The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-07-14

the purchase OF most convertibles, and they
nnd q market with a class Of persons who
nke the game but not the name OF speculation.
Bankers who seldom take on a stock have q
great fondness for convertibles. and they
appeal likewise to other cautious spectators
ana investors who want a chance OF securing
q better profit than is attainabls from the
hllgnt nuotuations or meagre income return
OF an ordinary bond. In this way the con-
vertibles, huctuating ordinarily in harmony
with the stock. inject a new interest into the
market movements OF stock, and It is often
argued that 1t is beneficial for a company to
nave them outstanding, for the reason that
tho influence and advice Of holders Of con-
vertibles. who are often consulted frequently
Tor advice on the market. prompt purchases
OF the particular company's stock even II
these convertible holders themselves refrain
from 1t.
On the other hand it has been pointed out
That q purchase OF convertibles 10 often made
as . hedge. The convertible gives . call on
the stock at . certain point, and an operator
selling short. but protecting himself with
convertible bonds. can get his stock by the
exercise OF his conversion privilege in case
the market goes against him.. The call
feature OF the bonds may be exercised in other
ways which, like the instance cited, act as Q
drag on an advance In the stock, and there
is also to be considered the great increase Of
suppy seooA po''io'o "no.-
ever the point Of parity Of conversion 10
passed. One Of the ablcst Of financial writer's
recently cited these objections as more than
oounterbalanoing the advantages Of the
conversion privilege.
Whatever theoretical opinion may be taken.
there can be no doubt that the new issues OF
convertibles and very likely many Of the old
ones are to constitute an important market
factor In the near future. In the case OF the
be presumed that the market activity already
created by the issue is to be permitted to
lapse with the closing of subscriptions. On
the other hand the failure Of the subscription
is assurance that the activity is to be con-
tinued, for the underwriting syndicate lie COM
nri.e. not only ths .i.rt tartiia minded and
wealthy finanoiers M the Union Pacific marty
h,t MANY 3nancier. VIC thonyh w.ndering
. hit from, their own arsaIde. have consId-
cred nartioi nation potential Of much gain. IL
will bs surpriaing N tina nnec,lative interest
already ATTACHING To Union Pacific. combined
with tbat which tbesa men are .hIs IN iniect
doos not brino about .ome imnortsnt market
movaments
-
A Nebraska banker, In town for the week.
gave an instance OF . resctionary feeling
against the anti-corporation policy of the
cial signiaoanoe by the bankers with whom
he conversed. In his section Of the State, the
Nebraskan said. there has been undertaken
In recent years the win industries OF sugar
beet culture and beet sugar manufacture.
Freight was A very important item Of expense
with the promoters of the new Industries, both
in transportation Of the raw product to the
factories and in shipment OF the finished
product from them. The mon who were to
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