Evening star., 1941-01-01
Government Issues
ht New Peaks Near
End Of Year
Bonks Have Handsome
Profits in Prime Bonds,
Expert States
Bv PAUL ID. GESNER.
Associated Press Financial Writer.

ASSOCI2fNu Press ElLo4C.d4 H-4--i-
NEW YORK. Jan. Limited
States Government securities, in
prime demand for investment pur-
poses by banks. life insurance COM
NAMES and other Cash-laden finan-
cial institutions, swept upward to
the highest levels in history as war
torn 1910 veercd toward its close.
In the final days Of the year some
Federal issues tapered slightly from
the record peaks, but dealers SAID
the price softening was no sign Of
weakness. II was, rather, a shading
of values as big banks switched from
one Government issue to another TO
reap realized profits,
Paced by the Governments. scores
Of American corporation bonds, m
cludlng industrial, utility and rail-
vav oblieatiOns. also took the up
ward route in the last half OF the
year. and many recorded new highs
for 1910 or longer in NOvember-De-
Ccmber trading.
European dollar loans did not ~
so well. Scores tumbled abruD' ..,
giving up 50 to IS per cent Of thr~
market values as German arm~d
forces occupied one tiny indeperdCu
country after another in the Ma
June westward invasion sweep.
Serious Iid-Icar SlumD.
In May markets generally tur-h'-
as Germany invaded Holland. E.
GUM and France. Obligations G.
German-CccupIcd countries sank --
many cases to nominal values Of %
to u cents on the dollar. Weak a,.0
were many British flag iseUee. il
Guiding Australian and New SON
Wales loans, as German bomb b.
gan raining heavily on England
Securities Of the invaders srTrrrI.
too. Down sharply were Cr.usn
and italian loans. also those =
Japan as that Far Eastern u7..1g
aligned itself as a par,uc- u tie
BoTlin-POme avis.
The Federal Reserve. trror.l
open market operation .~a~ MD
year purchased United -... .oz CO..
ernments to support then valves.
k1t- uNl, ~ rs e., I-4'.
the general bond market .1-d s0-.r
its course and scores Of is.uc- ~r.a
on the upward path again. B7u-r
and the bic life companies. ve-.5
buIging with idle cash wldCrcd 6r--
ing Of Governments for investur q
portfolio. Yields on the Un--t
States issues were low. All ma"u--
ties commanded premiums over par.
But financial institutions reasoned
that some interest return was better
than nothing The floating suppl"
Of good CO~pOyateS had been r00
small to meet active demand for
years.
The beginning Of the final 1910
quarter found corporate bonds. g.
p5cially the prime loW--icId ISSUES,
yegainine the bulk Of miGycar I0s.0s
And the upward trek II value cs
Federal loans. railway lesucs and
industrial obligations continued
into NOyerlbcT-Decenber.
Tax selling was an UEse''hrg far
tor in the bond as we'll as the s-o~s
market in the closing DAYS Of the
year. This selling affected bo'g
prime and low-pTice ISSUES.
+ Numerous banks. on the one hzl@.
went into December with handsome
/ profits in their Government bod
accounts. This brought selling or
switching of the Federals to esra~-
lish realized profits. Dealers g. Il
many banks reasoned il was bette
to take profits Immediately and n-~
the normal tax on realized NrC.'z
than to wait until 1871 when the -7-
rate might BE- higher and there
might not be profits to take.
/ AT the other extreme. some :~-
vestOrs sold CHEAP corporate rrt
fore-gn issues to cs.abIsh losses .r~
income t2y purposes.
Now corporate reouritics Of I
for public sa'a during the yca~ -, %
rrecatcd around s2.8I7.Q00007. '.-7
largest total since 1895 and C~ e
pared with S2l19,0J0O00 in ,.'
Most Of the offerings We're --f.r--
ing issues. designed 10 redure CO.