Evening star., 1933-04-02
INVESTMENT BOND
PRICES DEPRESSED
Financial Circles Anxious
Over Proposal for Federal
Control of Exchange.
Special Dispatch to The Star.

Special Dispatch to The Star
NEW YORK, April 1.-The invest
ment market had a dull, draggy tone
during the past week. It's performance
was evidence that uncertainty still
rules and that little may be expected
of securities until prevailing clouds are
cleared away.
Chief among these is Wall Streets
anxiety over the presidential proposals
to place security exchanges under Fed
eral control. In general the financial
community approves of the provisions
of the bill to govern new security is
sues. No one Is more eager to enjoy
the full confidence Of the public than
brokers, promoters and bankers. No
one Is more desirous of separating the
chaff from the wheat than are the
security exchanges
Restrictions Discussed.
But when the restrictions on securi-
ties reach the point where they seri-
ously threaten the volume of business
that brokers are doing, the picture
changes. Without going into the merits
or otherwise of short selling, pool oper-
ations, loaning money on stock collat-
eral ard other practices that are ex-
pected to come under Federal inSpec-
ton, it may be confidently stated that
market restricted entirely to invest
ment buying and liquidation of a neces-
sitous character would be narrower
than anything the Street has seen at
any time during the depression. Many
brokerage houses would go out OF busi-
ness. Closed banks that have large
amounts of securities to sell before
they can put themselves in liquid
shape and reopen would not be able
to get anything like fair prices for
their offerings.
Wall Street is confident that the
curb on speculative operations Will be
lighter than was first expected. be-
cause it is inconceivable that the ad-
ministration would place any obstacles
in the way of the successful cleaning
up of the banking problem. What Is
expected is cutting down on brokers
loans, measures to prevent pool opera
tions and strict supervision OF snort
selling No new restrictions are ex-
pected to be placed on bond trading:
One feature of the week was the In
terest displayed in certain extremely
low-grade bonds. Junior issus OF the
Missouri Pacific. Chicago g. North
/, western, Nickel Plate, Erie, Illinois
Central st. Paul. and Southern Rail-
way were bid for in fairly large blocks
by spectators intending to hold them
with the idea that they will come out
in the end. after railroad reorganiza-
ton, with income bonds, preferred stocks
| and common stocks.
German Situation.
The German situation brought out a
great deal of selling of German bonds,
| both from local investors and from Eu-
rope. Support was encountered In the
| best German issues on the decline
/ though there was a tendency to sell
German municipal bonds and transfer
the money into American securities.
Most inquiries from abroad have been
! for investment grade stocks and prime
bonds. Canadian and Australian issues
have been under accumulation on the
theory that conditions in those domin-
ions have much improved already and
| that the balancing of their 1888 budgets
is close to being accomplished.
Copyright. 1933D