Evening star., 1934-02-11
BOND PRICES co
HIGHER DESPITE
POLITICAL NEWS
Paris Troubles and Utility
Agitation Unable to
Check Advance.
WEEKS MARKET LEVEL
BEST IN THREE YEARS
Easy Money, Idle Funds, Lack of
New Securities Regarded
as Important Factors.
BY BYRON SELLER.

ued its upward path during the pas
week. The French disturbances ant
further public utility agitation her
naturally affected some bond groups
These factors, however. did not checl
the advancing market, which reaches
the highest level in more than thre,
years.
Easiness of money, the lack of riev
securities. the desire to employ idl,
funds, the rapid manner in which
Treasury bill offerings were absorbed
and the lack of banking troubles
which a year ago caused institutions
to dump holdings. contributed i'm
portantly to the basic strength of tn,
market.
Appreciation Of bond values on the
New York Stock Exchange, according
to figures released at this week end,
amounted to s1,402, ,708,943 during
January, or nearly three times as
much as in the same month a year
ago and more than Is times the rise
of January, 1881.
Largest Since 1925.
bonds last month was the largest since
complete records were started In 1925
In only one of the intervening Janu-
arys, that of 1928. did bonds show a
loss. That drop was S667, ,562 ,345. In
the first month of 1925 bonds were
UP s907161091. The next year they
were up SPAS, ,486,217. In 1927 the
rise was s181 .491.195.
Even in 1929 bond values appreci-
ated sl5.766.723. The next year they
gained S278,293 ,656 In 1881 and 1882
they were up s161 ,384;203 and $685.
43l ,8l5, respectively, while in 1888 they
rose s538.591,l37. Although records
equally complete are unavailable be
yond 1925, the Street estimates that
last months advance exceeded even
that of 1922.
The breakdown of values into their
respective groups will not be available
until next week, but judging by a sur
vey of indices some of the best gains
last month, as was the case last week,
were made in the foreign division.
Total foreign bonds during January
again taking an average of indexes,
rose 1879 per cent. Latin American
bonds were up 204 per cent, thereby
making the best group gain.
The rise in bonds, however, has
had important effects on many insti-
tutions. Banks that held huge guam
titles of low grade couponed issues
have utilized the upswing to switch
out of such bonds, either at slight
profit or slight loss, into United States
Governments or other choice invest
ment issues. Insurance companies
likewise have revamped their port
folioS.
Spectators Busy.
In some instances bond sale pro-
ceeds were simply kept in cash, so
institutions, especially commercial
banks, could loan the money If and
when they saw fit. In other cases
banks used the market rise to tighten
security collateral loans. Meanwhile
spectators, both foreign and domes-
tic, have added to their bond holdings
Public utilities, taken as a group
made the most disappointing showing
during the week. They were up the
barest of fractions because of State
and National regulatory proposals.
Despite the agitation against holding
companies, however. their senior Sc
curities have advanced an average Of
80 per cent since their lows of last
November.
First grade rails recorded the wild
est advance, largely because of a
heavy institutional demand. Indus
trials ranked next in the upswing. In
many instances corporate reports
clearly show the ability of companies
to meet maturing obligations without
recourse to the capital markets.
Second grade rails ranked third In
appreciation. Their turnover, like
in previous weeks this year, led all
other groups, as they were again ac-
cumulated by both foreign and do
mestic spectators. The average of
corporate bond prices did not register
as wide an advance as the preceding
week, but trading records were broken
so readily that it was impossible to
keep track of them.
Municipal Issues Up.
Municipal bonds were encouraged
by two Washington developments.
Secretary Morgenthau let 1t be known
that he would hold a conference next
Monday at which he would seek means
of aiding communities in financial
difficulties Secretary Ickes ordered
his legal staff to investigate the pos
sibility of selling some of the munich
pal obligations acquired under the
rules governing the operations of the
Public Works Administration. This
was interpreted to mean that some of
these bonds soon would be offered for
sale. A survey of the municipal
market indicates that it could absorb
such bonds as would be offered.
Government specialists directed at
tention to the extreme steadiness OF
fourth Liberty AZ per cent bonds,
about 81 ,0o0, 100000 of which have
been called for retirement on April
/. The specialists feel that the Gov
eminent soon will offer an attractive
conversion privilege to get these bonds
converted into long-term securities.