Morning journal and courier., 1893-03-13

Hartford railroad stock was quite activ,
with many small sales to even up Investor
who wished to be able to subscribe for
exact thousands of the new convsrtibl,
four per cent. bonds; this month not Q sail
has been reported on the New York Stool
exchange. Notwithstanding the explicit
circular letters of the company many
investors have confused idea about the
"rights" and warrants" and quotations
for them. The circular letter of the com.
pany of December 10 gave each stookholde,
of record at the closing of the books on
February % the right to subscribe to
bonds at par for forty per cant. OF the par
value of his stock. For instance the
holder of eight shares of the par of $500
can subscribe for $s9o of the bonds. On
March the stakeholder Of the eight shares
received from the company three warrants
of 500 and Q fractional warrant of $40.
These warrants must be presented with
. remittance of SOS for each 800 warrant
and $3.50 for each 81, 900 warrant at the
Office of Dre1el, Morgan & Co., % Wall
street, New York, on or before April /. Re-
-mittances are not be sent to the Office of the
railroad company as the proceeds of these
bonds are to be held by these bankers In
Improvements of the property. Warrants
not presented by April are of no value.
The above holder of the eight shares must
remit $40 with the warrants, endorsing his
name on the upper form on the back Of the
warrant. As he also has o $40 fraction he
can sell II to another holder who has an $50
fraction, or can buy an $50 fraction and
forward with his $50, making another 800
warrant, on which $25 must also be paid
before April 1. Holders who have already
paid the first installment of 25 per cent
have an installment receipt engraved by
the American Bank Note company
showing the payment and giving
the periods when the other installments
Will be due. These receipts are OF the si.e
and general appearance of engraved stoek
certificates, which are used BY companies
whose stocks are listed on the New York
stock exchange. They are countersigned
by the Farmers Loan & Trust company.
Receipts of 81 900 are printed In black and
green and numbered T; 500 are In black
and brown and numbered on upper right
and left 81. On the back, In the place Of
the usual power of attorney, are three
blank forms of receipts In which are to be
endorsed the following installments, a.
they become due and are paid: No
interest will be allowed for prepay
ment. The title to the receipts Win pass
by delivery and not by power of attorney or
aasignmsnt. Notwithstanding the rights
so-celled have been replaced by warrants.
quotations by dealers are still given In
rights. A buyer wishing q $1,000 warrant,
must buy rights on twenty-five shares of
stock. If the rights are quoted at 90, the
warrant will cost $500. and other amounts
in same proportion. A $50 fraction equals
one-half right; $40 fraction equals one
right; $50 fraction equals one and one
half rights; an $50 fraction equals two
rights.
Several computations have been made as
to the conservative value of rights" and
stock at current rates. One of the Sim
plest Is to compare the cost of 100 shares
stock bought outright to day and 100
shares bought convertible into stock In
ten years.
900 shares Of stock at go COST. $4,000
go go rights go n,S cost; s, S9@
Total cost OF bond. 1900
Excess of cost of stock ever bonds $500
INCOME.
Ten per cent. dividends on 100
shares stock for ten years.. $4,000
Four per cent. interest on 10000
Add interest per can't. on $500
excess Of cost OF stock over
bonds, ten years. $500 1900
Excess of income Of stock ever
bonds to be deducted from first
Balance net gain In ten years OF
bonds over stock................ $500
Or equal to $50 per share or little more
than per cent. per year in addition to
A per cent interest on bonds. If the price
OF the stock in ten years Is say 1925, the
buyer day has q shrinkage of per
cent, while the buyer of stock through
bonds has an advance of AZ per cent II
stock In ten years should fall to 5000 the
buyer of to-day has q shrinkage Of so per
cent, while the bond buyer has an ad-
vance of 90 per cent, or In other words
the quotations of the stock may be, thu
buyer of bonds has 100 shares, costing
him, including interest and dividends, SO
per cent less than the buyer to-dgy of 100
shares of stooi-. So
A similar computation with the stock at
$50 and rights at 25 will show $3, $50 gain
on bonds over 100 shares of stock at the
end Of ten years.
Another computation of income, with In
terest compounded semi-annually, shows
a little over 4 per cent. on the stock and
about OF per cent. on bonds, calculating
the stock to be worth 5000 at the end Of
ten years The friends of the company
expect present dividends to be maintained,
and certainly IL the growth of the ordi-
nary business of the company for the next
ten years continues In the same ratio ss the
past ten years the dividend rate can be
easily maintained and considerable sums
expended each year on permanent improve
ments.
In this connection It will be we'll to
notice that If all the leased line stocks have
been exchanged the increased cost in divi-
dends to the parent company is only $685.
794 per year. In six years the Northamp-
ton company has 81 300, 900 first mortgage
2 per cent. bonds due. These bonds can,
If desired, be replaced with a per cent.
bond, making an annual saving of about
SAC, 900.
CLEARING HOUSE.
The New Haven clearing house reports
tine clearings of the New Haven banks for
the week ending March II as showing q
decrease from the corresponding week of
last year of $50, 047.04:
Rail