Evening star., 1932-01-10
INVESTMENT BOND
MARKET IMPROVES
Substantial Recovery in All
Departments Occurs Dur
ing Past Week.
special Dispatch to The Star.

NEW YORK, January 9.-The invest
ment market this week made SubStan-
tial recovery after the losses at the enc
of the year. The averages closed abou'
IL points above the year end leve
and about "a points above the Decem'
Der low. AS this indicated an appre-
ciatlon of approximately S2,500, 900, ,0O(
on the $50,O00,O00, 900 par value o.
bonds listed on the New York StoCE
Exchange, no criticism could be leveleo
at the behavior of the bond market eX-
cept in one particular.
This was the failure of United States
Government issues to follow the genera.
improvement. All through the broad
advance in corporate and foreign gov
ernment bonds, these descriptions, along
with municipals Of both high and low
degree, were depressed. Since this could
no longer be attributed to tax selling
which automatically ceased on Decem-
Der 3l-or to year end window dress
ing, market analysts were at loss To
assign a sufficient reason for it. To
ascribe it to the fear Of future Treas
ury financing seemed absurd at nrS'
glance.
Treasury Financing.
Even though Secretary Mellon had
to pay 325 per cent for 90-day money
in December, there was no reason tc
believe that with higher bond mar
ket, a tendency toward cheaper money
rates with the year end pressure lifted
and a better feeling toward foreign
developments, he could not borrow al
substantially better rates. Also. with
administrational activity definitely
turned toward the economic scene
there was reason to believe that the
Treasury'S house would soon be set ir
some order calculated to remove the
stigma of S1,500,000,000 deficit anc
make marketable the 81, 100000, 600 OF
so that Mr.. Mellon must have from the
lending public before 1882 Is out. 1t is
estimated that if the market is not
pressed too quickly or heavily the Treas
urv could succeed in dtsposing OF an
issue of 10-year 4AS.
Such a market could give no excuse
for the price at which Liberties anc
Treasures were selling at the end OF the
week-at yield bases Of 4.30 to 4.55 pei
cent.
The market no longer accepts the be-
lief that the Treasury can prontabll
refund any part of the Liberty fourtf
loan. which is callable this year. Fol
this reason many banks have sold Lib
erty fourth 4Hs and today their yielc
is around $50 per cent basis, agains'
100 per cent in 1881.
Prime corporation equities advanced
an average Of 2 to 3 points. Because
of the forced liquidation by suspended
banks and by those caught in the early
1882 pressure, these readily cashablt
descriptions were prevented from paral'
leling the improvement Of the junior
market.
Foreign Lists.
In the foreign department there wa!
a much improved tone. German gov.
eminent bonds moved up IS to 18 point!
above their December lows. This wa!
a direct reflection of reports from
abroad that France and Great Britain
had come to an amicable agreement-tc
be implemented by definite proposls a.
the Lausanne Conference later in the
month-that Germany's economic patti
should be made easier. Whether 6
three or a five year moratorium is ex-
tended to the Reich makes little differ.
ence. The market would accept eithel
as the compromise essential to restore
confidence in international credit
Sterling quotations firmed up substan
TALLY on the news, as 1t indicated tina
rumors that France would withdraw he
London balances were without founda
ton.
Copyright, 1922