Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-26
INVESTMENT BOND
MARKET IS LOWER
Feature of Week Has Been
Revival of Interest in
New Issues.
Special Dispatch to The Star.

opSCldA DASpdbbi " 4HC 0taA.
NEW YORK, July 25.-Apart from
the disappointment manifested by the
investment market in the results of the
London Conference on the German
crisis, the most significant occurrence
this week was the quickening Of inter-
est in the new-capital market. 1t car
ried more emphasis because it came at
a time when trading in stocks and
bonds was at the lowest level of activity
in five years.
Naturally, the negative outcome of
the London meeting was reflected in
lower prices for bonds, both foreign and
domestic. Disappointment was expressed
almost universally and the decline III
German bonds to new lows since their
recent recovery was simultaneous in
New York, London, Paris and Berlin.
For the market as a whole, however,
it was more a case of inactivity than of
price changes. Comparatively speaking,
prices held surprisingly well. They did
not duplicate their June lows, at least,
and the market was so thin that in the
case of some German industrial bonds
losses Of 16 to IS points were caused
through the sale Of fewer than 10
bonds.
The fact that offerings of approx
mately $7,500,0o0 in bonds, which had
been on the books of floor traders, were
withdrawn showed that the time had
come when investors-both Institutional
and individual-felt that it would be
like throwing money away to sell at
prevailing prices. 1t was noticeable
that all markets were thoroughly
liquidated.
Bank Rate Advance.
Probably the most direct appraisal
of the London decisions was the ad-
vance Of l per cent in the Bank of
England rate. It Is true that the in
crease was not duplicated by the New
York Federal Reserve Bank, but it was
evident that this was due to the banks
closer relations with the Bank of Eng
land. An advance in the New York
rate would have rendered the higher
rate in London ineffective in its sole
purpoSe-to check the flow of gold to
France and America. No small amount
Of satisfaction was expressed at the at
titude Of the New York banks in alb
staining from shipping gold from Lon
don to New York when foreign ex-
change quotations made that operation
profitable.
1t was somewhat surprising. there
fore, to find a number of new public
utility bond issues very quickly alb
sorbed. Bond underwriters themselves
were pleasantly surprised. 1t was dis
covered that there was broad demand
for high-grade new bonds and more
acute demand for, high-grade Short
term paper than at any time since the
start of the bear market in October,
1929. The United States Treasury sold
two patches Of 90-day bills at an an
nual bank discount basis Of less than
so per cent.
Probably it could be argued that the
premiums thus placed on safety are
evidences of a renewed cautiousness on
the part Of those having surplus funds.
But bond dealers expressed gratiflca-
ton at the existence of good demand
for bonds at the slowest season of the
Jear.
Offerings During Week.
The total bond offerings Of the week.
as compiled by Dow, Jones & Co., was
only for issues formally advertised and
this total was only 28,947 900, COM
pared with $47,792, 900 last week ana
$73,737, 900 in the same 1880 week. But
as a matter of fact, this weeks offer
ings aggregated well over 100000, 900.
Although issues such as the Common
wealth Edison $20,000,000 of 31a per
cent notes have already been oversub-
scribed, they will not be formally Of
fered until next week. Municipals have
been scarce, but many new offerings are
in course Of preparation. One of them
is a $45,000,000 block Of Detroit city
bonds, authorized by the City Council
to refund maturing short-term loans.
The foreign market ended the week