Evening star., 1933-09-19
BONDS SELL OFF
ON BROAD FRONT
Prices Break Under Strain
of Increased Offerings.
Steadied Later.
BY JOHN A. CRONE.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, September 19.-Under
the strain of increased offerings or be-
cause of the disinclination of bidders to
maintain their bids, bond prices broke
today.
After many issues Of the better type
had registered declines ranging from l
to points, the market seemed to meet
support, which gave rise to rumorS that
the bond pool was again in the market
II this were the case, the pool certainly
overlooked some high-grade issues.
The Federal Reserve system likewise,
judging by actions of United States
Governments in the last half hour, gave
little support.
The appearance Of many sellers
IS" on the tape indicated European
selling, which was confirmed by sur
vey of houses with important overseas
issues showed better tone in the last
hour, there was less pressure to sell,
causing a slackening in trading.
Bondholders gripped by inf1ationary
fears freely offered their holdings OF
virtually all classes Of couponed secur-
titles. Bond buyers, such as life insur-
ance companies, realizing that offerings
were plentiful. withdrew or constantly
scaled down their bids. expecting there
by to pick up big blocks at bargain
levels.
Forced Concessions.
Imitation of the monetary sort
viewed from some life insurance angles,
means nothing. Insurance policies are
payable in United States currency.
They call for a certain number Of dol
lars. Bonds are payable in the same
currency and their payment likewise
&on1irpc aorfo{p p1,pohar ~ dn11orc
no matter what that unit be worth in
purchasing power or what its gold con-
tent or what it Is worth in terms Of
bther currencies.
Within recent days, however, the
bond buyers OF institutions, especially
life insurance companies, have discov-
cred 1t was possible to dislodge some
large lots of bonds at prices sometimes
considerably below the market. Since
such transactions are not recorded in
Exchange dealings. this state Of affairs
required several days to make itself felt.
Such selling few months ago would
have aroused fears for the safety Of
important financial institutions If
such trends are permitted to continue,
much of the work of the last few
months-and no follower of the bond
market will minimize the role of cou-
POI, securities in the general recovery
will be undone, for many loans are
based on bond collateral. Imitation,
actual or expected, however. IS bound
to affect high-grade bonds, which Is
what the market now Is trying to say,
after having some Of the artificial re-
moved.
Distinction Less Marked.
United States Government obligations
naturally moved about uncertainty in
forenoon dealings This market IS
more firm than others, however. merely
because the Federal Reserve system
steps in to support it when necessary.
The distinction between bonds pay
able in American and foreign curren-
.ciss today was less marked than in re-
cent sessions, though the Canadian ma
tional 412s, payable in Dominion dol
lars. did better than others and Swiss
5l2s were whirled to a record high
price of 147l2.
French rs and TIPS, however, were
lower on the persistent belief that
France eventually will be forced OH the
gold standard United Kingdom 5H2s
were fractionally higher. The street
hears reports, lacking confirmation,
that another conversion offer Will be
made for such Of these bonds as were
49,
pired last month.
Canadian Pacific perpetual As opened
of nearly points Atchison general As
for a time we're shade higher, put
many high-grade carriers were the nrst
to point downward, notably New YORK
Central 31as, Central Railroad OF New
Jersey 5s and Reading 412s.
Others Join Trend.
Union Pacific As at 95ls were down
o.. points. The funding As at 88 re.
corded a decline of IA on their hrst
trade Some of the better grade Louis
vile Nashville issues dropped more
than a point Northern Pacific AIS. on
a block of 10 bonds, were scaled down
as their offering was printed on the
tape around midday.
Medium-grade rails then came into
the market. Illinois Central issues aver
aged more than a point loss. Kansas
CITY Southern first IS were down more
than a point Then speculative Sc
curities, such as st. Paul gold" 5s, the
adjustments and the Great Northern
adjustments sold off.
Similar trends appeared in high
grade public utilities and industrlalS
American Telephone issues weakened,
though not as much as in the preceding
forenoon. Later American & Foreign
Power IS and similar speculative utih-
ties encountered thin bids even on slight
offerings. American Smelling & Refin-
ing SIS lost point on couple of trades.
Standard Oil of New Jersey IS and
Standard Oil of New York 412s frac-
tionally receded.