Evening star., 1933-07-30
BOND PRICES SHOW
MARKED STRENGTH
Close Above Preceding Week
and Near High Point
for Two Years.
BY BYRON SELLER.

Special Dispatch to The Star.
NEW YORK, July 2s.-The invest
ment market attracted a fair amount
of attention this week, considering the
shortened sessions. Bonds flnlsheo
above their close of the preceding week
and just slightly under their level OF a
fortnight ago, which was the M9hest
point in two years.
June rail earning statements heipeo
speculative rails more than gllt-eogeo
rails. Income reports also alded lnous-
trials. Public utilities Jagged because
o. disappointing profits when viewed III
terms of recent power output gains:
The virtual absence of new bond
issues is one explanation for the quick
recovery of outstanding couponed securl-
ties from the effects of the stock mar
ket crash the preceding week. Inls
paucity of new bonds results from mar
ket conditions and the Rayburn-F -Fletch-
er securities bill, which, though signed
b. President Roosevelt May 27, old not
become fully effective until July u
Between these two dates more than
500. 100000 of new stock was offered,
but less than $40 100000 of new bonds.
This wide gap between bond and stock
financing, in view of the fact that most
actual financing of industry is done by
bonds, is somewhat superficial. The
stock offerings were speculative and
were centered around the brewing and
distilling trades. On the other hand,
the few bonrs offered were of high
grade and represented established en-
terprises.
The small total Of new bonds also does
not include all of the new issues, judged
by former investment banking stand
ards. marketed within that period.
Heretofore when a railroad met ma
turity by offering another bond, the
operation was referred to as a refund
ing, but the issue that replaced the old
bend was considered new
Thus the St. Paul, Minneapolis q
Manitoba Railway plan, whereby hold
ers of SAC, 0,425.000 of consolidated mort
cages due July l.. 1888. exchanged their
holdings for bonds maturing July l,
1o43-interest and principal again as
sumed by Great Northern Railway
was a refmding operation. Being an
exchange offer. it did not come under
the new securities act.
The exchange extension offers made
by Baldwin Locomotive and American
Rolling Mills to holders of maturing
bends similarly do not come under the
reeistraticn requirements of the securi-
It's rct
TIE irst nev bond issue to cCmplv
ii all requirements OF the securities
g, was the 3301o010 N2-rasa1sett
: e,tric Co.. frs ilcr,gage per cent
bonds. ceries c. due June l. 1853 is5ued
for the purpose of paving 81 100000 of
bank debts and reimbursing its treas
u-v for capital expenditures
One of the subsidiaries OF New Eng
land Power Association, controlled by
International Hydro Electric System
which in turn is controlled by Interna-
tfcnal Paper & Power, offered 100000
of three-year AZ per cent notes. pro-
ceeds of which paid off some bank loans
This offering. however, was exempted
from the registration requirements Of
the securities at because the entire
issue was sold locally in Massachusetts
End therefore interstate commerce vas
not involved
Corpora tions that by reason Of their
financial condition Canlo,. p r-uado
holders o. maturing bonds to extend or
exchange such hCldingS Will have to
borrow from commercial banks Doubt
less some arrangements of this sort now
are being carried out.
Aside from the new securities act, the
handlers of new bond issues have had
to consider the stock and bond markets.
When stocks go higher there will be
plenty of convertible bond issues offered
To try to float new issues at time
when there is considerable liquidation
Of institutional holdings. such as banks
enc insurance companies, probably
would prove Improbable.
(Cocyr.sat, 1880