Salt Lake Telegram | 1932-05-12 | Page 4 | Three Main Causes of the Decline in the Bond Market Listed

Three Main lain Causes of the i Decline in iii the Bond j 1 Market l Listed 1 I. I NEW YORK By y James iames McMullIn Certain Investment trusts are arc doing I a little quiet accumulating of tics The craze for liquidity had a I reo lb their incomes out of all nIl prone tion to their resources Now must be increased to meet atio Officers or of of one Investment s had used their personal holdin ot of the company's stock as collateral for bank loans The banks closed down on them last Jast week and th the company's stock dropped several points point of the liquidation The company ha since been buying in iii Its own stock in an endeavor to support the price but is now noi beginning to wish it hadn't a t a There are lre three causes for the con COn tinned decline of the bond market One Is the fear that the will be depreciated cur currency current icy The second 1 Is Is- the fact that federal reserve purchases are arc confined chief ly Jy to short term Issues Long tong term governments are slumping in con con conse ws quence The third Is the Interstate com com- merce commissions commission's announcement that the Frisco will have to be eor if it It expects further help from the R. R F F. C. C This is Interpreted interpret in m some quarters as meaning further deflation in railroad bonds 0 g a aA A period of railroad Is apparently inevitable It will vill not be as widespread as is commonly supposed J Pacific Missouri Rock Island an and Erie Eric may be he among those that will have to revise their financial structures tures There will not be many others New York Central Is by no means out of the woods It has heavy fixed char charges es and there is no assurance that It can meet its maturities In Decem ber bel of this year The Pennsylvania's application to the R. R F. F C. C for a loan of will soon come up for decision Cor lain tain New York banks have been ap- ap to share the loan with the R R. F. F C. C and may do so The Toe total loan will probably be cut in half hat and the R R. F. F C. C may not contribute more than third one of or the amount awarded The I. I C. C C. C decision on Frisco might prove a bl blessing ing In disguise I. I C. C C C. indorsement of ot applications for loans will hereafter be construed as a guaranty of soundness sound ness for the railroad in question