New-York tribune., 1920-06-13


the equivalent of SO per cent in 1919
they rose to 2424 per cent on the com.
mon stock in 1918, and dividends have
oeen paid accordingly, the present rate
oeing per cent. Stocks which are so
sensitive to earning power should not
be considered for permanent invest
ment. The preferred stock is sea
Soned investment issue
F. w. Woolworth Common
Question-KindIy tell me what you
yestment? Why is it selling down to
par What is the present cape alization?
Answer-The F. W. Woolworth Com
pany has shown wonderful progress
since 1912. During that year net sales
we're $50 557 900; in 1919 they were
Sll9,5O0,000. In 1912 the equivalent of
S.73 per cent was earned on the com
mon stock; last year 1897 per cent
was earned. The present capital is
Sdl'od4 sd "a 4'oO0 of per cent preferred and
Soo,ooo,uO0 common stock outstanding.
me latter includes 80 per cent stock
dividend recently declared. The au-
'horlzed common is Sl00,OO0,OOO. 1t
pays per cent. 1t will require S.
Zoo,ooo to pay the annual dividend on
the amount now outstanding. At the
present rate of earnings there will be
good surplus over this amount We
regard the stock as a fair business
mans investment. 1t has declined in
price in sympathy with the general
depreciation IN securities of all kinds
as the result of nigh rates for money.
Many Others in Same Boat
6 Question lived in Chicago for twenty
nEe Years: ! bought a good many shares
Now the dividend is passed and the price
OF the stock Is way down a friend ad-
aIsSo VS. m me 60 nuy some more and even up
at "a and 30 share. now it is down
aEaln- aga. r. wrote several times to the Peo-
pie Gas Company. but they have my
money and don't care. I am seventy-six
yHsFs YEA 20, old Mni and poor woman kindly ad-
Answer--You have indeed been un-
fortunate in making your investments.
1t would have been we'll if YOU had
sought advice in the first place. Peo-
pies Gas Light and Coke stock is not
now nor never was a high grade IN
Vestment issue, though in years past it
has been so considered by many per-
sons residing in Chicago. Those who
are dependent upon the income from
their investments should not purchase
securities which are sensitive to earn
lngs for the reason that dividends or
sum StoChS are ny no means certain
to be paid regularly over a period of
years. Only those issues which are
not so sensitive to earnings are proper
for one in your position. Among these
are good bonds and high grade sea-
sored preferred stocks. The Peoples
Gas Light and Coke Company, like so
many other public utility companies,
found it impossible to overcome the in
creased operating costs. 1t seems to
us that this company has possibly dis
counted this unpleasant condition to
large extent. However, there is no
telling when it will be in a position to
resume dividends, and therefore you
win be speculating just as long as you
holo this stock. If you cannot afford
to do this we think you would do we'll
to change over to higher grade securi-
ties. There are to-day many bonds and
preferred stocks which may be pur-
chased to yield from per cent to over
7 per cent. Among them are Liberty
bonds, high grade railroad and indus
trial bonds such as Rock Island gen
era per cent, st. Paul general per
cent. Atchison adjustment per cent
Illinois Steel, Az per cent. and United
States Rubber per cent. and pre-
ferred stocks such as United States
Steel, United States Rubber. Central
Leather, Standard Oil of New Jersey
and American Tobacco