Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-15
BOND LOSSES LAID
TO RAIL SITUATION
All Issues Except High-Grade
Group Decline During
the Week.

NEW YORK, November lathe rail-
road situation again came to the fore
this week and generated sufficient pes
simiSm to cause sharp reaction in the
investment market in all save high
grade securities.
The bond market did not pay so
much attention to the corrective reac-
tions in commodities such as wheat and
silver. Those declines were expected.
But in the new reports of railroad diff
culties was found sufficient reason for
dispoSing of junior carrier bonds for
what they would bring, AS a result the
end of the week found most of these
descriptions at new low prices on the
reaction.
Average Decline Not Large
Because of the markets comparative
5teadiness earlier in the week. there was
not a large decline in the average level
Of prices. But in few individual sit
uations the losses were wide. In par
ticular, the Van Sweringen group Of
rail securities were weak. Nickel Plate
IS, maturing next year, were pressed to
a price we'll below so. Sharp losses &C.
CURED in the bonds of the Allegheny
Corporation, Chesapeake Corporation,
Erie Railroad and the Missouri-Pacific
Railroad
Wall Street is pretty well convinced
that the Nickel Plate situation will be
taken care of by the bankers because of
the intrinsic value of the property and
its known earning power. But the re-
cent offer of so cents on the dollar
and a small bonus in stock worth less
than so cents share for the Van
SWeringen 6 per cent notes has hurt
the market position of all these Securi-
ties.
In the case of the Missouri-Pacific
while the general is, SIS and 512s were
depressed, the collateral 5l4s were bid
sharply higher. These bonds, secured
by the deposit of the common stock of
the New Orleans. Texas 81 Mexico Rail-
road. are a serial issue, and about
100000 falls due December l. The
fact that the beginning of the week
found them 50 bid and the end SO Il
bid was sufficient evidence that the
maturity will be met.
New York Central's dividend came
into serious doubt when it was freely
reported in Wall Street that the road
was seeking to place some long-term
bonds in order to meet bank loans. The
impossibility of selling railroad bonds
in a market that has seen such col
lapses as those of Nickel Plate AIS and
Mobile & Ohio IS is apparent. The
Nickel Plate 41as were brought out in
1880 at 97s4 and this week were quoted
around 40 cents on the dollar. The
Mobile & Ohio SIS were sold to the
public in the same year for 9812 and
this week we're quoted around 25 cents
on the dollar.
Foreign List.
The foreign department was chiefly
concerned with the Franco-German sit
uatiCn. No one in Wall Street seri-
ously believes that Germany will ever
accept the principle that reparations
must be given priority over commercial
debts, as France has demanded but the
delay in arranging an international
conference to clear up the whole queS
ton of intergovernmental payments
caused weakness in German and other
European bonds. British issues we're
firm because of the increase in Britain's
export figures and the improved show
ing OF the Bank of England. South
Americans were strong, even after a
corrective reaction in Argentine bonds
had been taken into account.
Near the end of the week Japanese
issues rebounded 4 to 5 points above
their lows. The Manchurian situation
gave some promise of settlement by
compromise.
New bond issues offered during the
week amounted to $10,359, 600, against
100000 the week before and $l6,-
6e4,9co in the same 1890 period.
Copyright, 1912