Evening star., 1932-09-04
INVESTMENT BOND
MARKET ADVANCES
ALONG WIDE FRONT.
Corporation Issues Make
Largest Gains During Week.
New Offerings Small.
Special Dispatch to The Star.


NEW YORK. September 3.-In spite
Of recurring bursts of selling OF spec
ulative bonds, the investment market
held its level during most of the past
week, and at its close the trend was
again sharply higher. The strength
exhibited by bonds in resisting the
selling early in the week was convinc-
ing testimony of the new optimism that
has pervaded the markets and the busi-
ness world
The anticipation of heavy Govern
ment financing on September Is, which
a few months ago would certainly have
caused unsettlement in the Govern
ment list. was not reflected in the
slightest way. Huge conversion opera
tions contemplated by England and
France, which once would have pressed
down foreign dollar bonds end upset the
international money market. were
greeted with rising quotations In both
these divisions Municipal bonds i'm
proved all week, ending the period with
a sharp upward trend led by New York
City obligations.
Corporation bonds, which had had
the heaviest declines In the reaction OF
the previous week and the early days Of
this week, made the largest advances
as the week closed.
New Financing.
However, there is one phase Of the
present bond market which Is not en-
tirely satisfactory to Wall Street. 1t is
the virtually complete lack Of new
financing. Prime bonds in the railroad,
utility ard industrial divisions have all
advanced to levels where thev mirror
money market conditions. All signs
of forced selling and panic values have
been eradicated from these groups. Yet
there were only 81, 100000 of new bonds
offered In the week and only S10,000.-
900 in the week before, and it is a well
known fact that there has never been
time when industry In the United
states was so in need Of new financing.
Never has there been such backlog OF
potential new bond offerings.
In view of conditions here as regards
new capital emissions, Wall Street is
beginning to ask if the United States
Treasury has not taken similar atti-
tude in an informal manner. 1t Is well
known that the mc-est hint from the
Treasury would be sufficient to keep
new offerings down to minimum.
Eut for what reason? On September
IS the Treasury is expected to sci
about sl,400. 10000 to $1,000 900 'O0(
of notes end bonds. These will be read
lily absorbed at. say, 33s per cent fol
$500 900. 600 five-year bonds, 21s fol
$500. 900 900 two-year notes, and IA
, per cent for $500, 900, 900 one-year notes
No precautions are needed apart from
those already taken by means OF tht
Federal Reserve Systems cheap none!
policy.
So the prophets believe that majo
conversion is contemplated by thu
United States Treasury A sum, rang
ing from s6OO0O, 600 to 500. o.0o0,0 900 an
nually in interest charges, could b.
saved If the Treasury could refund th'
Liberty First 44s and Liberty Fourth
/ 4hs into 31ss. The first is callabl
! this wear and the second next year.
A more plausible explanation OF tn
| stagnancy in the new capital narke
J is to be found in closer inspection o
market prospects. There is hardly al
| cbssrvant Individual in Wall Street Wit
is not convinced that the investmen
market is headed for levels consider
ably higher than those now prevailing
especially these sections of the bon'
| list which come neither in the higl
grade class nor in the speculative
| grades The bonds of many sound con
Germs whose earnings have never dippe
dangerously close to fixed charges ar
still to be purchased at prices yieldin
as much as 8 to 7 per cent in income
| City Financing.
municipalities generally have accom-
plished most of their financing for tn
year and there will not b. a larg
demand for them until after the elec
tions this Fall, when taxpayers will b
asked TO vote on some 350000,000 t
$500, 900 900 of municipal bonds.
incidentally, this lack OF new munici
pals hes diverted a sizbale reinvest
/ mcnt demand ordinarily confined t
the municipal and governmental lis
TO the general market and has aided /
keeping bond levels near their best fc
the year at a time when speculator
were selling for profits. But whethe
the Government attempts large cor
version operation or not, the hisl
grade market can be expected to clin
fairly closely to its present levels. an
when new capital offerings increase
the Fall. a good reception is slmo'
certainty
(Copyright. 1922