This did not prove to be true. The
larger cities were able to do new
financing on just as favorable terms to
themselves as before Federal taxes
were reduced, the high degree of safe
ty compensating for the loss of a part
of the advantage from tax exemption.
Along this line the advance to a new
high price for the year in the past
month of the Liberty 3}fcs was signifi
cant. On July l all the other Liber
ties lose tax exemption except for the
comparatively_unimportant amount of
$5,000 to any one holder. Transfer of
funds by wealthy Investors into the
3}*s brought about a striking price
appreciation, but the corresponding
selling had no effect upon the taxable
Government bonds.
With regard to corporate obliga
tions, the only group in which there
has been any sign of wavering was in
those high grade railroad Issues com
monly known as “legal.” Taking
Atchison general 4s as a typical bond
in this class, the current price is
on a 4.40 per cent basto. While there
had been predictions earlier in the
year of an advance to a flat 4 per
cent yield this appeared less likely In
recent weeks.
UtililVs in High Favor.
No BUch limitation Is in sight for
the high-grade utilities. These are
now- in higher favor than at any time
since before the war. As a class public
utilities command a higher investment
rating than at any time in years past.
Slowly but surely they are working
toward a parity with railroad bonds
of equal rank.
