Evening star., 1936-07-05
Federal Government Issues
About at StandstiII
During Week.
DOW.J0NES AVERAGE
OFF AGAIN SLIGHTLY
Morgenthau Statement Contains
Nothing New-Interest Saw.
ings Declared Illusory.
BY BYRON SELLER,


NEW YORK, July AFTER getting
close to the highs of February and
March, the bond market has rounded
off, with the curve slightly downward
Trading has been dull, with little tc
mark the dealings in corporate issues
while United States Governments
have come just about to standstill
This week the 40-bond average COM
piled by Dow-Jones shows a decline
of about the same proportions as in
the previous week; that is. around Is
And again the second-grade rail group
was down about half point. High
grade rails and utilities we're only q
shade lower, while the industrials
turned small fraction higher.
Secretary of the Treasury Morgen-
thau's fiscal year-end statement con-
tanned uothing new, his promise of ar
ultimate reduction in the total nationa,
debt, through recoveries on various
loans to individuals and institutions
and through eventual application oi
the stabilizatiou fund to debt retire.
ment, is something long taken inte
account. And talk that Federal ex.
penditures are on the decline need.
to be backed by little more evidence
and experience before it will be taker
seriously. Savings on interest rate.
are an illusory saving, for no one ha!
ever saved much by continually pill.
ing up debt, even in a cheap mcney
market.
Continuation FOreseen.
Another voice has been added to the
chorus of those who are convinced
that interest rates are to remain low
until"
In an address before 400 bank off.
cials at Rutgers University. Harold G
Moulton, president Of the Brooking!
Institution, said that this situation
dow interest rates and yields on securi'
ties) will continue until such time a.
the fiotation of new securities for pri'
vate capital development furnishes
normal outlet for corporate and indi-
vidual savings.
As soon as new corporate issues
reach considerable volume, Interest
rates will begin to rise and the prices
of high-grade securities-and Of Gov
erament bonds-will decline.
In view of still existing busines,
uncertainties, it may be quite some
time before a significant change
occurs"
Talk is again rife in the financial
district of impending action-some
say perhaps this month-to reduce
top-heavy excess reserves by raising
reserve requirements by rs or so pei
cent. since credit extension show:
not the slightest sign of growing ur
to present possibilities, 1t is doubtful
If any such cut would be of more thar
academic interest. 1t would be some
what like a fanlily's deciding to shut
of an unused attic.
The real significance Of such action
If 1t comes, may be an intention tt
bring surplus reserves down to con-
trollable proportions in advance of ar
easing of margin requirements or
stock collateral loans.
FlotatiOns Decline.
With total new fotations this week
somewhat under half those of last
week, the aggregate for the past fort
night exceeds s250,000. 900.
Corporate financing. including re-
funding, for the month of June, 1896
totaled about S451 300 900, compared
with around s237, 1000, 900 in May ane
about $138. 100000 in June, 1885. Jul!
is expected to record some decline
For the first six months of this yea
the total was s2,246,176,344, againS
only $665 ,338,556 for the first half O.
last year.
(Nonvri1ht 1QAAl