Evening star., 1932-01-31
INVESTMENT BOND
MARKET IS SDRAGGY
Sino Japanese Clash and
Rail Wage ParIey Affect
Price Trend.
By the Associated Press


NEW YORK, January 30.-The in
vestment market ended the week in q
somewhat gloomy and apprehensive
frame of mind, after watching bond
prices pursue downward course. Dis
turbed by the Sino-Japanese clash at
Shanghai, Wall Street was fearful OF
some flare-up which might project one
or more of the great powers into the
struggle. The railroad wage conference
at Chicago spent another week without
reaching a definite agreement.
Bond price averages dropped more
than 2 points below their best levels
of the year to date. japanese govern
ment bonds broke to points TO new
low levels for the bear market, with
yen exchange down to new low
There was nervous selling in the entire
list of foreign and domestic descrip-
tions.
Bright Spots.
However, the picture was not without
its bright spots. The Shanghai war
scare" just as the Manchurian crisis
had done some months ago, caused an
abrupt climb in some commodity prices
Bargain hunters were in the market
for bonds as the week ended. One in
stance was that Of Japanese government
51as, which sold down to new low
For time on Friday there was no bio
for them and then bond sold at g.
Immediately number of floor traders
started bidding briskly for the bonds
at So and little higher. Similarly in
the rest of the list even though prices
showed substantial declines on the
week, many issues closed much above
their lowest levels.
AS for the domestic railroad situation,
the Reconstruction Finance Corporation
Is about to get under way, and under
this and other administration plans the
railroads will be able to obtain the re-
sources they need to meet bond maturi-
ties and interest and get their systems
in shape for the recovery. 1t was for
this reason, no doubt, that Missouri
Pacific 51as, after dropping rapidly
with not a vestige of support, were
heavily bid for around their low. The
same applied to Nickel Plate IS, Erie
S. st. Paul SIS and many another junior
carrier bond.
Another hopeful factor in the rail-
road situation is the constructive work
the Interstate Commerce Commission
can do in rounding out consolidation
plans. For instance, this week the
Southern Pacific was given conditional
permission to acquire the st. Louis
Southwestern. The immediate result
was that cotton belt bonds ran up IA
to l9 points.
New Capital Market.
By far the most promising develop
ment of the week was the revival of the
new capital market While the weeks
total of just over Sal 100000 compared
with S201, ,064 900 put out in the same
week of 1881, it was great improve
ment over the weeks of December and
January when no bonds, or only a few
hundred thousands of dollars worth.
were all that could be sold at any
price.
The impetus for this sudden activity,
OF course, was the success of the New
York City offering of 100000, 900 of IS
the previous week. The bonds were bid
at q premium for a few days after offer
ing and New York States issue of 4las
was not even offered to the public, SO
anxious were the bankers to get it.
Municipalities Immediately arranged to
reoffer issues on which bids were re-
fused in December and early January
and undoubtedly the next few weeks
will see more normal stream of these
descriptions.
Meanwhile the utilities have found
little difficulty in marketing high-grade
bonds around SIS to $50 per cent
yield basis for 20-year bonds. New
York Edison sold $25,000,000 of such
an issue and Brooklyn Edison and
United Electric Light & Power both
have similar issues pending.
The outlook for the investment mar