Evening star., 1948-09-19
Reserve Action Fails
To Stir Market for
Government Bonds
py The As,e<ioisd prsss

NEW YORK. Sept. ls.--Activity in
la few railroad and utility loans.
mostly based on special situations,
gave the bond market 4 few signs
of life this week.
Rail demand accounted for good
part of the markets business and
the utility interest centered In
American and Foreign Power. for
which Federal Court approved re-
organization plans.
There was q hurry now and then
In United States Government bonds
on the heels Of the Federal Reserve
Boards boost in the reserve require
ments Of its member banks.
But the Reserve Boards action
failed to create the selling pres
sure that was anticipated,
Utility Bonds Jump.
American and Foreign Power IS
advanced "a points to 96 as the
week ended, apparently rejecting
bondholders' satisfaction with re-
organization plans.
The Jump ahead came Friday after
q decision in the Federal Court al
Portland, Me.-The $7S0, 900 900 COM
pany is a Maine corporation with
properties in Central and South
America.
In effect. the Federal Court up
held Securities and Exchange Com
mission approval after second pre-
ferred stock interests sought to
have the reorganization plan modi-
fed in favor of junior stockholders.
REORGANIZATION of American and
Foreign Power. a subsidiary of Elec-
tric Bond and Share company,
stemmed from holding company
breakup provisions Of the Public
Utility Act of 1884.
The company proposal included
paying of its s50.000,00 debenture
bonds in cash and an issue of new
bonds to first preferred stockhold-
ers, plus new common stock.
Second preferred stockholders
were to receive fractional shares
of the new common for their hold
ings, a proposal to which they OBJ
jected. They also did not like
provision for payments to Electric
Bond and Share for its investment
in the company.
U. S. Issues or Slightly.
United States Government bonds
we're inclined to drop slightly in
er-the-eounter dealings during
the week, but on Friday they stuck
pretty close to previous levels as
the Treasury announced that it
would offer new one-year certifi-
Gates of indebtedness bearing 1h
per cent interest on Monday.
The new certificates are designed
to attract re-investment by holders
of some $6,913.092, 900 Of per cent
securities which fall due October l.
A S75 100000 offering was in the
cards as the week ended. Michigan
Bell Telephone Co. fled . registra-
ton statement with the Securities
and Exchange Commission covering
that amount of 40-year debentures
for public offering.
The company will use proceeds to
repay" advances from its parent COM
pany, American Telephone. 'N4
a Transit Liens Decline. 81
Third Avenue bonds took Z pre-.
weekend drop on the heels Of a
little bad news. The IS Of the New
York Transit Co. fell q point
Friday to close the week at 40. -. - =
The declines came as the New
York State Public Service Coinnis-'
sion authorized an interim Scent
fare on privately operated buslines
in the New York City area. The
companies had asked 7 cents.
While total bond sales for the
week were not startling, the $l3,-
753, 500 figure was an improvement
over the previous weeks $l2,566,-
500.
The Associated Press bond aver
ages showed the foreign dollar list
took the sharpest dip during the
week-a drop of &.
Railroads were down Il and in
dustrials dropped 2. Utilities i'm
proved 2 and low yield bonds L.