The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-06-01
English Capital Seeks Place
Outside United Kingdom.
France Too Wants Some New
Subway Bonds.
PAY HIGH RATE OF INTEREST
New Market Offerings VIII Pay
) Per Cent.
Large Amount of Money VIII
Leave New York.

New York, June Although the
new subways and their supplemental
elevate railroad lines, which have
at last been agreed upon by the city.
by the corporation, are to be a purely
local institution. not subject to any
federal supervision or regulation.
nevertheless the raising of the money
necessary to build and equip these
subways and the actual building and
equipment of them are of national as
we'll as local importance. 1t is not
to be wondered at that underwriting
syndicates have agreed to market
two hundr and seventy millions of
the bonds by the sale of which the
be ecured For although the amount
is without any precedent in corpor-
alton NEUTRALITY-SUSPICIOUS. a few of
the very large corporations which
are engaged in interstate commerce
business-yet the work itself for
which this money is to be paid is of
a magnitude unparalleled by any
municipal undertakings in this coun-
try or any other.
To market not only the two hum
dred and seventy millions of the
bonds which are needed by the cor
poration, but also the large amount
of bonds which the city itself must
issue so that it may fulfill it's own
EAAotS VI NAS AS0AA NAAh IN
public in this country and probably
to some extent in Europe will be
called upon or offered a chance to
subscribe to these issues. Already
limitations are heard that the two
underwriting syndicates know that
they could easily market a considerable
portion of these bonds in Europe.
The understanding is that London
much of whose capital is eagerly
seeking investment outside the Brit
ish kingdom, will be found a good
market for these bonds, and the i'm
preston among bankers prevails that
France will also gladly accept a con-
siderable portion of them.
When the bonds are all marketed it
will be found, doubtless, upon trac-
ing them to their final owners that
they have passed into the possession
of investors who live in every state
of the Union.
One of the reasons upon which the
underwriters base their belief that
these bonds will find a ready sale is
the fact that they will pay 8 per
cent interest. That rate will consti-
tute these bonds about the only Sc
curity behind which stand unim-
p~eachable credit which carries as
high a rate of interest as that; for
the very high grade railway bonds
if they carry interest in excess of
Az per cent usually command a pre-
MUM.
In the next place.. these securities
are not to be all at once.
They are to be issued from time to
time in accordance with the need for
funds. The entire line of bonds may
not be for some years. For
that reason the offering of any con-
siderable amount of bonds is not ex-
pected to affect the money market.
There ave been evidences this spring |
hat a security behind which stands
very high credit is eagerly sought by
investors, although the permanent in
come basis of the securities is not in
excess of 4 per cent. The recent Of
fering of sixty-fiVe millions of New
York city bonds was oversubscribed
about four times, and the average
premium for these bonds brought the
permanent income basis down to
about 4.21. 1t is expected that
when these bonds are offered in. the
open market, or in the course of a |
few months, they will readily COM |
mand a premium which will bring
the permanent income basis down to
4 per cent.
"A Feature of the Spring Financing.
All of the conditions now prevail
Ing in the money market seem to
show that there is a very large in
vesting public eager to accept offer
which stands very high security. Short
time railway notes are eagerly grab
bed up. A recent issue of twelve mil
lions in notes of the Boston & Maine
found an almost instant market. The
New York Telephone had
only to offer twenty millions of bonds
to find ready buyers in this country
and in Europe Recently the indica-