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Show EASY MONEY POINTS TO . HIGHER BOND PRICES , Roger W. Hiibson Sees Opportunity . j For Investors During the Balance of the Year. ' Wellesley Hills, Mass. May 25, 1923. "Should the investor buy -. long term bonds now or wait in hope of getting them at lower prices?" The question is upermost in the minds of the investing public. A !gain of two points in conservative : bonds since last March has been wel-come wel-come enough, but there seems to be a great deal of discussion as to whether it is the beginning of the long swing upward or whether it will be offset by another reaction such as that ruling in the bond market of the first three months of this year. Roger W. Babson's statement on the situation, issued today, presents evidence which deserves careful consideration con-sideration by everyone interested in the future of investment securities "Money rates are easy," according to Mr. Babson, "and will continue at about their present position for some time to come. "January saw Commercial Paper at 41. per cent on the average. In February it rose to 4 and three-fourths per cent. March brought it slightly above 5 per cent. In AprU it ruled. at 5 and one-eighth per cent. Early May brought it back to 5 per cent. Present indications are that it will continue a; about this same level thruout the summer. Time Loans have been made by the banks on about this same basis, while Mortgage Mort-gage Money is available in the East at 5 per cent to 6 per cent. "From tne point of view of the bond market this easing in money rates indicates a slackening in the demand for commercial loans, an increase in-crease in reserve on the part of our banks and a shrinking up of the increased in-creased credit necessary to finance the sudden spurt in business at the beginir,! of this year. Since it is the habit of our banks to invest surplus sur-plus funds In bonds as reserves grow, and to liquidate these bonds when commercial needs demand increased borrowing on the part of the general business public, It means that the aanks of the country have turned from a policy of selling their holdings hold-ings to a policy of buying them bark again. While there are no figures available on the effect that bank purchases and sale3 have on the general gen-eral investment market, it stands to reason that the banks represent the largest single customer for bonds in the country and that their position must have an effect on bond prices. When the banks were selling they not only removed their purcha.Mnc power from the bond market but flooded it with their own holdings. When they reversed this position the stream of bonUs that has-been coming com-ing Into the market from the bank i is shut off and they offer purchasing power not only for new but also for old issues. As long as they are buying and holding their bonds, prices cannot can-not very well go below present levels, and should evidence a slight strength enlng. When wo examine the outlook as to the possibility of the banks changing chang-ing their present position we see but two factors which might cause such a shift during the balance of the yea j "If in reaching the peak of its Ions' swing bull movement, the stock market mar-ket develops into a feverish spurt. I' may be necessary for certain of our banking interests to liquidate bond, holdings in order to provide the ca"h j necessary for stock loans on a high t price level. This might came n ', temporary sag In bond prices which j would be recovered as the flurry sub-j sided. If the advance In the stock' market does not develop Into a spree of speculation but proceeds on r.n orderly basis It probably will have a slight effect upon bond prices. "The other factor to be considered 13 that of crop moving which 'always puts a seasonal strain on our financial finan-cial machinery beginning about lb" first of august and ending the hit er part of October. This seasonal d- maud for additional creUit may force commorclal rates up a fraction, probably prob-ably not more than Vi of 1 per cert. ThU probably will cause a slight r'- cession In bond prices. It may ii. .. I howovor, offstt an advance thv is possible between now and that Mine. "All present Indications point to I easier money and higher bond prhe, J during 1'.i2i. I doubt very much whether It will Im possible II) buy I Kood Investment bonds next year at j luiywhoro near their present levels. ( From the long swing point of view ' statistics clearly indicate that the f,'i!iiural treiid of bond prices will be upward over the next tiit.vn to twenty years. "From the Investors' point j -lew the present bond market v'-'i ;; a ical opporlunlty. Prices m ly t ! i o I I i K 1 1 1 y on either Qf the two developments develop-ments outlined above, hut 1 am nit at all sure that the Investor who waits and tries to pick thes,; o:ii t low points will save enough to make up for the Interest he may lose In the meantime. If you are buying securities secur-ities for a regular Income 1 snipes. that you buy sound, loui; term IioikIh now, mid that you continue to buy thein for the remainder of ltll) im I'niids become available." General business is holding Its own in spite of the slackening of trade In some lines. The Index of the Hub-' Ronchart shows general activity at 5 per cent above normal within 1 point of Ihe high point for this year |