Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-09-15
ELECTRIC RATES
SEND BONDS DOWN
High Grade Issues OFF Frac-
tionaIIy as Others Drop
Sharply.
BY JOHN A. CRONE.

Special Dispatch to The Star.
NEW YORK September 15.-The
assault on electric rates charged by
private companies became more Of a
factor in the bond market today as
trading progressed, forcing prices down.
ward fractionally in the case of high
grade issues and more sharply in the
speculative bonds.
Bond men felt that when the real
significance of the Tennessee Valley
Authority'S announcement became gen.
orally appreciated by investors through
out the country. the market might well
be called upon to absorb considerable
volume of liquidation by frightened
bond holders
1t was generally conceded in utility
circles hare that the announcement of
rates to be charged for power developed
in the Tennessee Valley had a subtle
motive in back of it. Certainly the
purpose was not simply to inform pro-
spective consumers what they would be
expected to pay for current
Seen as Yard Stick.
Utility men recall that when Senator
Norris sponsored the Muscle Shoals
development bill in the Senate early
In 1881 he made it plain that what
was needed was yard stick by which
Vic Va oClNiSC SOuAu NC
measured. Today's announced rates
constitute such a measure of service
value and, regardless of how much the
private companies may try to convince
the public that all the items of cost
to which private capital is subject are
not included in the Muscle Shoals
rates, it is felt that the schedule will
have profound effect upon rate cases,
pending and prospective.
An idea of the effect Of this develop
ment on utility bonds today may be
gained from the decline Of q point in
Detroit Edison AIS and IA points in
Philadelphia Co. S.
Although American Telephone is not
affected at all by the Muscle Shoals
development. bonds Of that company
were heavy today. the Sis declining 3.
point and the IS Of 1865 a smaller frac-
ton. Other high grade corporate issues
were lacking in their usual support and
were uniformly lower. Atchison general
IS declined nearly point and Union
Pacific first As. another standard of in
vestment value, were of more than
Q point
Gold Nationals Advance.
The further decline in dollar ex-
change, in the meantime. was having
the effect of raising prices for the
DONOS OF gOlQ SLdnodrQ countries. IalNS
of 2 points and more were made by
Dutch East Indies bonds. the days best
prices being we'll above the previous
high records. In view of the SenSa
tional advance in Argentine bonds yes
terday. the slight setback this morning
was not surprising: in fact the support
they received in the face of a strong
temptation to take profits was un-
expected.
Trading in Treasury bonds was I'M
usually quiet in the morning. Low
coupon issues continued to sag, the 81. S
selling to 101 10 80. or IA 80 under the
record high of last Monday. A further
decline in the IS brought them y point
under their recent high. Liberty
fourth 4l4s in the meantime were
strong.
Treasury bonds found little support
In the afternoon. even after they had
extended their early losses. in spite of
Washington dispatches which indi-
Gated the possibility of surplus for
the Treasury in the current fiscal year.
Liberty Gas and fourth AIS stood out
against the trend most of the day but
toward the close the 3las fell under
yesterdays final.
The market continued mainly con-
cerned with the possible effect on pub
lie utility rates of the schedule set
forth at Muscle Shoals. Peculiarly
enough, railroad bonds of the lower
state were sympatheticaly affected by
the discussion of this development.