Evening star., 1932-04-24
INVESTMENT BONDS
IN TRADING RANGE
Recent Political and Eco
nomic Factors Have Made
Buyers HeSitant.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, April 23.-The invest
ment market has again reached the
stage where it has established o trad
ing range of sorts.
During the past week the market
drifted higher, then lower in trading
that was active on the upturns and
dull on the declines. While this in
dicated that the market might easily
be taken TO substantially higher levels
should some development occur to
start rally. there is so much uncer-
tainty surrounding political and eco
nomic factors that the buying is hesi-
tant, especially in corporation issues
According to Standard Statistics in
dex Of so issues, the level of the gen.
eral corporation list now stands about
2 points above its record low. At the
same time United States Government
issues and municipal bonds this week
were steadily making new highs for
the year.
Causes for Change.
This situation, which is a familiar
one to any one who has watched the
bond market for the past two and a
half years, arises from several causes
=
ton of taxes. Higher income taxes
are certainty for the current year
There Is every prospect of a tax on
bond sales. Industrial earnings have
shown no improvement, at least not
in any of the standard indiceS, and
holders of junior obligations are sell
ing for fear the long record OF de-
faults that has marked the depression
thus far will be considerably extended
in the near future. Then stocks have
been weak, forcing out liquidation OF
bonds to help margin accounts. And
the banks that bought bonds at last
December's lows have again been
tightening their load of everything ex-
cept the higheSt-grade cashable short
term paper.
The lower range of both stocks and
junior bonds has caused the banks
again to tend toward the extreme of
liquidity The commercial banks and
insurance companies, as well as the
Federal Reserve, have bought large
blocks of United States Government
bonds, both long and short term. In
dividuals with large fortunes, anxious
to escape the higher income taxes, have
invested much money in tax-exempt
municipals. Also, there has been con-
bonds, of all grades, into Government,
State and municipal issues.
Government List.
With Government bond prices at their
present levels, there Is every prospect
that the Treasury will be able to borrow
the 81 ,000, 100000 or so it will need to
cover its deficit without much difficulty
and that further sum of equal or even
greater size could be raised. Next weeks
Treasury financing will probably be in
the form of $500, 900 900 to $500, 900 ,00O
of to IL month notes, and at present
Government note quotations could well
be f1oated with coupons of 11s to rs
per cent. The success of this issue
should go far to dissipate some of the
present uncertainty overhanging the
investment market.
Meanwhile the new capital market
owing to the popularity of municipals
has been quite active. In the week
$50 1884, 900 of new bond issues were sold
against $ll,192,000 last week ano
$11 ,720, ,949 in the like 1881 week.
The foreign dollar list this week has
reflected the waiting attitude that has
gripped Europe pending the Lausanne
Preparations Conference
(Copyright, 1922