Evening star., 1949-07-03
Rise in j. ). Issues
Takes Spotlight in
Dull Bond Market
By the Associated Press

BY the Associated Press
NEW YORK. July 2.-The fast.
est price rise in years in United
States Government liens far out.
shadowed all other development!
in the bond market this week
Corporate bond prices continued
to plug down along steadily with.
out much movement up or down
The Federal Open Market Com.
mittee. composed of high officials
of the Federal Reserve System
on Tuesday announced a new
policy designed to aid business
The cautiously worded statement
indicated the committee woule
allow the prices of Government
securities to rise (and their in
terest yields to .falD.
This. it was reasoned. would
induce banks, seeking other means
Of investment. to liberalize COM
mercial bank loan terms.
Banks, seeking to buy early
before prices rose even higher
swamped the Government bond
houses with orders Wednesday and
prices of most United States bonds
were quick to respond. Demand
continued Thursday, although
prices climbed at a reduced rate
Pace Slows on Friday.
BY Friday the activity slowed
down to walk. At times Friday
morning some issues had taken
small losses. but when offerings
dried up completely in the after
noon bid prices started up again
and closed at highs for the move
ment.
Most notable feature of cor.
porate bond trading in the frs
half Of 1949 was the drastic dro1
in volume-an indication of trad.
ers' fear Of the unsettled bushes.
situation.
Turnover for the year through
June 80 totaled 1895 900, 900 in pal
value figures, compared with
1894. 100000 in the first half O.
l948.
This fear Of falling production
reduced national income, strikes
and labor demands for increased
wages, and rising unemployment
was not reflected. however, in bonc
price movements.
The only decline in the Associ
ated Press bond averages between
December 81 and July / was IL
that of the railroads. which hat
a net loss Of 1.6 points. at 88.6 TO-
the six months.
The industrial average helt
steady at 1920. while the utilit,
index advanced 1.9 points at 1921
and the low yield bonds 8 a
1895.
Foreign Issues Higher.
The foreign dollar bond aver
age steadily improving since tn,
end of the war. gained 6.6 point
in the first half of the year tt
close Friday at 69.6.
One result of the Federal oper
market committee's action was tt
give the tax exempt bond marke
one of its busiest, most buoyan
periods in many months. Com
mercial and savings banks appar
emily diverted a good slice O
their investment money into state
municipal and county issues ant
even the Stickiest of recent offer
ings were sold out.
The bond publication "Blut
List" reported the unsold inven.
tory Of tax eXempts on dealers
shelves shrank from $140,695 ,00l
at the beginning Of business Mon,
day to $99, 1861 900 at yesterday
close.
This was the lowest the inven.
tory has stood since February
and dealers will have a chance tt
work it even lower next weel
when, according to the publica.
ton Daily Bond Buyer" the tota
of tax exempt offerings will bt
just above $25.00o,000, a four.
month low.
Next week will be a slow perioe
for corporate financing. with new
debt offerings now in sight total.
ing less than $37, ,000. .000-most ol
this in railroad issues.
Delaware Power & Light Co. 1:
putting $10,000,000 of first col.
lateral trust bonds on the block
for competitive bidding Wednes.
day. IN addition to $4,000 shares
Of 500 par value cumulative pre-
ferred stock.
The railroad equipment trus'
offerings are Chicago & North
Westerns $6,600,000 and New
York Central's $11, 100000 or
Wednesday and Atlantic Coast
Lines So .685. 900 on Thursday.