The Washington herald., 1912-10-19
THE BONDS THAT
never FLuCTUATE
,ces,.ishs. ,ss, b. G. n, Kss NJ Ya.,

/
A few yearl ago business man sought
competent sdvics about Investments. Il
| want" he said. "something that viii pay
| me about ~ per cent on my money and
give me the privilege Of getting my
money back whenever want n do
not want to have to wait . month and
do not want to have to make . big
sacrifice. What do you know that dlls
those requirementsr He smiled - he
asked the question. for. Of course. he
did not believe that there was any such
security In existence"
With due apology. and after making
the usual reservation ~ TO panics. special
conditions. &C. his banker told him to
put his money into q certain note issue
which bears . ~ per cent interest rate
and was then selling at ~ and interest
The customer did - he was told. Once .
month for the past three years the
banker has received . letter from the
customer asking for the price on these
notes. Once the price was look and in
terest. once II was ssS and interest.
tween thoes two figures. and on almost
every date Il was within u of per cent
of what the customer paid.
There has been no panic intervening.
there has been nothing Of special impor-
tance happen to that particular company.
The only difference In real conditions
has been that, whereas At that time II
was more than three years to the date
Of maturity. these notes are now matur-
ing and payable 100 cents on the dollar.
The customer 10 now looking around for
something else Of the same sort. He IL
business man and he wants to feel
that all his invested money Is at the
same time money in hand. He knows
that he can get more than ~ per cent
with safety. but he Just has . feeling
that some time he may just happen to
want this particular money and he does
not want to tie II up at all.
HIS situation illustrates very well
special class OF investment business
that has grown very greatly during the
past flve years or SO. 1t II the invest
ment Of business funds. There are
thousands Of business houses through
out the country which have at times
considerable money lying idle which
they would like to use at interest II
ket At quick notice The accumulated
surplus Of the business which may
some time be put back into the busi-
ness or paid back in the form Of dfvi-
dends or profits 10 often idle for long
periods. Good business men recognize
that It 10 wasteful to leave 1t lying
idle in the bank at per cent. or moth
Ing. a. the case may be. and they like
to put It away where they can set at II
quickly.
The kind of notes picked out BY the
customer. whose experience has been
described, ID the standard form Of such
investment Promises to pay certain
sum Of money in two or three or four
years and made by the great railroads.
the great industrials, the great cities
or ths great public utilities Of the coun-
try are very solid securities. They
don't dYctuate very much In price. be-
cause the slightest little decline makes
great difference In the yield on the
investment. For instance. II . per
cent bond has one year to- run and 10
selling at 100. II yields per cent; but II
II sells at % II yields 8 per cent II the
same bond had twenty years to run. II
would have to decline from 100 to s.
to increase the yield to the investor
from per cent to per cent.
OF course, there are lots of other
notes OF corporations which meet these
requirementS. Old bond Issues that are
nearing maturity. revenue warrants L.
sued by cie1ss. prime commercial paper
running for ninety days or six months,
equipment trusts are all delt In by
standard dealers to meet these require
menta All have their advantage. As
. matter Of fact It 10 an easy matter
to put away money temporarily ct .
good rate Of interest without much
change Of losing any Of the principal
II y also sound common sensa. The
buslnsss man Who has good sound
bonds - other liquid securities Will md
that his bank approves quite stroagiy
Of the practice and viii compliment
him On his common sense In putting
away the IDLE part Of his surplus IN
that way. II b . mighty good thing
for . buslness man to b abls. every
now and again. to substitute . eollstsrall
han On stiAdasd securities Of the highsst|
ciass for some Of his borTovinsS cal
ccamercial paper.