Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-03-20
INVESTMENT BOND
PRICES DEPRESSED
U. S. Government Group
Holds Steady in Declin-
ing Market.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, March 19.-The week
has been one of declining prices in the
investment market. Standard Statistics
index of so bonds now stands more than
90 points under the top made on the
month-long recovery dating from early
in February. This represents more than
quarter of all the ground rega1ned
from the lows of December. 1881.
On the other hand the volume OF
selling has not been heavy. Trading In
bonds on the New York Stock Exchange
has run around SO 600, 900 to 100000
a day. compared with volume during the
upturn of $12,000,000 to $15,000,000 a
day.
United States Bonds Hold Firm.
In analyzing the investment market
few points stand out as significant.
United States Government bonds, for
instance, have had no important recess
sion and are still close to their best
prices on the recovery Corporation is
sues of the very highest grade have
shown much reluctance in moving even
fractionally from their tops. Certain
groups of foreign bonds, such as the
DeSI pcdIo-DL4bloll y Y o. AACAiSAA 10
and various Belgian issues-have not
Joined to any extent in the general
downturn.
Volume has not shown tendency to
increase on the decline-quite the re-
verse. On Thursday, after bonds had
touched new lows for the movement
they recovered strongly in active trad
ing near the close. The volume OF
forced liquidation arising out OF the
weakness in stocks has not been large.
There has not been any sign OF a re-
newal of the panicky liquidation OF last
December.
At the same time, it must be pointed
out that the present downturn is the
sharpest since the market started up
ward in February. The chief sufferers
have been the speculative descriptions,
second and third grade railroad bonds
and semi-speculative public utility obli-
cations. These have mirrored the move
ments of their companion stocks, but it
would not be correct to attribute all OF
the weeks losses in the bond market
to their influence.
1t had been accepted that the Re-
construction Finance Corporation would
look after the railroads. On this pre-
mise a few volatile carrier bonds, such
as Nickel Plate IS and Cotton Belt Is,
both of which mature this year. have
had spectacular recoverieS. All other
Junior issues have improved with them.
But on the recovery these bonds built
up substantial long positions of spec
| ulative nature which, at the first hint
| of a weakening market, threw their
| holdings in for profit. Also, not a
! few were willing to take their profits
and GO short of the same issues. This
| 1a1v xrrI1x nlyn1 D1nfn &c
| touching high of 747s, dipped to So,
climbed again to IS and then relapsed
| to SO.
Onslaught on Utilities.
1t was believed at one time that the
, MiSSouri-Pacific which has large bank
loans coming due, would be looked after
| by the R. F. c., but nothing definite
was made known and, when the mar
| ket slipped again on Friday Missouri
| Pacific issues went with it. Each day
Wall Street had looked in vain to Wash
! ington for a constructive announcement
in regard to this and other railroad
situations.
The actual statement by President
! Hoover regarding the plan to supply
! the financial needs of the railroads was
not forthcoming until after the mar
kets close today.
The other big factor in the unsettle-
ment was the sudden onslaught of the
utility holding company stocks which
was Immediately reflected in the bonds
of the same concerns. Wall Street feels
that readjustments in some large util-
ity combines are at hand, and there
has been a movement to get out of
their securities. Many of these long
ago dropped to nominal prices but the
selling this week in Electric Bond g.
Share induced the holders of many
/ other utility shares and bonds to sell.
hi