Evening star., 1933-04-16
INVESTMENT BOND
MARKET IMPROVES
DURING PAST WEEK
Trading Expands as High
Grade List Points Stead
lily Upward.
Special Dispatch to The Star.

NEW YORK, April 15.-The bond
market had a generally improved tone
during the week. Trading was some
what heavier than in the preceding
week, though the increase did not
match the intensified interest in stocks
Bonds, hcwever, in their advance
lent more significance to the new op-
timism than did the behavior of stocks
Higher prices for equities and COM
modities, it was argued, was a direct
reflection of imitation talk. but this
could not be a contributing cause to
the gains in high-priced bonds, whose
normal reaction to inflationary meas
ures would be toward lower prices and
higher yields.
1t is true that second and third
grade bonds have discounted imitation
at present levels and, since higher
prices for commodities and manufac-
tured products would increase corpo-
rate earnings, the coverage of bond
interest would be greater and have q
tendency to advance prices of some
bonds. But it cannot be argued that
imitation would support the prices OF
bonds like Standard Oil of New Jersey
S. Norfolk & Western As of 1896 and
American Telephone IS of 1860 at
money rate levels until some time after
the convulsion inevitably following the
expansion Of the currency or devalua-
ton OF the dollar.
Credit Expansion Seen.
Wall Street has accepted the theory,
therefore, that imitation will not con-
sist of either of these two extremes
but will be along the lines already
indicated by the administratton-an
expansion of credit.
Meanwhile a large section of the
financial community has been engaged
in estimating just what may be ex-
pected in the way Of increased business
through the now Nationwide sale OF
beer. The initial volume of sales has
exceeded all expectations and it Is new
confidently expected that the Federal
Government may realize more than
5000, 100000 in taxes. as against less
than $150.000,00O first set as the max
imum hope. The far-reaching effect
of the revival of the brewing industry
for grain, the rush of orders to COM
panies engaged in making brewert sup
plies, the increase in miscellaneous car
loadings on the railroads and the pick
up in food lines related to the retail
distribution of beer.
In the bond market this has been
chiefly marked by higher prices for the
bonds of companies like Owens Illinois
Glass, Crown Cork & Seal and the
distributing corporations.
Government Bonds.
The better feeling has been accom-
panied by higher prices for Govern
ment bends, an improvement SO sub
stantial that almost overnight opinion
has veered around to the view that 1t
Is quite possible the Liberty loans may
be successfully refunded in whole or
in part this year. Such a move would
effect a large saving Of interest and
fit into the Roosevelt program of
economy.
Foreign dollar bonds have done little.
The German list, although finding more
support than during the period when
the Nazi boycott of the Jews was at
its height, have failed to rally impor-
family. Other European bonds, not
having shared largely in the decline
of March and early April, were not
much affected by the general recovery.
Copyright. 1889