Evening star., 1932-10-22
SECURITIES SALES I
TO Be DISCUSSED
Investment Bankers Will Ex.
anime Methods of Market
ing New Issues.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, October 22.-More then
twice the number G -presentatives Of
investment bankers are leaving New
York to attend the annual CONVENTION
Of the Investment Bankers Association
at White Sulphur Springs as went to
its sessions last year.
This is not only indicative of an
awakened interest in the subjects that
will be discussed at the convention, but
suggests that there is a greater degree
of expectancy Of broadening of the
markets for investment securities than
has been held by members of the as5o-
citation since 1929.
Profits Have Been Small
From the standpoint of profits this
has been one Of the leanest years the
investment bankers have ever ex-
perienced. The amount Of new issues
on which they make their largest COM
missions has been only about one-third
Of that in 1881. Offerings Of new cor
poration bonds are down nearly ST.
600 100000, or 80 per cent, from those
in the previous year. Even houses that
specialize in municipal issues. and
therefore have done brisker business
than all others, have faced the fact
that loans to cities and States in the
first nine months Of 1882 have de-
creased nearly so per cent. As under
writings have been scarce, the profit on
those that have been negotiated have
also been smaller, with the keenness
of competition that grows out OF
nd n 0ht in h0nIS m offer rliontS
and to help cover overhead" and keep
organization intact.
More than ever this year trading
in bonds has been confined to the
New York Stock Exchange and less
than in recent periods among dealers
who operate on an "over-the-counter"
basis Consequently commissions on a
unit basis have been reduced. although
the volume of trading IN listed issues
has at times been very heavy.
The fact that new financing OF
dollar loans has completely dried up
and Is not likely to be revived for
many years has taken away one OF the
largest sources Of income fror those
investment bankers who reaped a har-
vest in German, Scandinavian, trench,
Italian, Polish, Austrian, Hungarian
and South and Central American loans
in the period between 1921 and 1928.
The organizations that had ben set
UP to distribute such loans have gen.
orally been disbanded. Numerous
houses that figured in them have
folded up and are permanently out OF
the investment business picture. There
has been nearly equal contraction IN
the volume Of railroad financing, which
brought substantial annual profits to
score or more Of investment houses.
So far this year the amount Of new
railroad capital publicly offered is less
than s1o,ooo.o0o AL of the needs OF
the carriers have had to be met either
through bank loans or on the acqui-
escence Of the Interstate Commerce
Commission and the Reconstruction Fl
nance Corporation.
Forum on Management.
It is expected that at the White
Sulphur Springs convention this year
there will be much discussion of
methods Of distribution of securities
when the time comes for corporations
again to borrow against public offerings,
and that a number Of the abuses that
grew UP in the wholesale and retail
distributing branches Of investment
banking, when new bonds were being
offered in enormous daily amounts, will
be subject to review and correction.
A feature of the convention will be
forum on investment management.
This has taken a strong hold on a
large number of investment houses and
dealers who have been able to institute
a service for a fixed fee that appears
to be more satisfactory to the client
and a greater protection to his invest
ment portfolio than the cid method Of
putting him into practically every new
bond issue that was offered in the
street. 1t is not only sounder in prin-
ciple, but ethically more acceptable, as
the concern which supervises it agrees
not to recommend any issue in which
it has an interest as a principal in the
business or which is being carried in its
own portfolio.