Evening star., 1932-02-07
BOND INDEX ENDS
WEEK UNCHANGED
Average Price Is 74.5 After
Period of Dull and Draggy
Trading.
Special Dispatch to The Star.

special Dispatch TO Ihe Star.
NEW YORK, February 6-The bond
market was a dull and spiritless affair
during the past week. The index Of
prices, as prepared by Standard Sta
tistics, with 60 representative bonds ad
justed to the 1926 price taken as 100,
ended the week around 74.5, or virtual
ly unchanged. Trading, which two and
three weeks ago was running along at
the rate OF about S15,000,000 to s1S,-
100000 daily, dwindled to less than
S10,0000 900
AS a matter of fact, the financial
community had adopted a waiting at
titude. with the menacing aspect of
the Far Eastern situation deterr1ng
traders from taking a long position in
the market.
There was a poor market for foreign
dollar securities of all kinds, and do
mestic bonds were also affected by the
general pessimlsm.
In Europe all eyes were turned on
Great Britains new revenue tariff pro-
posals, which will definitely end the
traditional free trade policy of that
country. Wall Street saw in this latest
recruit 10 the revenue. tariff ranks a
threat to the pound sterling of far
/
rency has yet faced.
At home, the misunderstanding &C
complished their agreement for 10
per cent wage reduction for all rail en-
ployes-were appraised purely on earn
ingS reports instead of on hopes, as
was the case earlier in the year. Earn
ings reports for 1881, many OF which
are still coming out, made one of the
worst showings of any month OF the
depression to date. And the Street eX-
pressed surprise when the Pennsylvania
Railroad, one of the stronger lines, an
nounced its intention of seeking loan
from the Reconstruction Finance
Corporation.
That this was necessary, even to carry
on the roads extensive electrificatlon
program, which was to have been post
pcned owing to the depression, caused
some CONSERVATION. In the selling wave
late in the week carrier bonds lost
virtually all of the ground which they
had gained since the turn of the year.
Business statistics were not at all
encouraging. In spite of the fact that
the Reconstruction Corporation Is
swinging into action, in spite of the
other ameliorating influences set at
work, reports of bank failures continued
to come in. AS result, the market
had to absorb a considerable volume
of liquidation not only of junior secur-
tiles but of United States Government
bonds, which, it will be recalled, have
never recovered very far from their
December lows.
The new capital market was also in
the doldrums. During the week there
we're no new bond offerings, compared
to SAL ,052000 in the previous week, and
S21 1926, 900 in the same week Of 1881.
The Treasury's first quarter reflnancing
plans are expected to be announced
within the next few weeks, and pend
ing their announcement bankers do not
care to commit themselves to syndicates
in order to mderwrite bonds.
This has again brought the municipal
situation to an acute stage. Detroit
was peremptorily told to trim expenses
by at least $6,000,000 when the motor
city applied to bankers for S5,000,-
900 loan. Jersey City, N. j., offered an
issue of bonds, but received no bids for
them. Thus the recent revival of
municipal bonds has been largely
Cancelled.
The immediate outlook for the in
vestment market is clouded, therefore,
until such tine as the workings of the
Reconstruction Finance Corporation can
be more clearly seen and appreciated.
Abroad, the Shanghai fighting has re-
| placed the German reparations prob
lem in the headlines, but the Reich S
position must also be clarified before
any broad upturn in the security mar
kets may be expected.
(Copyright, 1897