New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-07-22
ID Per Cent Yield in Prospect

Question value very highly indeed
yonr investors service. which, I think -
all the oiuesky laws that have ever been
"a ssed. / am thinking OF buying Philadsi-
phts Company deoenture -. due MAJ.
1922. at about 81. to yield about u pc
cent. X ndiy state whether you think tbs
a fairly safe purchase. IN the indenture.
which is dated May !. 1912. securing thcss
viii Lot make any new mortgage upon Or
pledge any Of its property or assets any
part thereof without also securing thereby
9ud theFeuHder every debenture issued u1s
der this indent1re equally and rstably With
every bond issued under and secured IN
der ana b. any such mortgage or pledge.
ard IN ere~T such rlortEa ge or pledge an
amount Of bonds shall be provided and re-
served sufficient 70 retire at par such OF
SAID debentu-es IS may then be outstapc
.ns and unpaid. and IL the circular dated
February !. 1919. covering the issue Of Tho
Philadelphia Company's 10000, 900 three
year per cent gold notes the issuing
bankers state that these notes and che
1874 00G debenture bonds (-atahy Sc
cured under the FIRST refunding and col
lateral trust mortgsge}, aggregat!ng SID
ts4, eJo, are thus secured through a nrst
lien on properties and securities valued a
more than so. 900 goo. or On twice The
amount OF this Indebtedness ! \ is ar
nual report for 1919 the Philadelphia Con-
pary reports gross income OF $s.65i.5<i
and net income. after providing Tor debt
discount ana expenses Of S324sss sinxsng
fund sSss.SsS and depreciation t52S.I+L %
$3.50 A. snd for he s, fye months ended
reports increase gross OF S2.152 00e and
in net of si.2o5. coo. thus showing ncs
earnings availa Bile for interest Of almost
four times the sum required 20 meet the
interest the funded debt. In View OF
the Philadelphia Cornpany's very valuable
Interest 70 the DuQuesne Light Com pauy
ard IN ~ other subsidiaries. I VIII thank
you to kindly state whether n vour cpin-
Ion. you consider these deheaturss having
twenty two months to run, a fairly safe
purchase around IS 10 net about il per
cent c. n.
Answer-The Philadelphia Company
has $40, 794 900 Of securities maturing
in 1922. $1O,0O0,0o0 of 6 per cent IN
February and s9,794,0o0 Of per cent
in May While much may happen in
the mean time. we know of no reason
at present TO believe that both these
issues will not be met at maturity. The
earnings Of the company are good and
appear to be improving. Very often a
security having considerable merit will
sell so low that the average investor is
suspicious Of it, because ne argues that
# it were high grade it would sell on a
basis to reflect its standing. These are
strange times. Money and credit con
citions are such that securities Of cor
porations. OF nations even, sell at
prices which show the uncertainty
created in the mind of the investor.
The Angio-French bonds until recently
sold on ridiculously high basis.
When practical assurance was given
that the bonds would be met at ma
turity they Immediately sold UP, SO
that now they yield but slightly more
than per cent per annum. We be
lieve there are many other securities in
the same position. As we already have
stated, we cannot attempt TO tell whar
VIII take place within the next year or
two. But judging from the earnings
and credit of the Philadelphia Com
parry, we regard the debenture per
cent bonds as Offering unusual specula-
tive investment opportunities.