The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1915-07-02
Business and Finance

$10O,OOO,OOO of short-term Gone, two
and three-year) securities made last
September.
AS New York City is by the largest
borrower in the municipal loan mar
ket, and as financial conditions are to
large extent gagged by the terms
which this city is able to command in
its important offerings, investors in
every part of the country will be par
ticularly interested in the forthcom-
ing sale. 1t might be pertinent to in
quire why, at this time of money re-
dundancy, at time when the banks
are crowded with unloaned funds, the
City of New York finds it necessary
to offer its bonds at AZ per cent in
stead OF or even 81, as it has so
often in the past. In the first place,
we must consider that the city is
seeking hfty-year credit and not tenn
porary accom- dation, and that while
the banks have an over-supply for
current necessities, that cannot so
easily discount the future. A study
of the mortgage market at this time
shows that considerably higher rates
are demanded for prime mortgages
than for commercial accommodation.
In the second place, New York will
undoubtedly secure a hattering pre-
MUM on her new issues, and this will
by so much decrease the net interest
to be paid on the loan. This new
issue of bonds comes at a most op-
perfume time, for it comes when in
vestors are showing an increased APP
petite for high-grade bonds, and on
the even of the July reinvestment per-
Iod, which this year may well yield
tor re1nvestment a somewhat larger
percentage than usual of the interest
and dividend disbursements. There
are two factors which may contribute
to this increase, one being a decrease
IN the disposition to save, and the
other being a decrease in the amount
OF July payments which will go
abroad, owing to our large repur-
chases of American securities during
the past year. 1t seems likely that
the successful fotation of this New
York City offering will be followed by
one or two important items of rail-
road financing, and present indica-
tons are that these offerings will en-
counter favorable investment condi-
tons.
Investment bankers are quoted as
saying that IN relation to money mar
ket conditions, good investment sec
urities may be regarded as unpreced-
emily cheap, and that present oppor-
tunities for investment will not be
duplicated IN the very near future. To
prove this point one banker exhibits
table covering forty-seven represen-
tative bonds selected at random, with
their highest and lowest prices for the
period 1905 to 1915 together with the
average prices for that period. Of
the forty-seven issues only one is now
selling higher than the average price
of 1917 years. The other forty-six
show declines from their averages
ranging from lB to 1895 per cent.
And the single exception although
selling ~ per cent above its average
price now yields SIS per cent against
an average yield of SOS per cent. The
average yield of these bonds in the
spring of 1905, when they were selling
at their highest prices for the 1917
year period, was 1924 per cent. Time
money rates for this period were 81
per cent. The average yield at the
present time for these same bonds is
4.8l7 per cent, with time money rates
again at 3H per cent.
July Dividends.
July is one of the most important
dividend months, and this years dis