The Newark star and Newark advertiser. [volume] (Newark, N.J.) 1909-1909, 1909-11-23
?. S. C. BONDS ARE
SOLD BY PRIVATE
SUBSCRIPTIONS
Quarter of SS,OOO,OOO Issue
Reported to Have Been
Snapped Up by Investors.
J. P. MORGAN & co. ENTER
JERSEY FINANCIAL FIELD
New York Banking Firm and
Drexel & Co. Underwriters
for Securities.

Financial circles hereabouts were
greatly surprised today when it became
known that large block probably one
quarter Of the ss.Oo0.oO0 bond issue of
the Public Service Corporation--had
been quietly disposed of by private
subscription. The fact that the public
Offering Of these bonds Is being, de-
ferred from day to day makes the pri-
vate sale announcement all the more
interesting.
The Public Service Corporation, 1t
will be remembered, executed mort
gage of $50.OO0,000 upon its properties
| to secure the issue OF $50. 100000 per
cent. bonds. The purpose of the issue
was to retire $7.250,0o0 of collateral
notes and the balance outstanding of
approximately $5o0000 Of convertible
| notes and for such improvements and
the betterment OF the system as condi-
items require.
Under the security of this mortgage
IS, ,000, 900. of bonds were issued, and the
underwriting taken up by J. P. Morgan
& Co., of New York, and Drexel & Co.,
of Philadelphia. The price agreed upon
in the underwriting of the bonds is not
definitely known. but speculation has
persistently placed the figure at S21z
The private selling SO far has been at
961s, with interest
These bonds were formerly executed
and delivered to the underwriting COM
panies as of date of November l last
but there has been no offering of them
for public participation. The Fidelity
Trust Con. pany, of this city, was desig-
mated to act in conjunction with ]. p
] Morgan & Co.. and Drexel & Co., the
Fidelity having charge of the under
! writing for the syndicate in the State
OF New Jeraey.
There has been considerable specula'
ton in financial circles as TO the delay
of the underwriters in offering the
bonds to the public. 1t was supposed
that subscriptions would be called fol
early in November but thus far nc
4 steps seem to have been taken to invite
public participation. The STAR today
| discovered that while there has been nc
public offering there had been con-
| siderable private participation, and
when a STAR reporter called at the
Office of the Fidelity Trust Company for
information the officials there refused
to discuss the subject and referred the
reporter to Mr.. Newbold, manager for
the banking house Of Drexel & Co.. al
Philadelphia. Mr.. Newbold, it being
asserted, having direct charge Of the
matter.
Mr.. Newbold discussed the subjec'
freely with a STAR reporter over thu
long distance telephone. He said:
Yes, 1t is true that we are dispos
ing Of bonds at private offerings. The
bonds are dated October /, and wers
delivered to us at that time, but there
has been no public offering because WI
have felt that the time to do so wa,
not ripe. We first started to offer ths
bonds in private on November l among
our customers, and the responses havs
been very satisfying"
| Mr.. Newbold would not state the
exact amount of bonds disposed of. but
admitted that the STAR reporters in
formation that $2.000,0O0 had been sub
scribed was a fair figure.
] 1.-THE time Is not ripe to make a pub
lie offering IL an easy and convenient
way to put IT, said local financier
THE real explanation of the delay is
that the bond market is now somewhat
! lethargic. Money is plentiful, moreso
indeed, than at any time In a decade
at this season of the year. Stocks
have offered a much more attractive
return than have bonds, and as a con-
sequence surplus money has been in
vested in this security rather than in
| bonds.
1.-The underwriters are waiting fol
4 a. fx,or. orf in the hnnd Epf
| which 1t is confidently expected win bt
seen after the beginning of the new
year. In the meantime the public offer.
ing of the bonds will be withheld"
The Fidelity Trust Company, while
making no effort to dispose of tbs
bonds, is receivi nginquiries from in
vestors. From such investors it has
been learned that they have been al
lotted certain of the bonds at a sub
scription price of 961s and interest.
This price is considered very attrac-
tive for per cent. investment. Early
next year, 1t is believed by flnanciers
it will be impossible to buy the bonds
for less than sS and interest.
The announcement made that j. p.
Morgan & Co. had agreed to under
write the securities caused somewhat
of a furry in financial circles. 1t is
well-known that J. P. Morgan never
lends his name to any financial venture
until his banking house has established
the soundness and stability of such un-
dertaling. In the present case, it is
known that a physical examination OF
the Publ Service securities was made.
| The agreement of J. p. Morgan and
Drexel & Co. to underwrite the securi-
ties of the Public Service Corporation
is considered by high financial authori-
ties as stamping the Public Service se-
curities with an authoritative approval
| that will impress investors, not only
| in New Jersey, but elsewhere. 1t was
J. p. Morgan's first entrance into the
financial field of New Jersey, and it lis
believed to be 4 forerunner of the adj
mission of other financial giants into
the local security field.