The sun., 1919-01-30
SOUTHERN NOTES GO
TO CHICAGO BANKS
Syndicate Will Purchase Pub
lie Utilities Issues Amount
ing to 100000.
BANKERS HERE SURPRISED
Securities Are S25..OOO,OOO of
Railway and S16,000,0OO
of Electric Company.
BANKERS HERE SURPRISED

Negotiations for new railroad and
public utility financing which will ag-
gregate 100000 have been practi-
cally completed. It was learned yester-
day. This will include the sale of $685.
100000 Southern Railway per cent.
notes Of three years maturity to n Chi
cago banking syndicate headed by Hal
sey. Stuart & Co. and the Continental
and Commercial Trust and Savings
Bank, and also the sale OF $4,000, 900
bonds and $4,000. 900 notes OF the South
ern California Edison Company to a
group OF local bankers. headed by Har-
ris, Forbes & Co, the National City
Company and IIalsey, Stuart & Co.
That the Chicago bankers were ang-
ling for the Southern Railway note Is
sue came as a surprise TO local bankers
because the financing OF the company
heretofore has been done by J. Y. Nor
gan & Co, and its board of directors and
executive committee includes Charles
Steele Of the Morgan Arm. and Jackson
f. Reynolds. vice-president Of the First
National Bank. which Is closely affili-
ated with J. T. Morgan & Co. The ulti-
mate decision on financing however. has
passed from the railway directorates TO
the Federal Railroad Administration.
In some quarters yesterday II was
thought that the new railroad financing
alignment was an echo Of the Chicago
and Western Indiana controversy OF
last September. when the SIS, 900. 900
notes OF that company which fell due
september went unpaid until Septem-
Der 81 and the owners were offered an
opportunity to extend the securities for
= year on the basis of ~ per cent. Be
tween the last week In August and the
date OF extension the notes were sub
ject OF much correspondence between J.
=. Morgan & Co. and John Shelton Will
Jams. director OF finance for tho Federal
Ra'lroad Administration
Representatives of the Chicago bank
ers were in Washington yesterday con-
GLIDING the purchase ot the Southern
Railway notes and while definite infor-
nation was withheld Il is believed that
their syndicate will be In a position to
offer the notes publicly soon, possibly be-
fore the close Of this week Their proft
IN the transaction will be relatively
small one and the reason the Chicago
bankers got the business is believed to
be their high bid for the notes.
Local bankers said yesterday that the
policy OF the Federal Railroad Admins
ration Is 10 grant to underwriting syn
d!cates n gross profit OF only q OF l per
cent. out OF which !. OF per cent goes
to the selling syndicate. leaving only l.,
OF / per cent. 10 compensate for the
financial risk involved In some cases
OF small Issues that amount may suffice
hut bankers say that IN the present con-
dition OF the bond market So small a per-
centaee OF proft Is unattractive and in
commensurate with the risks.
In connection with the sls 5000. 00r
public utility financing II was learned IN
despatch from San Francisco that the
California Railroad Commission had
granted the application Of the Southern
California Edison Company for authority
to issue ss.o00.000 25 year s per cent
general and refunding mortgage bonds &c
take up a like amount OF short term
bonds maturing on July l and to issue
$4,000 600 serial per cent. debentures
maturing in one to ten years. to meet
bills payable amounting to Sc 07S 59c
and representing reconstruction work
The bonds are 70 he sold at not less thar
93Ts and accrued interest A public
offering OF this issue Is expected in the
near future.