The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-07
BONDS DISPLAY
IMPROVED TONE
AS FAITH RISES
Prime Liens Stable at Tops,
While Others Reflect
Renewed Demand.
By Times Special

By Times Special
NEW YORK, Oct. Increasing
evidence of improved business senti-
ment, inspired by the mutual under
standing reached between govern
ment, banking and industry, is be-
ing reflected currently in higher
prices for fixed income obligations
of most categories Primary liens
remain in demand around their
highest levels for the year. with the
average yield again at the July low
point of around 38 per cent, while
intermediary and some speculative
issues already are beginning to dis
count expectations of expanding in
dustrial operations in 1885.
Although conceding that the eX-
tent of next years recovery move
nent will be determined by devel-
opments affecting commodity prices,
students of the bond market ex-
pressed confidence that Washing
tons more conciliatory attitude to-
ward private initiative will exert a
constructive influence upon long
term investments. For this reason,
it was pointed out in various quar-
tiers, fairly long extended recov-
cry in bond values, with coincident
lowering of the returns obtainable
from lesser quality securities, is en-
visioned as an early prospect.
Thin Market Prevails
Due to the dearth of new capital
issues in recent years, existing bonds
have been absorbed by permanent
investors to such an extent that the
floating supply of available securi-
ties is recognized as being relatively
small. This has brought about a
condition operating to accelerate
upward movements in prices and to
minimize declines in liquidating
market. Periodic investors, especial
ly, appear to be taking advantage
of this factor, now employing idle
funds in medium grade obligations
to a considerable extent.
The preference shown for inter-
mediary issues, authorities ex-
planned, is motivated by the appar-
ent security of principal and yield
at prevailing quotations, generally
about midway between the highs
and lows for the year. Such pur-
chases are made primarily for cap
ital appreciation purposes and are
liquidated when consolidating move
ments make their appearance. This
procedure, incidentally, is advocated
by numerous observers inasmuch as
too many uncertainties still exist in
the economic situation to forecast
long-term trends with accuracy.
Southern Railway Liens
Demand of good caliber has beer
coming into the various Southern
Railway bonds of late at prices
where good value is believed to be
represented in their respective clas-
sifications. Among such issues are
the first consolidated mortgage 81
of 1894, the development and gen.
eral As, IS and 612s of 1856 and the
subsidiary Mobile & Ohio collatera
trust 4s of 1888. Prices of these
securities currently range from
about two points below par for the
first mentioned bond to a discount
of more than IS per cent in the
case of the last.
For the first eight months Of
1884, operating revenues of the sys'
tenn we're larger than those for thu
corresponding 1888 period. Income
available for fixed charges, however
we're smaller, rejecting increased
maintenance charges and large,
transportation and other expenses
About II per cent of the first eigh
months charges we're earned in thu
period. Expectations are that, fol
the year as whole, the carrier viii
earn about IS per cent of it.
charges, contrasted with 96 per cen
last year, 3S per cent in 1882 anC
81 per cent in 1881.