Evening star., 1933-08-30
H|GH-GRADE BONDS
TEND TO RECOVER
Gain Strength at Midday
After Quietly Lower
Opening.
RneriaI Dispatch to The Star,

Special Dispatch to The Star.
NEW YORK, August 30.-Rallying
tendencies appeared in gilt-edged bonds
toward midday today after a quiet and
lower opening. The reversal in trend
followed the renewal Of call money at
8. Of per cent, the lowest rate since
1908
United States Governments eased
slightly at the opening on the belief that
in some quarters the presidential gold
rulings. by putting American gold IN
competition with world markets, was In
affect the first step towards reducing the
gold content of the dollar and thereby
bringing about monetary imitation.
Although time money rates, rather
than call money rates. usually shape
bond trends, there always exists GER
tain amo.nt of speculative bond pur-
chaseS. financed similarly to STOCK pur-
chases, and the present insatab!e de-
mand for short-term securities accen-
tlIates such tendencies.
Banks Are in Doubt.
The glut Of short-term funds results
partly from the fact that banks do not
know how TO invest for long periods, IN
view of recent banking and security
changes. Under the GlaSS-SteagaL act
banks are unable to pay interest on de-
'mand deposits. Such funds, therefore
are being invested in short securl-
ties, chiefly United States Governments,
bills as we'll as certificates, and to some
extent notes and bonds.
The Fletcher-Rayburn act. better
known as the new securities act, Ike
wise has virtually stopped corporate
financing. Therefore, aside from FED
eral and municipal financing. outStand-
inc securities of gilt-edged investment
rating. both long and short term. IN e.
sense are acquiring a scarcity value not
justified in some instances by Speclflc
corporate positions Such- influences
are now being registered in the bond
market.
bethlehem Steel purchase money 5s
of 1886 were up points on a lew plos
at 102. American Telephone As 1880
we're well taken around 1922 ,. General
Motors acceptance IS OF 1888 were olo
up. 49,, eoro;o,,
list were among the most active over
seas securities. The conversion offer OF
the British government, which gives IN
exchange 21o per cent bonds payable IN
sterling instead OF dollars, expires
Thursday and many Of these bonds nave
been purchased for conversion.
New York Issues Mixed.
Irregularitv OF New York City obllga-
tions as bankers met to decide II ana
how they were to advance funds neceS-
sarv to prevent an interest default FIJI,
dav as we'll as meet pay rolls, unsettled
municipal bonds.
Ann Arbor issues and obligations OF
the Prent Co. Wabash Railway, en-
countered stronger bids as receivers @!
the former road authorized payment OF
interest due April /, last, on first mort
gage bonds, July l interest on equip
ment trust certificates series A, ana
dividend warrants and interest Que July
IS on equipment trust notes series OF
1921, Provision has not yet been mace
for interest payments on the hrSt mort
gage bonds due July l.
sprint of more than points IN
Western Pacific first 5s at midday was
not all retained. In the better class
rails Erie collateral As Of 1851 reached
par, the high of the year.
Oil debentures generally moved mar
rowly. Armour 4 rs were fractlonally
easier on the abandonment OF the COM
pany's capitalization plan.
Chesapeake Corporation 5s, bid up re-
Gently on belief that directors would in
crease the dividend-the shares are con-
vertible into the bonds-reacted today
as directors ordered the regular divi-
dent
The afternoon market was dull but
firm. with some improvement in the
speculative rails The Wabash, st. Paul
and Erie issues were well taken. High
grade bonds were steady.
1Q33)