific 6s-a WE'LL Sc
cured issue of railroad which has no
large maturity to meet for many years
to come-dropped points on the sale
of % bonds out of the $107, 900, 600 but
standing Rock Island General Is lost
Ia points on the sale of 10 bonds
out of SOL 500, 600 outstanding. Penn
sylvania Railroad Consolidated 4l2s
slumped 212 points on the sale Of Is
bonds out of an issue of $49.o00O0O:
Thus on the sale of $4,000 worth Of
bonds, railroad mortgages of unqiIes-
toned integrity have been written
down $6,620,O00. It seems needless that
, investors should be forced to sacrifice
their holdings at such levels for :the
lack of even moral support from sthe
sponsors of the bonds involved.
End of Selling Seen. ::
without going into the economic sit
uation at home or abroad, it appears
to observers that the selling Of bends
is now coming gradually to an end.
The decreased volume of trading this
week indicates that the normal rein
vestment demand that is the backbone
of the open market for bonds is not
being satisfied and must, sooner or later,
provide support for the market.
1921