New-York tribune., 1908-08-16
The Financial World.

foruance. in which some extravagantly manip.
ulated stocks were boosted spectacularly.
Even before the intrusion of Of hi,
fagrancies Of the past fortnight there had coma
10 be a feeling that too hot bull pace ha5
been set-WalI Street was moving overcast IN
its .discounting' processes-naktng quotations
iustIfabIe only by the genuine re-establlsn-
ment of high tide prosperity-prosDects capital
ized as though equanmg actual realization of
new national good times. The list was long
of advances beyond 20 and 25 points-gains of
10 points popularity regarded as trifing; and
transactions tOtalling over a million shares
per day Yet-and the admission was brutally
frank-there were few signs OF any public
participation monOpOizing the
Board
Prudent investors are able to discern tha,
under current conditions they have better PROM
ise of profitable return by buying bonds rather
: than active stocks. In the bond list are a
multitude of bargains. for that section OF ths
I market has been neglected by the manipulators;
and the large absorption in evidence there rep
resents public appreciation OF the different els-
ments that have been ruling in the Two depart
ments Of the Exchange Securities backed By
the absolute value Of mortgage are availabls
prices which speculative stocks are not yield
I ing Smelling a per cent. stock, is 20 points
i above where high grade 4 per cent mortgage
bonds sell. Lead, an industrial mystery. Is
higher than gilt edged bonds The table ot
contrasts is amazing and long But no such
anomalous thing ever lasts. Moneys real valus
prohibits. The earnings OF security and tha
safety Of II are what find final reflection in mar
ket price-and II is no part OF sanity 20 imagine
that a stock which yields less than bond and
! is safeguarded less can nope Iastlngly 70 havs
apparent superiority
Whether average conspicuous stocks go up Or
90 down IL is unmistakable that there are Stock
Exchange bonds of character bound 70 rise
From any viewpoint they are too low. Ths
market rate for money makes this clear Cur
rent conservative investment requirements
sure it. The higher figures Of intrinsically less
valuable stocks only add to the certifcaton.
Apropos of comment in this review a week
ago. an inquirer writes: Granted that you
have selected of the best secured first mort
gage railroad bonds in the market in the Mis-
souri,. Kansas and Texas first and refunding
| mortgage As considering its yield Of $50 per
| cent of what rank in the investment field ara
| the NJ, K. & T. securities?
President Underwood of the Erie Railroad.
addressing his Board of Directors and reyiew-
/ ing the effects of coal strike upon Erie earn
/ ings some time ago. officially said:
"A more serious menace. and the chief one 20
which the Erie is exposed. is the growing export
trade of the Gulf ports The distance from Chi
! cago tidewarer is about the same whether %
| Gulf Atlantic ports, but the former have the
I advantage Of practically Water-level routes.
| while the Eastern trunk lines have 20 haul
| across a. mountain chain Formerly Ne could
| rely upon the fact that nearly all the shipping
| came this point. but now that the shipping
| has a tendency to go to the Gulf the only thing
| TO be done about it is TO put lines in the
| best possible condition to handle the business
| expeditiously and at low cost our competitors
recent years and we must do the same
| The X. 7. IS the natural pathway to tidewster
at its Gulf terminal of Galveston. and It's great
est interchange of business is with the c. B &
| O.. with which il connects at Kansas city and
| Hannibal Mo. Few people IN the East. even
amongst the officers of investment institutions.
realize the growth and population OF the section
traversed by this railway Our new state OF
Oklahoma starts off with inhabitants exceeding
twenty six older states OF the Union, lnciudlns
Nebraska and California The President has
recently released 100000 acres of Indian lands
for settlement and cultivauOn-6O per cent OF
which is on the line OF the NJ. K & t This
land is to be settled under the Homestead laws.
requiring actual occupation within four months
Just as Vermont and New Hampshire farms
were deserted a generation ago. farmers are
disposfng of their farms in Illinois and Iowa and
settling in the Southwest As trade follows the
flag does railroad income follow the producer:
What bond Is OF higher rank in the minds OF
investors than the Union Pacific railroad land
grant. first mortgage Is. issued at the rate OF
100000 per mile? Yet to the Kansas lines OF
the NJ K & T the land grant from the United
States Government Ito which they are entitled
| by the same terms as the Union Pacthc) has
not vet been confirmed These lands estimated
to be worth $50 00O O0O) are To be considered an
equity behind the mortgage indebtedness OF
the pr5pertv-no less conservative a turist than
Joseph H Choate having. after a deliberats
canvass of the facts, become the representative
of the railway company to maintain It's claim
before the United States Court Of Claims Here
is asset that can in itself. if realized add
100 points the price of X T. common stock
| selling in the market around 81
The entire bonded debt of the K. T road Win
| it's sixteen sectional mortgages amounts only 10
sS4 900 per mile. and the First and Refundins
Mortgage As. of which but s5.1S2000 are out
standing are a first and paramount lien on
s24.3SO.00O of property without which the ROAD
could not be operated
Many uniformed investors are of the opinion
that the h T is still connected with the Could
System. whereas it is an independent system
of 3,1OO miles of railway. and il has been lnde-
pendent since 1883. Penetrating the cotton oel,
, of Texas. whose output constitutes One-ulHu
of the entire cotton yield of the United states.
still cotton comprises only about > per cent Cs
the roads total diversified traffic. althousn u
| hauls One-half of the entire Texas crop - -
percentage Of passenger traffic IS higher on Ins
! X. T. than on any other road Of Ike rank III
| that territory.
The destiny Of the X. T is assured And. IN
/ cidentally. il can be noted that the IL h & :.
| was exceptional in not being obliged 20 come
| into the market for money during the dTaSt-. dTs
| squeeze in rates Good management i Ss-.'-S
| right results from every point OF VleW-G4t
that's why in this re view il is recognized llSA
| NJ X & T is entitled TO have rank in the n,
! vestment feId''-an opinion indOrSed and atIsu
upon by the foremost bankers of Europe WheIe
to-day a majority Of the COmpanys securities
/ are confidently held -.
! NJ h & T. first and refUnding mortgage p7'
/ cent bonds are in the very best sense an a.
I tractive observation-disclosures not only assures
| but appreciation in market value sure
The reasonable attitude of the investor al
/ market juncture like this in looking 10 assured
! value rather than to mere speculative posSi-
bnity is fortunately attended By abundant 0S
portunity for profit signifying example az
pears in the Smelling group The cuTilu-dtles
preferred stock, Series Z. Of the American
SmelterS Security Company serves as an eSSs
CiaIlv apt illustration. II pays per cent CIV.
dends-and it's dividends are guaranteed ne .
guarantee comes ahead OF any dividend ma S,
can be paid upon either the preferred or uo
common stock of the American Smelting Conl-
pany-the latter company not only guaran9es, =,