Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-13
BAD BOND MARKETS
HIT MUNICIPALITIES
Offerings Held Up Because of
Little Demand on Part
of Public.

BY the Associated Press.
NEW YORK, January l3.-Success o.
the average American politician VII
be gagged in 1882 by his ability to make
one tax dollar do the work OF two
executives Of large New York banks
said today.
During tie last boom period, ended
in 1929, many States, cities and other
municipalities not only spent Literally
but embarked on costly Improvement
programs, which left debt burdens ioi
future years. These States and cities
are now faced with the problem OF pay
ing off past commitments at time
when tax receipts are unusually low.
The record Of the past three months,
bankers said, has shown that channel
ordinarily left open for new money
for municipalities has been temporarily
blocked because Of declining interest
in the bond market. Investors have
shown little desire to loan money 10
States and cities.
Public Confidence Needed.
An outstanding example of this new
barrier which the cities ana states are
meeting. bankers explained, has been
furnished in New York city's negotia-
tions for additional money. Executives
of Wall Street houses said they coulc
not continue to advance the money I'M
iii public investors show a desire 10
purchase the bonds from the bankers
Public confidence, they felt, could De
restored only by rigid economies IN city
More than 5000, 100000 of municipal
borrowing has been held up recently
because of apathy of investors toward
municipal securities. The City OF New
York, it was stated, is still hololng
back its offerings Of city securities, eX-
pected to total 100000, in order 10
meet the city'S requirements. Inc
Delaware River Bridge Commission
wants S34,000,000 to pay for the cost
of erecting the new span linking Cam
den. N. j., WITH Philadelphia, but must
await a better market. Based on past
financing, Chicago normally would
have borrowed about S35,00O,OOO since
Summer, but has been obliged to walt
because of market conditions and It's
cwn taxation problem.
Other Offerings Postponed.
Smaller items include postponement
inf Offering of $l0,000,000 State Of Ten
nessee bonds, $4,000 900 Missouri, slO,-
900 900 South Carolina, S4200,00O Bal
tamore and S2,500,000 North Carolina.
In addition, vast improvement prof.
ects which had been planned are being
held in allegiance. Among these are
the 5000 900 900 water supply improve
ment planned by the metropolitan dis,
trict of California and the proposed
Thirty-eighth street Hudson River tube
by the port authority Of New York.
Bankers said that deferment OF new
offerings in nearly every instance has
hn Io
bond market, rather than any serious
change in the credit ratings Of pros
pective borrowers.
Novel methods are being applied,
bank reports indicated, by some city and
State administrators to meet the new
market conditions.
Doing Own Banking.
The CITY of Philadelphia, which two
months ago received no bids on new
hind issue of SIS, 100000 went into the
b-nking business itself The city sold
SO. OOO. 600 of its bonds to the Phila-
d,Iphia public at retail
The city of Chicago, whose school
taa cheers received little more than one
months salary in actual cash during
the second half of 1881, based an ap-
peal for money on civic pride. II raised
funds from merchants and business
men by pursuading them to buy tax
anticipation certificates.
The Delaware River Bridge Commits
sion. which wants to raise $l0,000,0oO
for additional improvements as well as
to repay $4,000, 900 Of borrowed money,
conferred with its creditors. BY mutual
consent. the creditors and the commits
sion agreed that it would be good policy
TO wait for a rising bond market before
selling too cheaply.