Evening star., 1932-09-20
BONDS IRREGULAR
in QUIET MARKET
Hleh-crade List Advances,
but Speculative Rails
Show Losses.
BY r. H. RICHARDSON.

Special Dispatch to The Star.
NEW YORK, September 20.-Bcnds
were irregular In quiet trading today.
Speculative railroad and industrial is
sues were fractionally lower, while high
grade bonds remained firm or advanced
slightly. United States Government
1ong-term bonds advanced to new high
prices for the year.
The market was steady at the OPEN
ing. New tops for most of the active
Treasury and Liberty issues were at
trihuted to the belief that the New
York Federal Reserve Banks rediscount
rate will shortly be reduced from 2la
per cent to a figure more nearly ap-
proximating the open market rates for
money. Counter money was available
at ! per cent today. while time loans
were procurable at lhs to IA per cent
for 80 days.
This trend toward still cheaper money
Is not peculiar to the American market.
1t Is worldwide. The ReichSbank to-
day secured permission from the Bank
for International Settlements to cut its
discount rate from to 4 per cent? Talk
IN London strongly favors an imme-
diate lowering of the Bank Of England
rate. The Bank of France, with its huge
conversion operation under way, is keep
ing money rates at a minimum. The
consequence here and abroad is that
yields on short-term Government notes
and certificates have reached the van
ishing point and savings banks and
other investing institutions have turned
to the long-term Government market
for portfolio material.
Eventually this movement will produce
better conditions for new financing in
this market. Already there is some i'm
provement. Canada, it was learned to-
day, will shortly do its first financing
in the American market in more than
two years. The Canada As of 1892 to
the amount Of $4,000, 600 mature
shortly. As long as the high-grade
market here was weak and Canadian
exchange lowering at worse than a IS
per cent discount. the refunding of this
loan here was impossible. But Canadian
exchange has improved to around per
cent and the high-grade market is bet
ter. Canadian Is are currently quoted
on $50 per cent basis in American
funds and 1t is estimated they can
easily be refunded with 5-year bond
at 4 per cent.
Railroads and industrial concerns,
however, have little hope of being able
to finance satisfactorily in this market !;
hence all sorts of expedients are being
used. The railroads are requesting per-
mission to issue mortgage bonds as col
lateral for short-term borrowings. Such
an application was announced today on
behalf of the Illinois Central. and the
Southern Pacific received permission to
borrow against s59l6,00O Of San Fran
cisco Terminal first mortgage bonds.
Conde Mast Publications. incorporated,
requested holders of 81 900 600 in 6 per
cent three-year notes due December ID
to accept for each $1,000 not $1,000 in
first mortgage per cent gold bonds
maturing 1887 and s100 in cash.
Speculative bonds such as McKesson
& Robbins 51as, United States Rubber
SIS. Youngstown Sheet and Tube IS.
Western Union 6l2s, International Tele-
phone SIS. Chicago Great Western IS.
Missouri Pacific SIS and Allsghany Cor
poration SIS were easy today.
German issues moved fractionally
higher, following reports of bstter busi-
ness end less Unemployment in Ger
many. Other Europeans were steady