Evening star., 1932-04-17
BOND
MARKET IMPROVES
Advance in U. S. Government
Issues Proves Strengthening
Factor During Week.
Special Dispatch to The Star.

NEW YORK, April 16.-The week
has witnessed a sharp reversal of trend
in the investment market. After start
| ing the period in a mood of despair
the bear market, bonds suddenly be-
came the objects of tumultuous buying
Standard Statistics index of so rep
resentative issues, which had touched a
| new low at 662 on Wednesday, stood
above 67.5 as the week ended.
1t was in United States Government
! bands that the broadest advances were
| made and 1t was here, also, that the
| stimulus was found to send Junior
bonds on the road to higher levels For
weeks the investment market had been
pursuing a contradictory course, which
1t could not long be expected to follow.
United States Governments and mu-
nicipals had shown continuous improve
ment ever since the first threat of
higher income taxes was sounded early
in the year. The Federal Reserve Sys-
| tenn, which for some time had been en-
CeaVorlng to release credit to industry
by buying Treasures and Liberties and
thus actively promote its cheap money
policy, increased its purchases suddenly
from an average of $25,000,0 900 week
to something like SIS, 100000 And it
was limited, in no uncertain fashion,
that this buying would become much
heavier were it necessary. 1t was not.
Although the bond pool that operated
at the lows of last December had long
ago sold its bonds and diSbanded the
force of public and institutional buying
set of by the Federal Reserves action
was sufficient to give the bond market
one of the most spectacular recoverieS
it has ever had in two successive seS-
sions. Additional impetus was given to
the movement by the intimation that
the Reconstruction Finance Corporation
was considering entering the market
and picking up some of the hundreds
Of intrinSically valuable bonds that lay
on the bargain counter.
The fever spread to the foreign list
Though Europe'S problems are still far
from being settled, the Street saw some
reasons for better sentiment in con-
nection with foreign dollar obligations
| Alfred z. Smiths plan for dealing with
the war debts was hailed as another
step toward better understanding OF
| their problem. Continental markets
had a noticeable picking up as a result
| They took the view that at last a def
mite basis for discussion had been laid
| down
The improvement in the world sta
tistical position of wheat stood behind
the upturn in securities as a sign OF
betterment in basic conditions This
was tempered by the prospect that the
| Imperial Conference soon TO be held ir
! Ottawa will result in Canada and Aus
tralia securing preferentials in supply.
| ing the British Empires needs in grains
| that will be prohibitive to other grain.
| producing countries. However, foreign
exchanges against the dollar were
| steady, the absence of fluctuations
I alone being responsible for more activity
| in international trade. Once the soldier
bonus agitation is removed as a poten.
tial market menace, a long period o.
steadiness in currency exchange seems
| assured
There has been a great clearing o.
| the stage in the last wave of security
liquidation and with the Kreuger stu,
alton abroad and the insult organization
at home now in process of readjust.
ment, a solid basis for reconstruction
OF substantial character is hopeful,
expected.
tCopyright, 1927