The Washington herald., 1913-07-05
GOOD THINGS ON THE
BARGAIN COUNTER
Copyright. 1918. by c. Nj. Keys, New
York;

York;
These are the days Of strange ex-
periments in finance. Out In St. Paul,
Mimi. where the city had failed to sell
the necessary bonds to finance some Of
its operations. a group of public
spirited citizens. headed apparently by
Mr.. James ]. Hill and some OF his
friends, went in and offered to buy the
bonds from the city, and then placed
them on sale in the department stores.
OF course. they were made in little
pieces of SO and upward, so that al
most anybody could buy them.
Something similar happened in Phil
adelphia, except that the city itself
went into the retailing business. and
sold the bonds over the counter. In
half a dozen other communities expert
ments of a similar sort have been
made. generally with fair measure Of
success. Even in New York certain
small amount of the city's obligations
are said TO have been sold over the
counter of a department store.
At a time when such measures are
necessary to get rid of prime securi-
ties. with which the public is familiar.
1t is hardly necessary to say that even
more fantastic measures have been
necessary in the placing of new loans
of other sorts. The great railroads
and the strong public utilities of the
country have met this little crisis in
fina ncial affairs by the very simple ex-
pedient of Offering their securities at
lower prices than they ever offered
them before. For a while. one can OBJ
tain prime short obligations Of the
strongest railroads in the country and
of the strongest industrials and other
corporations at prices not to approach
even those in the panic of 1907. Al
most all this financing, of course, is
lust for a year or So That means
that the railroads and other corpora
tions make note issues running Tor
only one year, and promise to pay them
off promptly, say in 1914
OF course at a time like this, the real
bargains are, to be found in the long
term issues. If the prices Of long-term
bonds, running for twenty or forty
years, are SO low that it would be I'M
profitable for a railroad to do its finan-
cling by issues of this sort, and it OF
crates temporarily. II is because Its
board of directors and management feel
that the time will come when 1t will
be possible to do very much better In
a long-term bond. II this judgment Is
correct, then these long-term bonds are
certainly selling at much lower prices
than they will sell in the future, and
the prudent investor who does not sim
ply put his money away for year or
so at a time will go looking into the
list Of standard long-term bonds for
prime investments at very low prices.
He will not have to look very far. The
first honest banking house that he writes
to will be able to give him list of as
many bonds as he likes that are selling
at the lowest prices they ever touched.
or within a point or so of their low
prices 1t does not matter whether the
investor wants gilt-edge bonds. middle
class or speculative bonds. That state
ment can be made of almost any class
In the very high-grade securities which
used to yield him per cent he will be
able to get 41-2 per cent. In the mid
die class investments that used to give
him 41-2 per cent he will find he can
get per cent, and in the class that
used to give him per cent he will find
II not at all impossible to get 1-2 per
cent, although it must be said that the
5 per cent class has held its prices bet
ter than the other classes mentioned.
Therefore. II 10 q time of bargains. for
the prudent investor. Nobody should buy
foolishly. or blindly. and any man who
has money to use on interest can put
81 to work intelltgently today. in the full
belief that not only will it earn him
q better rate of income than at any
other time In recent years, but also that
Il will appreciate In value as time goes
by.