New-York tribune., 1920-07-13
Investment
Information!
Four full columns o) IN
vestn,ent questions and an
s,oers are published in The
Tribune every Sunday.
c. p. X. r. Stock Puzzles Woman

ouest,on--why Is Canadian Pacinc Rail,
road stock selling so low now. and
what factors, II any. %in dr.naa innauence or or
present cost? What is your opinion OF
Canadian Pacific bonds. to be held prob
Chaser now buying? What do you think
Of Bell Telephone. Company OF Canada 6s'
1025?--Miss Il. X
Answer-There are several reasons
why Canadian Pacific Railway common
stock sells at figure to return about
1856 per cent on the investment. One
reason is that all railroad companies
in tho United States and in Canada
have been forced to face greatly in
creased operating costs without an ap
preciable raise in rates. This fact has
caused a considerable change in earn
ings, so that the continuation of divi-
dends has been by no means certain.
Tho money and credit situation has
been such that all forms of invest
mcnts have had to conform to cond-
about 20 per cent and paid 10 per cent
on the common. In those days, how
ever, conditions were such that high
grade railroad stocks sold on basis
to net 5 per cent and less. During that
period, too, there was talk of an in
crease in the Canadian Pacific dividend
1t may be noted that this company
which requires $26,O00,O0O to pay the
10 per cent dividend, earned it by
margin, of but $2,093, sol in 1919. Rate
increases will, of course, be of great
benefit to all carriers. When one con-
siders that United States government
bonds may be purchased to yield s per
cent there should be small wonder that
securities which are sensitive to earn
ings should sell to yield over per.
cent. We regard the Canadian. Pacific
Railway as sound corporation, and
it is our opinion that the bonds of the
road are good investments. The Bell
Telephone Company Of Canada bonds,
due April /, 1925, are a first charge
upon the whole lines, works and plants
of the company, which owns and opcr-
ates the principal telephone systems
of the provinces of Quebec and On
tario, exclusive Of real estate We re-
gard the bond as high grade.
Politics and German Marks
Question-As to-day. July s. in Spain
and also in Brussels July 23, there are.
conferences In reference to, the peace
treaty of Versailles, and as it seems Ger
not count on the stability of it's govern
ment. l would like to hear your personal
opinion and kindly ask you to answer me
the next two questions: Do you think
that after the Spa or Brussels conference
another reduction in the value of the Ger
man mark might occur? What do you
think, whether it is preferable for me to
buy now at present rates to wait how
the outcome of this conference will be?
A S.
Answer-The conferences you men
ton, 8 far as they affect Germany's
stains favorohlv Or ,pfovorohl,, ,ro
likely to have a bearing on the quota
tlons for German marks. So are many
other factors in the economic and dip
lomatic affairs of Germany and the
world at large, so much so that, as we
have said before, marks are gamble
Your letter indicates that you prob
ably have something more than a spec
rulative interest in the NATTER perhaps
you can apply to the problem your in
depreciation of the outcome of the con-
ferences. We cannot do it for you.