Show BOND MARKET I ii AT PEAK POINT Hi Highest In 5 Years New U. U S. S Issue Oversubscribed Dy Dr BYRON SELLER 1 Correspondent of The Standard Examiner C Copyright 1927 Consolidated Press i r f NEW YORK Nov No The Im Invest Invest- Investment ment market closed the week with prices for lor the highest grade of se- se securities at the peak ak for 6 26 years cars AU AUthe Il the hesitation that marked the trad- trad trading ing In bonds for the past month or so disappeared and the movement was resumed Impressively One reason of course was the suc- suc succeSs success ceSs of the government go financing It had been expected that the new treasury 3 per cent cala cf indebtedness would be pl placed but the fact that they were nearly three times oversubscribed was wasa a 0 It went to show not only the of excess capital but that oI 01 oIa a constantly diminishing supply of gov- gov obligations Du Buying of other government bonds was Im- Im Immediately Immediately mediately and nearly all the outstanding In ing treasury Issues changed changet hands hand at atthe atthe the highest prices of record U. U U I AT 1 PAR Strength In Government bonds how how- however ever had been a feature ol of the pre pre- previous previous week The movement was ear car earned carried ned ried further this week but It was really nothing new The de development that was as of 01 even more from Irom the long range viewpoint was the bidding up of the first mortgage railroad rail rail- railroad road Issues For example Union Pa- Pa Pacific clUe 45 sold on Friday at par for lor forthe the thc Jut time since the early When a year Oar O- O ar railroad bond even Union Unton of 1947 sells on a straight 4 per cent maturity basis It Is 15 a graphic illustration of the has been made toward re- re restoring storing the low Interest rates of 01 the opening years ears or of the present century It Is 13 only six years ago that this sarre sante bond sold old at 78 or 22 poInts lower Other gilt edge railroad bonds have bc been n In comparable demand The fhe strength has been communicated to tor r middle grade securities to a c certain degree but speculative Issues have been affected What Is wanted Is a bond of Investment quality and nothing else Along this line the sups steps t taken by many corporations to- to toward toward ward simplifying their capital structure structure ture are important If a bond now a Junior lien Uen can be raised to the po- po of first mortgage by the retire retire- retirement ment of underlying Issues Its mar mar- market market ket status Is Improved at once It has been reported that the St. St Louis San Francisco Is planning something of this kind and the advance In that roads road's prior lien A 45 of 1950 is based on this That thIs bond could zeli almost on a 45 per cent bats bals Is In itself an indication of the character of the present market IW 1 GS Simultaneously with the gains In the thc market for seasoned bonds there thera has come a better InqUIry for new offer offer- Ings There are syndicates syndi- syndi cates cales and unplaced but they are mostly foreign obligations and only one of two of them Is of any large size The falling lallIng oU oft In volume of new offerings has helped the total this week weck haying having been around I as against over a neck Cek ago Two weeks ago the total was around end and In the week ended 22 the aggregate was There have bave been II a number of un- un unusually unusually usually interesting new offerings First and was the International Match 20 year S 5 per percent percent cent debentures prIced a point and anda a halt hal below par The proceeds of these debentures will be used by the corporation to acquire from the Swed- Swed SwedIsh Ish Match company out of a total issue of 01 government of the Republic 40 year 5 per percent cent ceni bonds The French government In turn will apply the proceeds to of 01 the 8 per cent dol- dol dollar dollar lar issue originally marketed In the United States In 1920 This Is t a solution that obviates any ruling by the administration at Washington on the desirability of new French ch financing on this side while the debt refunding agreement with the United States Is still It has lus agreed tilt sill along that French credit has proved improved so 50 much that a anew anew new new French dollar bond could be sold soldon soldon on a 6 per cent basis but there was always uncertaInty as to the attitude ot of oUI our tale state department Now the French have ha obtained the funds to Zd tJ their 8 per Issue on even en more favorable fa terms and the money comes from Irom American tn- tn estors News of this operation brought about an advance ad in the other French dollar dollar bonds especially the 7 which are non SUGAR ISSUE Another nother interesting new Issue was the Sugar first 71 7 running 20 years ears md and priced to yield about 72 per cent ThIs la said hald to tobe tobe be the tint lint MexIcan issue placed here since the days of the theDias Diu Dias administration A novel no feature is the Insurance which has hasen been en taken out to an amount equal to the par lalue alue of the bonds to be outstandIng covering risks ruu due to revolutions and civil commotion ol of any kind IncludIng log Ing confiscation or expropriation of the plant plank Without some such pro pro- provision vision slon It would probably have ha been to persuade American Invest Invest- Investors ors on to put their money Into an enter enter- enterprise prise wholly located In MexIco LIke bonds stocks closed the week strong The two markets are arc really affected by the same Influences The difference Is that easy money does not make stocks uniformly strong when there are so 50 many doubts about the trade position Wherever I divi- dividends are assured however howe and the stock Is of real Investment In grade the Idle capital seeks It out just as It does hIgh grade bonds This Is what has been back of the weeks week's recovery In the stock market |