The Waterbury Democrat., 1934-12-31
1884 Saw Big Change
 In Municipal Bonds
Financial Recovery of Cities Was Accompanied By a
 Swing From Highest to Lowest Prices in History

] New York, Dec. 31--No branch Of the securities business has ex- perienced greater changes within the past year than the municipal bond field. The financial recovery of cities throughout the country has been accompanied by a swing in the prices of many municipal bonds from the lowest to the highest levels in their history. In the early months of the year only municipal securities of the high est grade were saleable at any price and there was literally no market for second or third grade munic- ipals. In the latter part of 1884 some of the high grade municipals were selling above United States Government securities, while cer- tain second and third grade bonds had recovered from fifty cents on. the dollar to around par. Munic- qualities with unimpaire credit standing were able to borrow at record low interest rates.
 The causes underlying this rise in prices have been based not only on an improvement in the intrin- sic value of the securities, money market conditions and the scarcity of other new issues of securities, but also on the very real improve ment in the financial position Of municipalities throughout h country. Among the factors con- tributing to the strengthening or municipal credit, II believe the following are the most important:
 I. Drastic economies in gov ernmental operations including R..u ing. elimination of waste in ad- niinistration, etc.
 2. Marked Improvement in tax collections during 1884. A study shows that the tax cOllcc- ton curve. which had registered a severe decline for the three preceding years. seemed at last to have leVclcd off and startd up- ward. Reasons for this improve nlent cited by municipal finan- cial officials include general bus- mess recovery, application Of strict methods of OilectiOn, the resort to tax receiyership d prompt tax sales, increased pen aities for delinquency, "Pay Your Taxes" campaigns and the employment of instalimcnt pay nents.
 5. The activities of the public works administration and the Home Owners Loan Corporation have had a constructive infiu- ence. The F. w. A., which i'll 1883 granted more loans 10 municipalities than private cap- ital, has continued to make loans fot construction of public works in m intelligent and able man. ner. Several times during the wear it re-sold to the public. bonds purchased in the past at considerable profit to the govern- nent. Activities of the Home Owners Loan Corporation un- dcubtedIy contributed to the iin- prOvement in tax collections.
 4. Public officials generally stopped playing politics when confronted with financial crisis and acted in an intelligent and courageous manner when such action was necessary to preserve the credit of their cities.
 s. For the first time in many years, the tax payer and voter were aroused to the point of giving attention to city prob- lerns. The importance of this development cannot be stressed t0o strongly because it means that for some time to come the taxpayer will examine city bud gets and watch municipal Offi- cials to prevent a recurrence of past extravaganza.
 8. The successful consumma- ton of refunding programs, ac- companied by a recovery in the prices of securities affected,