Evening star., 1933-04-09
INVESTMENT BOND
PRICES DEPRESSED
BY HEAW.SE[[|NG
Liquidation From Bank
Sources Causes Losses in
Prime Securities.
Special Dispatch to The Star.


NEW YORK, April 8.-The bond
market pursued an erratic course dur
ing the past week, but the chief phase
OF the present market remained the
same-continuous and oppressive liqui-
dation from institutions that are in the
hands of conservators.
In midweek there was some recovery
based on optimistic hopes that an
nouncement Of the administrations
plans for the railroads and final dis
posal OF the farm relief measures would
bring change of sentiment. United
States Government issues were generally
firm but many prime corporation bonds
sold at prices which, being so far out
OF line with money rates or any ordi-
nary consideration, could only have re-
suited from forced selling. Trading
was not heavy at any time and the
movement Of prices was not governed
SO much by the bidders as by the rails
ing or lowering of offerings
Bank Probe Feared.
Wall Street Is nervous over a number
of things. One of its worries is over
the impending investigation of private
banks. 1t Is feared that this probe, If
carried out in drastic manner, might
result in wholesale pressure from pri-
vately held securities, from foreign
spectators and from domestic specu-
lators who would not care to be COM
| mitted in such market.
Another cause of nervousness is the
fear that the railroad reorganization
plan will not provide for a thorough
| scaling down Of capital debts, but will
consist merely Of postponement of in
| terest. Still another worry concerns
! the banking situation, with many insti-
| tutions still closed.
On the other hand, the Federal Re-
serve System continues to gain gold
! circulation continues to decrease, and
| the Governments reconstruction plans
! are proceeding along a conservative
, course. Money rates have dropped
! again to nominal proportions, with time
| money offered as low as IL per cent
| for so days and no takers and out
| side call money quoted around u per
cent, with very little demand Were
it not for the continued fear that the
Governments May financing plans will
provide for further huge borrowings
! outstanding Government bonds might
well De expecteQ 10 ADVANCE ABOVE pres
ent levels
| It is significant that Liberty fourth
and first 4Hs have made and held fairly
/ substantial gains. The calleble feature
Of these bonds-incidertally notice OF
a call this year must be given by April
/ 15-serves to keep them pesged and the
size of the issues guarantees ready
market.
Dollar Bonds Lower.
| Federal Land Bank bonds were mar
rowly lower following the announcement
of the provisions of the farm mortgage
! relief bill. under which it is proposed
to issue $4,000, ,000,0 900 of bonds guaran-
teed as to interest only but entirely
tax-exempt. Some disappointment wa'
felt that the bill did not equally secure
the principal of Federal Land Banl
bonds.
Foreign dollar bonds were generally
lower during the week The market
saw a threat to Frances strong posi-
ton in the heavy Withdrawals OF golc
from Paris. French government rs arc
715s were depressed at times. German
dollar obligations collapsed on the
announcement that the ReichsbanE
would pay back S70,000,000 of foreign
credits, DR.. Hialmar Schscht holding
that the borrowed gold reserve did moi
mean anything, since it exposed the true
gold position.