Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-01-25
PUBLIC DEMANDS
$500 BONDS, BUT.
SUPPLY LACKING
Scarcity Reflection on Busi-
ness Intelligence of Financial
Community, Says John Muir.
BY JOHN MUIR.

NEW YORK, Jan. 24.-The open
ing of the year finds strange sit
uation in the bond market
On the one hand there IS the gen.
eral complaint Of the difficulties ahead
in floating bond issues with the ad-
ditional handicap of meeting the
many short term notes pending ma
turity.
on the other hand is the eager and
vigorous demand which is clamoring
for the 500 bond. 1t is no exagger-
alton to say that many sound $1,000
bonds are a drug on the market Yet
the demand for issues of the smaller
denomination has swept the market
clean of a majority of the more de-
sirable issues.
The extent of this demand is in
Dictated by the fact that the bid price
of $500 bonds runs l, 2 and per
cent above the price of the $1,000
bonds of the same issue.
Some Idea of the manner in which
good 500 bonds have been taken out
of the market by investors is indi-
Gated by the fact that such 500 is
sues as Central Vermont 1st As, Chi
cago, Burlington and Quincy extern
sion As, Mississippi LIST 5s, Morris
and Essex ID, l.. & W. LIST Is, Ohio
and Little Kanawha (B. & o. LIST IS
and Winona and St. Peter Chicago
Northwestern) LIST rs, have, as far as
practical purchasing purposes are
concerned, disappeared from circula-
ton.
Other issues which are sometimes
obtainable in the market but only at
infrequent intervals are the Chinese
Imperial Government 5s, New York
and Greenwood Lake (Erie) Prior
Lien SIS. Norfolk and Western 1st
consolidated As, Laclede Gaslight LIST
5s, and Central Leather 1st Lien SIS.
The investing public has bought
these securities out of the market be-
cause they are first class bonds in
800 form. There are a number of
other issues of good 500 bonds which
are still to be obtained by investors,
but the demand is constantly grow
ing
Unless the supply is increased, the
growing appetite of investors for this
form of securities is going to be
killed, for the simple reason that
financial houses are not going to con-
tinue to keep up business the de-
mands of which they can not supply,
That this nation, which has de-
veloped the card index, the type
writer, the adding machine and SIM
liar additions to business equipment
should lack a suitable supply of small
bonds is not only a reflection on the
business intelligence of the financial
community, but it is neglecting the
opportunity for adding to the num-
Der of people, who through having
funds tied up in corporation enter
prise, will act as a bulwark against
radical and half baked legislation.
In order to make the most friends
and benefit by the establishment OF
the highest credit, no new issue OF
an honestly progressive corporation
should be without 500 denomina-
TONS No new issue should be with
out the privilege of conversion-one
1000 bond in ten 500 bonds. Fur
thermore, no charge should be made
for the exercise of this conversion
privilege. Any farsighted corporation
executive could see the advantage OF
having the securities of his company
widely distributed.
Present issues which are convert
ible should as far as possible be
made convertible without charge in
stead of putting an obstacle in the
way of general public interest through
infiicting a penalty Of from So to Sic
for each conversion.
Baby bonds are the logical solution
for the present investment situation
and every facility should be provided
for distributing them among invest
ors who are anxious to secure them