The Birmingham age-herald., 1919-09-14
NO PAR VALUE IS
 CONFUSING ID MANY TRADERS IN STOCKS
Recent Issue of Coca-Cola Common Stock Brought Above Expression to
 Attention of Buyers

'Tr connection with the recent ot' fering of common stock of Coca-Cols con,pany. which proved extremely pop ular in Birmingham and throughout the entire south, as well as in the east, a question most frequently asked was What is meant by No Par Value, and why Is stock issued without par value?" said W. H. Sterne of Ward, Sterne & Co.
 The terms par value and 'capita'- ization have in the past been very much abused and the practice of issu- ing stock with no par value is pro5- ably due in a large measure to that fact also for the purpose Of aVold- ing difficulties with regard to taxa tion in many states where officials are inclined to consider the par value rather than the intrinsic value as Sbasis for taxation. .< 2 "All investors are familiar with the fact that many corporations have placed their capitalization at figures materially variant from the amaunt of capital actually invested, and have sold stock at figures far wide of the re- cited par value. Nevertheless. there is 9 tendency to assume that certifi- cate for 10 shares of stock of s100 par value represents a 5000 investmen
 "Wben a purchase of stock is consid- cred the investor should ascertain tnt total net assets of the issuing cor poration and the amount of earnings available for the payment of dividends Then, by dividing by the number of snsles of stock issued. he can ascer- tain its true position. This step should be taken whether the capitalization is expressed in dollars or not, but 1t $ very generally neglected. Conserva- tive investors, however. will always ignore the stated par value and the stated capitalization Tn arriving at toeir decisions By putting no par , minded of the cardinal principle that Ithe actual value of security is in mo wise affected by it's stated value.
 '1n speaking of net assets with ref ereuee to the value of stock, it must he remembered that good will. trade marks. earning power, etc., while ia- tangible are frequently of more value tlan actual physical assets. To revert back to Coca-Cola stock as an ex- ample: The physical assets of the company were hardly sufficient to cover the preferred stock issue of $io.- 1000, yet the trade mark, formula, good will and past earnings of the company were such that an issue of 5o0,oo0 shares of common stock. of no par value. brought out at $40 per share, was oversubscribed in less than seven hours after the subscription books were opened. This. of course, is a most unusual case and investors should always be wary of intangible assets unless they have positive evil dence of their value.
 'Thc extent to which 1t has become customary to issue stock with no par value is shown by an examination of the New York stock exchange and New York curb records. There are 30 odd stocks listed on the New York stock exchange which have no par value while about 40 per cent of the indus trial and miscellaneous stocks listed C on the curb are without par value.
 'ln this connection, it might be stated that investors should never hesitate to go to investment houses with questions that they think might make them appear uninformed. Toe frequently the advertisements of se- curities appear in language perfectly familiar to those who deal in them daily but unknown to the general pub lie. The investment house will al ways consider it favor to have its oversight in this respect brought tc it's attention by an inquiry.
 Investors should never hesitate tc approach securities dealers for infer mation. The house will always fee, itself well repaid by getting into com munication with an investor for such service a s he may call upon them tc render"