The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-08-28
LOW SELLING
PRICES FOR
SECURITIES
Market Conditions Are In
chauged--Fair Demand for
Gilt Edge Local Bonds.

Low prices for good local securities con-
tinue in the market, fair buying Of long
term 4 per cent. bonds this week not caus-
ing a rally in the bid or selling price OF
trolley, electric light and gas securities.
As a rule, trading has been light this
week. but there is quite an.aetive call Tor
the bonds of public utilities companies
and the last issues of Newark and Essex
County bonds, and also for Public Service
certificates. No bank or insurance stocks
have been sold by brokers.
Thousands nf dollars have been drawn
from local national bankA and trust COM
panies to invest in local and railroad bonds
and stocks. There is considerable money
being withdrawn from savings barkS also
for the purche sc of interest paying bonds.
People with cash balances In the local
banks are investing in bonds that pay =
per cent interest a year because the ma
,ional banks do not, as a rule, pay inter-
est on deposits, and because of the low
market value of bonds 1t is reasoned that
IL the stringeney In money shall continue
and serious financial trouble come Newark
and Essex County bonds at a fraction
above par are cheap and also safe, for the
financial condition of the city and the
county is excellent. The payment Of IN
terest on the bonds IS as certain as death,
and there is a general belief that the city
anu county DOIluS VIII duNdhSS ~ value
in n couple@of years.
AS printed in the EVENING STAR last
Saturday. the local banks are n6t making
large cash loans except on gilt-edge Sc
c~urities and none of these will give the
amount asked for by a borrower, even
we'll known manufacturers. and business
men with small capital cannot get loans
in amount exceeding their capital. Men
vino have Il capital of $1,000 to $4,000 have
been in the habit of borrowing from a
bank double those sums in order to buy
IL large stock OF raw material. But they
and others have been told that the banks
have no money to spare, and that even
the best customers must reduce the amount
of loans they want. Manufacturer are
having trouble in making collections fol
goods on time. Banks are getting . TO 7
per cent. on outside loans.
A good deal of the money drawn from
local banks and trust companies is be-
ing invested in stocks, railroads like the
Pennsylvania and New York Central, both
of which pay an annual dividend of IL
per cent. on their stock, ever In hard
times. But the bulk of the buying OF
these stocks is because Of their present
Tow market value and the belief that
when money is easier the value Of the
stocks will increase, and the fact that in
any case the money invested in them will
earn a dividend instead of laying idle
in a bank, or being loaned by the bank
at a good interest rate for its own benefit.
Interest Is taken in Newark financial ano
Investment circles in the issuing of 10000,
600 of municipal bonds by New York city
at AZ per cent. an increase of half of
per cent. in the rate for the city bonds fol
a long time. An old Newark hnancier SAID
the New York municipal authorities made
a mistake last spring when they paid con
tractors in city bonds instead of cash, fol-
the contractors. needing ready money, wen
into Wall Street and sold the bonds, wortt
then above par, at IS to IS. He said tina
after $500, 900 of bonds had been sold Il
individuals cover the counter" that manner
of disposing of the bonds was stopped
Had 1t been continued, he said, he was Ger
tain the citizens of New York and ~societie:
and associations would take all the bonds
issued, as was lone in Newark when on,
issue of bonds was offered to and taken BY
citizens.
There has not been much trading IL
local securities this week." a local broker
said, 'but l have sold a good many bonds
to individuals. But institutions are no
buying"