The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-02-21
IMPEDING
BIG ABSORPTION
OF POWER LIENS
Many Bond Issues Drop as
Uncertainty Continues
in Utility Group.
BY CHARLES III. HUFF
Times Special Writer

ity group, notable chiefly by con-
trast with activity in other corporate
sections, is explained in some quar-
tiers as due to more than uncertain
ty in the Federal aspect of the power
| industry.
Portfolio managers are described
as closely watching the legislative
programs in various states, with an
eye directed particularly toward AL
bany. The view, it is explained, is
not so much one of apprehension as
feeling that weeks ahead may in
ject disturbing notes sufficiently to
cause psychological unsettlement.
With a stretch of that kind Just
ahead of the market, investors are
inclined to stand back and wait un-
til the horizon is definitely cleared.
This attitude has affected high
grade utility issues as we'll as those
of slightly lower rating. The
highest grade bonds in the group
have been giving up ground day
after day, not to any large extent,
but somewhat steadily and definitely
contrary to the generally firm tone
for high-grades of other classical
tons. AS result, many of these
investment issues have become avail
able m the market at margins be-
low recent high prices.
Utility List Hazed
From the Federal angle, the sky
over the utility issues is at least
hazed by the destiny of the Federal
holding company act of last year.
States are adding to the density of
the haze by the introduction of a
variety of regulation measures pe-
fore Legislatures now in session.
There is nothing especially novel
in that situation, but bond men ex-
plain that it never fails to slow up
investment ardor in the market.
The utility bond market also has
lost some of its more recent
momentum, due to temporary lull
in financing operations by units in
that particular field.
Distant maturitieS of the Erie
Railroad have been pushing steadily
toward higher ground as investment
confidence in that carrier has been
strengthened by fairly stable traffic
reports. Even slight drop in rev.
enue cars handled during January,
as compared with figures for that
month of 1885, failed to check the
price uptrend, marked in recent
days by successive new high levels
for the refunding IS of 1867 and the
SIS of 1875. Both of these issues are
up into the sos as compared with
lows around So less than a year
ago. General lien Is of 1896 and
consolidated as of 1853 have drawn
close to 80, representing consider
able gradual price recovery within
year.
Ample Help at Hand
A sustaining force for these Sec
ondary issues has been found in the
strength maintained by the roads
first consolidated As of 1896, holding
we'll above par.
There is considerable reinsurance
toward the Fries position gathered
from the fact that the road has no
early major maturities, and ample
help appears to be at hand for
relatively minor near-term obliga-
lions, such as bank loans, debt to
RFC and equipments.
The road, in fact, drew close to
covering fixed charges in 1885,
falling only 1882, 400 short, with the
bulk of traffic improvement crowd
ed into the last four months of The
year after less favorable early re-
suits. Continued improvement in
the general railroad situation, it is
believed will enable the Erie to be
put soundly on its feet, despite
something of reversal in current
position during 1885. A bright note
is found in the roads present plans
to expand equipment with PWA
aid
Reports that new construction is
now about double that of year ago
are sharply reflected in the market
action of the recently issued Inter
national Cement convertible As of
1915. Offered less than three
months ago at par, the bonds have
0ored IN above 10d