Evening star., 1934-01-08
SECURITIES MOVE
NARROWLY IN WEEK
Junior Rails Make Best
Showing of Domestic
Corporate Bonds.
BY BYRON SELLER.

Special Dispatch to The Star.
NEW YORK, January 8.-Securities
moved narrowly last week, as is ira
ditional during the first week of new
year. Some groups halted their ad-
vance of the preceding week. others
paused in their downward path and
still others remained virtually un-
changed.
United States Government bonds felt
the budget message of President
Roosevelt, though specialists in Gov
ernment securities insisted that the
deficit figures used allowed for maxi
mum expenditures. Some quarters were
inclined to emphasize the huge bor-
rowings required over the next six
months, but other commentators
pointed out that these funds were ne
cessitated largely because the Govern
ment was financing municipalities, rail-
roads and industries.
Liberty and Treasury issues paid no
attention to the introduction of the
soldier bonus proposals-which in the
past always have proved selling argu-
ments-but responded Slightly to Sena-
tor Ashurst's proposal to tax future
Government issues, which, OF course,
would cause outstanding tax-free bonds
to command a premium.
Municipal Issues Up.
Municipal bonds continued their up
ward course, as many incoming city
administrations voiced their determlna-
tiOn to reduce expenditures.
Second-grade railroad bonds made
the best showing in the domestic cor
porate division. Their upswing was
started by dealers, who accumulated
them on the theory that present earn
ings and car loadingS have not been
discounted marketwise.
The railroad industry was inclined
to await Co-ordinator Eastmans re-
port and recommendations for trans
portation 1t expressed satisfaction
with the Interstate Commerce Commls-
sion report. which made no legislative
recommendations, but wondered just
how the industry could, as the report
suggests, do more of its financing
through shares rather than bonds.
Prime railroad issues, along with
equipment trusts, were moderately &C
tive and not much changed. Annual
earning statements and further retire
ments aided industrial debentures and
mortgages Public utilities alone failed
to show improvement.
News Affects Utilities.
Three pieces of news during the week
influenced utility security movements
The North Carolina utilities commits
sioner rigidly restricted payments OF
dividends by utilities. the issuance OF
additional capital stock and the rates
of depreciation. The next day PreSi-
dent Roosevelt in his message to Con-
gress indicated that the Tennessee VAL
ley Authority might be regarded as the
forerunner of other projects of similar
nature. Gov. Lehman of New York
in his message to the Legislature urged
quick development of the st. Law
renee River power resources so that
municipalities in this State may be
given "a potent weapon with which to
compel existing public utility companies
to provide them with electricity at rea-
sonable rates under the threat OF
municipal competition"
Ofsetting these developments, utilities
had only the stimulus OF the rise In
weekly power output and several favor
able earning reports. Power produc-
ton for 1888 was slightly above that
of 1882, but gross revenues were less
and taxes higher.
The attainment of new high levels
by foreign loans during the week re-
suited largely from the bidding up OF
German and Australian issues. The
former reflected the protest OF the
American Government against proposed
interest rate reductions to bond holders
here, following similar protests by other
nations. The latter movement was a
belated recognition of improving Aus
tralian finances, long since recorded IN
London. where the commonwealth sold
bon0s recently on favorable basis.
Neither the various revolutions In
South America nor the politically upset
conditions in Cuba had much effect on
South and Central American bones.
(Copyright, 1934)