Evening star., 1949-08-14
Railroad Bonds Lead
Il Generally Advancing
: Market During Week
~ ths Assoeiotsd Press


NEW YORK, Aug. 13.-Railroad
hens stood out in front of a gen.
orally advancing corporate bond
market this week.
Demand for carrier obligations
stemmed from anticipation OF a
favorable decision on the request
for higher freight rates. and from
expectations that a general busi-
ness upturn this fall would help
mend the ailing financial positions
of some systems.
The rails made their boldest
upward move on Monday, but
favored issues continued the rise
in other sessions. and the Associ-
ated Press average Of 20 carrier
liens touched q five-month high on
Thursday 1T Gil. A decline Of i
Of a point on Friday trimmed the
weeks average advance to g Of
q point.
Three other averages-for util-
ity, industrial and low-yield
bonds-attained highs for the
year during the week.
Industrials Advance.
Industrials touched the top of
1925 on Friday: utilities reached
their high at 1889 on Wednesday
and held that position: the low
yield average climbed to 111.4
on Wednesday before receding
slightly.
During the broad advance Of
the rails. gains of l to 2 points
were freely scattered over the list.
Dwindling volume of trading late
in the week narrowed the price
changes and brought an irregular
pattern to all corporate bonds.
Although $4.355. 900 par value
Of bonds were sold on the ex-
change Monday in one of the
largest sessions Of the year. ac-
tivity shrank after that to q low
Of s2.705, 900 on Friday.
: For the week. volume Of $15.-
710.30o compared with $17,071 900
Ia the preceding five-day period.
Treasury Bonds Gain.
United States Treasury obliga-
tions. especially the bank-eligible
issues, extended into this week
the rise they enjoyed in the pre-
vious week. Bid prices pushed up
around " Of point on the over
the-counter market Monday. the
first trading session after the open
market committee of the Federal
Reserve System ordered reduc-
ton in bank reserve requirements.
The committees action Is expected
to add 81 SOC, ,000, 900 by Septem-
ber / to bank funds available for
investment.
Although full effect of the re-
duction is yet to be felt. and ac-
tual sales of Governments were
reported Of only moderate vol
urne. closing bid prices on long
term issues Friday were well
above those Of q week earlier. For
instance, the 21as of September
1s72-67 were bid Friday at
los 22/32, up 1882 from the end
Of the preceding week.
Principal discussion In the field
of new financing this week GEN.
tered on the announcement that
Canada is planning q 500, ,000, 900
offering In the United States Of
25-year az per cent bonds. In
terest and principal on the obliga-
tons will be payable in United
States dollars.
The issue will be registered with
the Securities and Exchange Com
mission at Washington "in the
near future" Canadian. officials
said. This was taken in bond cir
cles to mean sometime next week,
possibly Wednesday.
Inventories Declined.
Underwriters were reported
making encouraging inroads on
unsold inventories of bonds of tax
exempt state and local govern
ment issues. Among the issues on
which the books were closed was
the $50, 800 900 of New York City
Housing Authority bonds.
Inventories of railroad equip
!, ment trust certificates were said
: to be only . fraction Of what they
were q few months ago. while un-
derwriters anticipate a falling of
!. In the volume Of such financing in
the next few months. 1t was
pointed out that orders for new
freight cars have been reduced
sharply, leaving purchase Of new
diesel locomotives the principal
item to be covered by such Ger
tiflcates in the near future.