Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1889-09-10
DEMAND UNSATISFIED
The e. C. Frick Coke Company Bonds
Going Off Like Buckwheat Cakes.
WHOLE ISSUE WANTED AT HOME.
Light Thrown on the Manner Of Placing
Mortgages on Western Farms.
ANEW DEAL AT THE STOCK EXCHANGE

The demand for the H. C. Frick Coke
Company bonds, amounting to $500, 900,
the placing of which has been entrusted to
the Fidelity Title and Trust Company, OF
Pittsburg, is SO far from being exhausted
that it is almost certain the entire amount
will be absorbed by local capitalists. Con-
siderably more than half of the issue had
been disposed of up to the close of business
yesterday, and negotiations were pending
for more. The prospects of the coke trade
are so favorable, and the security so un-
doubted. that these bonds are considered
gilt-edged investment.
Secretary McVeigh, of the Trust Com
pany, said yesterday evening: 81 have had
my trunk packed for week to go Eas. to
dispose of these bonds but I have about
reached the conclusion that the journey will
be unnecessary, as, from the extent of the de-
mand for them, and the inquiries regarding
them, it is almost certain the entire issue will
be marketed here within few days"
Stocks and oil commenced the week dis
couragingly dull, but they developed feeling
| of stability and confidence sufficient to build
| hopes upon of an early improvement. When
any given article is able to sustain itself in the
| absence of buying demand, it affords the best
proof in the world that it possesses enough of
| intrinsic value to protect it against material
| depression. That is the condition of stocks
and oil. They are both good properties and
must grow in demand as the necessities for
their use increase. They may be handicapped
| by manipulation for a time. but they will
| eventually come to the front on their merits
and receive encouragement and support from
| discriminating investors.
The proposition to amend the rules of the
Exchange, so as to allow of trading in stocks of
| future delivery was disposed of yesterday. In
the shape in which the amendment passed sales
| and purchases of all stocks on the ticker-board
| may be made deliverable on the second Thurs
day after the transaction. This will give the
| brokers ample time to arrange for the transfer
of certificates. The adoption of this amend
ment, though not all they wanted. is considered
quite victory by the reformers.
Considerable of what has been written of
late in relation to Western realty mortgages is
so one-sided and unsatisfactory as to be under
suspicion of having been inspired by interested
persons. As the subject is one of great inter-
est to Eastern capitalists, anything that will
throw light or the manner in which the busi-
ness is conducted cannot fail to be read with
interest, and possibly profit The Record and
Guide, publication of high standing and
large influence. after full investigation of the
entire subject of Western loans sums up its
conclusions in the manner following:
On the part of small investors there has long
been growing distrust of railroad securities
as source of safe and constant income. The
agents of mortgage loan companies have taken
advantage of this to push their wares in the
Eastern markets, and with results not at all
pleasing to those trying to dispose of stocks
and bonds. We believe it is quite generally
admitted that in many of the Eastern cities
the rate of interest has been very perceptibly
stiffened if not raised by this process
of raking together the small capi-
tails and sending them to the West.
The interests involved are SO considerable that
much of the investigation" on the part of
newspapers and others is undertaken, not to
get the facts. but to prove point. Bad crops
for q series of three years in Western Kansas,
and excessive competition on the part of those
anxious to place loans, have also resulted in
vexatious delays and serious losses, which leads
even disinterested observers to regard Western
securities with disfavor.
The number of companies and persons anx-
ious to make loans in the West and to dispose
OF their securities in the East is past all esti-
mate, but they can be grouped in three general
classes First, there is a man who acts merely
as the agent for the Eastern money1ender
placing the loans for commission, but assum-
ing responsibility. A large majority of all the
local attorneys and real estate agents through
out the West do more or less of this sort of
business. 1t is obvious that lenders ought to
have full assurance of the honesty and
good judgment of such men before re-
posing any great confidence in them. Secondly
there companies that loan money at their
own risk, deposit the mortgages as collateral.
and issue debenture bonds at a somewhat lower
rate than their own loans are bringing Thirdly,
there are the regular loan and investment COM
panies, big and little, that place loans from
their own capital and then dispose of the orig
inal securities in the East, either with or with
out their added guaranty. Many of these COM
panies keep regular travelling men on the road
disposing of securities "by sample" the same as
SO much hardware.
There are wildcat loan companies, as there
used to be wildcat banks. They organize with
little or capital, push far out on to the from
tier where the rate of interest is high and the
value of the land uncertain, and thrive nightly
so long as fortune-including the crops-is
favorable, but in the end collapse leaving in
vestors with nothing but a tangled mass of
claims that profitable chiefly to the lawyers.
Some entirely responsible companies however.
have steadily pursued the, policy of moving
West, not only to secure the high rate of in
terest, but because the rising value of land in |
new districts improves the security each |
year that the mortgage runs. Yet it |
must always be borne in mind that land values |
are much more liable to iuctuate in a new |
country than in an old one. Even a short |
series of bad crops may almost depopuate a |
new district and render the land unstable for |
the time being. 1t must also be remembered
that the foreclosing is usually an expensive |
business at the West and that the money!
lender will do well to keep well up with the
session laws of each State in which he operates.
One of the largest and most conservative COM
panies claims to have been obliged to foreclose
only one mortgage in 3OO To secure such re-
suits loans can not be made for much more
than 40 or so per cent of fair valuation of the
land mortgaged.
RATHER BULLISH,