Evening star., 1937-03-07
General Average Reaches
New Low by Small Mar.
gin in Week.
INDUSTRIALS REGISTER
MODEST Improvement
Low.Priced Speculative Liens Lead
in Volume-Recent Issues Still
Reflect Buyers Strike"
BY BYRON SELLER.
I nicnotrh m The Star

NEW YORK, March 6-The bond
market, in the listed corporate Sec
tions, has just about held its own
this week. BY a small fraction, the
general average has made q new
low, but 1t may be said that the
market has merely leveled of. There
is considerable bearish sentiment, but
arguments are so evenly balanced
on both sides of the future price and
interest rate question that quota
tions seem likely to be rather de-
liberate about registering the pre-
ponderant opinion.
On the week, the Dow-Jones 40
bond average shows small frac-
tional decline. Second-grade rails
were of about third of a point, with
public utilities down little more than
an eighth. High-grade rails were
shade better, and the industrial group
also registered mild improvement.
Low-priced speculative bonds, hav-
ing no stake in the discussion about
interest rates for the good reason
that they are not paying any interest.
ran away with the volume side of the
market. On one day the Dow-Jones
average of 10 defaulted railroad
bonds advanced about 2. Of q point,
getting up close to its record high
of 1914. Convertibles and other
issues with a speculative favor were
strongly stimulated, of course, by
the boom which developed in indus
trial and railroad stocks, their ad-
vances being commensurate with the
stocks to which they are tied by
privileges of conversion.
Reflect Buyers Strike"
Meanwhile, some bonds of recent
issue continued to reflect the buy
ers' strike" Great Northern 3As
were bid to about 2 points below
their recent offering price, with the
Northern States Power 3As down over
3 points in the bid price and the
Ohio Edison Co. 3%s also OF over
3 points. Some other issues, re-
Gently depressed. have been rejecting
Improvement.
The so-called "joy-riding" demand
for new issues-purchases by banks
and other large investors with the
practical assurance of garnering q
proft-seems now to have become a
thing Of the past. In other words,
the market for new flotations is def
nitely on a realistic basis. And that
may lead to the building up of a real
demand from individual investors Just
+ as soon as underwriters are converted
to the necessity of "sweetening" in
terest coupons
Some observers are pointing out that
the Treasury's abstention from raising
any new money" in its March Is
financing program may be looked at
in two ways. Either it is a true re-
Election of lowered requirements, or 1t
Is a case Of living of available funds
and fitting needs to the known reluc-
tance Of the current market.
Expenditures Higher.
However, the statement for the first
eight months Of the current fiscal year
reveals a deficit nearly s4o0, 0,000, 900
less than in the same period Of the
preceding fiscal year. But that favor
able comparison has been brought
about entirely by an increase in re-
ceipts, for expenditures were slightly
higher than in the comparable period
a year ago. At the end Of February
the Government debt was $34,600.-
780,711, compared with $30,519, $50 ,949
year earlier.
Offerings of new corporate bonds
showed a decline In February, the
total having been 1915, ,920, 900, against
$402, 1896 900 in January. But there
was large increase from February,
1886, when bond offerings totaled only
s177,S62, 900.
Congestion Still Exists.
High-grade municipals have been
going quite well lately, but congestion
still exists in number Of recent issues
not yet satisfactorily distributed.
Among new issues now ION the fire.
is an offering of $4,000, 900 of the
Philadelphia Electric Co. securities
scheduled for next Thursday. The
boom in demand for iron and steel and
the big rise in the common stock of
the United States Steel Corp. has re-
vived rumors of coming financing for
that concern which may take the
form of new stock issue in lieu of
cash on preferred dividend arrears,
as well as mortgage security offering
to raise cash for improvements and
extensions to plants.
The New York Central Railroad has
asked permission from the I. c. c. to
issue $4,29O, 900 of 2A per cent equip
ment trust certificates, to mature in
IS annual installments ending on
March Is, 1852. And the trustees of
the Chicago & North Western have
applied for permission to sell "a, ,460,-
600 Of az per cent equipment bonds.
Copyright. 1887, By the North American
r.