New-York tribune., 1920-07-17
Large Yield of Short Term Notes

Question: note in the Tribune list of
slloTs l ,et m securities notes Of Public Serv
lSZ@, quoted at S2 bid. 50 asked Southern
hallway Gs 1922, 81 u bid, gl7s asked /;
Iiah SECURITIES Corporation 6s, 1922, S4ll
pld, 80 asked Philadelphia Company 6s
1922, 81 IL bid, "a asked. would like
to know what date in 1922 these notes re
spectIvely fall due and what you think of
the purchase of thom. Is there any rea-
sonabie doubt about payment of these
notes as they mature? 1 have noticed
Philadelphia Company preferred 6 per
cent quoted at 81 TO 80, and the common
stock of the same company apparently
quoted at IS. would like to know whether
the denomination of the Philadelphia
Company per cent preferred at $50 a
share, or if not, what are the denomiua-
lions? Aleo, what Go you think of it? /
wish to know whether foreign bonds pay
able in dollars in the United States are
subject to a coupon tax in the countries
where issued. Mexican gold bonds City
Of Toxic, Japan, and Belgian 1as of re-
cent issue particularly the bonds I had
in mind. If any of these bonds are bought
by American citizens Will the coupons
thereon be taxed III the country of their
issue u H. Z.
Answer-The Public Service T per
cent notes are due March l, 1922; the
Southern Railway per cent on March
/. 1922; the Utah Securities September
is, 1922, and the Philadelphia Company
per cent on February /, 1922. We do
not, OF course, pretend to know what
form the financing of these obligations
will take. If money and credit condi-
tons do not materially improve it may
be difficult affair for some corpora
tions to accomplish. The real investor
does not care, as rule, to purchase
securities about which there is any un-
certainty. If these notes were as sure
Of being paid off at maturity as are
Proctor Il Gamble per cent, 1922,
they would be selling on a Ii per cent
basis and not on q basis to yield from
l0la TO over Is Il per cent. But the
man who has faith in these companies
VIII take advantage of such low prices,
until after while it may be that the
notes will sell On a basis which dis
counts their payment at maturity. We
do not know OF any reason at present
why q holder OF these issues should not
receive his principal and interest when
due. Of course, much can transpire
within two years. If you believe the
be no commercial depression of conse-
quence, these notes should offer very
attractive speculative investment pos
sibilities. The par value of Philadel-
phia Company stocks is $50 each. The
quotations are dollars per share. The
preferred stock r5ys 6 per cent, or S3
per snare per annum. This company
earned the interest on its fund d debt
3a9 times in 1919. and there remained
after interest charges net income of
S3, 1876, ,065 Preferred dividend amount
ed to 81 0l5,0S4, or the equivalent of
more than three and onehalf times re-
quirements Common dividends of
per cent, or SO a share. were paid, leav-
ing surplus for the year OF S2o4 ,547
We regard the preferred stock. which
has paid 6 per cent regularly since
1918, as very fair investment. Both
Mexican issues are free of all present
and future Mexican taxes, as are the
Belgian TT per cent bonds. The Toxic
and Japanese boads are free of taxes
so far IS fore;gn holders are concerned.