Evening star., 1949-09-04
Bond Market Steady
As Customers Follow
Wait Policy

Wait d-See Policy
By n. c. Johnson
Asseeiatsd Press Finaneial Writer
NEW YORK, Sept. Corpo
rate bond market customers hav
developed q new wait-and-se
policy.
The policy involves holding OF
on buying and selling securitie
until a. clearer picture of wha
business conditions will be in tn
fall Is obtainable.
The new policy helped to kee!
bond prices steady this week
Brokers moaned. however, it swep
much of their business away
The weeks corporate bond trad
ing on the New York Stock Ex
:hange dropped to $10,040,00t
lowest for a five or six-day ses
sion since one week back in 1915
The previous week turnover wa
only $11 ,388, 900, lowest since 1917
It wasn't so many years ag
that a good days trade woul'
equal either one of those figures
From the price standpoint. tn
market accomplished little. Thu
Associated Press average Of q
rail issues gained 0.1 of a poin
during the week, closing at 91.3
The industrial average was un
changed and utilities moved a
head 0.2 at 1912.
Cut Work Week Is Factor.
The tendency to wait and see
was particularly evident IN trad
ing in railroad bonds.
The new 40-hour week TO
nearly 100000 non-operatin
railway workers chiefly is respons
ible for this. Before Septembe
/, these employees worked 4S hours
The problem is to what exten
the New York schedule will dii
into rail earnings. already on tn
decline.
Bondmen said it should take
month or two to get a clear pic
ture of how the railroads Wi
fare.
Treasury bonds perked up Il
the last two sessions OF the wee
and in some cases reached thei
highest bid prices of the year.
Actual sales were small, how
ever, and most of the activity ap
peared to come from price bar
gaining among the Government
bond houses.
Several factors emerged, never
theless, that would tend to en-
nance Treasury obligations in tn
eyes OF the banks. Among thes
we're:
l. Persistent rumors the Fed
eral Reserve System is about t
lower the rediscount rate. Thi
is the interest rate at which tn
Federal Reserve banks lend fund
to member banks. Such actor
would give the banks additiona
funds to use for investment, mucl
of it presumably in Government
securities.
2. The belief that long ant
short-term Government issues ar
underpriced in comparison to me
dium-term obligations. Thi
would trend to advance the price
of long and short-term issues.
In addition. some financial dis
trict sources said, bankers pai'
particular heed to the recen
monthly letter of the Nationa
City Bank of New York. whicl
took a cautious view Of improves
business conditions in July an
August.
New Securities Due.
1T would be imprudent to coun
too certainly on general indus
trial expansion. the bank sale
If many banks feel this wa.
Treasury bonds will continue t
enjoy far more popularity as ban
investments than business loan
The autumn rush Of new Sc
curities to market will get a
early start next week as FAR a
State. county and municipal Is
sues are concerned.
Business enterprises are tarry
ing, however. and it will not b
until later in September that ne'
corporate financing hits a fas
stride. The only corporate deb
issue in sight next week
Chicago, Rock Island & Pacif1
Railroads $3,552.000 of equipmen
trust certificates, up Thursday 10
competitive sale.
The coming weeks tax exemp
schedule will total $4S,271 ,04t
more than double this week
$23 3.802, 900 Of State. county an
municipal issues. according to tn
publication Daily Bond Buyer" "
The weeks biggest offering wi
be the State Of Connecticut's $40,
100000 of one-year rental hous
ing anticipation notes Thursda!
other major items on the list in
clude $3.50. 900 of bonds by Coo
County, ILL.,, 100000 by Detrol
and $l,75o,0O0 by Chattanoogs
Tenn, all on Wednesday, and So
080 900 by Austin. Tex. and -.
100000 by Minneapolis. MINI
Thursday.
Business Groups
lxs u.l.