Sign v. Signal

Through no less than 102 underwriting firms headed by Morgan Stanley & Co., U. S. Steel Corp. last week offered the biggest single industrial bond issue since the Securities & Exchange Act--$100,000,000 in 3 1/4% debentures. Priced at 100, the bonds met a voracious demand from all over the U. S., jumped to a premium of 102. This was the chief item in the biggest week's volume of new bond issues in two years. Other principal offerings in the $205,394,000 total were Commonwealth Edison Co's. $33,000,000 in first mortgage 3 1/2% bonds at 102 1/4% which, sold through a group headed by Halsey, Stuart & Co., went as high as 104; and Commonwealth of Pennsylvania's $60,000,000 in 1 1/2% tax anticipation notes which C. J. Devine & Co. sold within one hour at a record low yield rate for Pennsylvania (.55% ).

Distinctly a bullish sign, this deluge of bonds was nevertheless no index of reviving times. Most of the issues, including U. S. Steel's, are intended for completion of plans laid down before Depression II began--much as Manhattan skyscrapers begun in 1929 were finally completed in the early thirties although owners knew they could not fill them. What Wall Street waits for as a signal of returning prosperity is a revival of new financing--i.e., money for expansion planned now.

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