Railroad bonds and other high-grade bonds performed well during the crash, as investors sought safer investments after pulling back from stocks and call loans. At the same time, the yields between high-grade and lower-grade corporate bonds (rated BAA and below) reached their widest level in 1929, so the riskier corporate bonds were flat to down. That sort of market action—equities and bonds with credit risk falling and Treasury and other low credit risk assets rising—is typical in this phase of the cycle.
