Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-05-12
RAILS PAY HIGH
RATE FOR MONEY
Serious Commentary on invest
ment Market When 7 Per
Cent Is Demanded


The much discussed financing Of the
Union Pacific Railroad Co. took tangi
Bile form Yesterday by the purchase by
Kuhn. Loeb & Co. New York. OF
$2h 900, 900 Union Pacific Railroad Co.
and the Southern Pacific Railroad Go.
jointly and sevcrally guaranteed 7 per
cent trust equipment certificates Of the
Pacific Fruit Express Co. These GER :
tifcates mature in approximately equal
annual installments from June I. 1925,
to June /. 1895. inclusive. They were
being offered at prices varying from 100
for the 1925 maturity to 101 for the
1885 maturity.
They are issued on the Philadelphia
plan. with the Commercial Trust Co. of
this city, as trustee. The offering was
made by Kuhn. Loeb Il Co. the
Guaranty Trust Co., the National City
Co.. Harris Forbes & Co. and others.
II was reported that the total issue had
been sold shortly after the subscription
books had been opened.
Speaking of this issue. n prominent
banker remarked that il was a serious
commentary on the investment market
that such companies as the Union Pa
cific and Southern Pacific are compelled
to pay 7 per cent for $25, 900 900 to
furnish cars for the Pacific Fruit Ex-
press. company which they control.
He said he was pleased to see that
the certificates were issued under the
Philadelphia plan. which provides such
ample protection for the investor. 1t
will also prevent any impairment Of
credit of the Union and Southern Pa
cifc Cos. through deterioration Of the
equipment in fact, the increase in bust.
ness through the use Of this additional
equipment will help the credit of both
roads, he said.
There was question raised concern
ing the legality Of the pooling of the
Union and Southern Pacific interests in
an equipment corporation, in view Of
enforcement of the two roads by the
decision of the Supreme Court several
years ago.
An investment banker said that he
was certain all such points had been
discussed by the officials of the COM
panies before they would decide to make
the offering. and they would certainly
have the best legal advice AS to whether
they were infringing any laws. espe-
cially the antitrus laws. before they
would take final action. He said il the
plan proves successful, it is likely to
be used in similar manner by some
other roads.
The senior member " a well. known
firm of bankers and brokers in the CEN
tral part of the city said yesterday that
there is more time being wasted today
by public men in talking and wrangling
over petty nonproductive topics than at
any time perhaps in this country's his
tory. The most trivial matters. he said,
are receiving lot of attention which
should be spent on the one thing which
is of most Importance, namely recon
struction. BY that he meant reconstruc-
tion of our habits of thought as well as
action
we are, handicapped in ways which
we have never known. are getting back
to business. while our public men and
our business men spend their time
arguing the difference between tweedle-
dee and tweedledum. and permitting
our business to slip away from us.
Each day they seem to think up some
new idea in taxation. he said. Now they
are concentrating on taxing sales of
stock. or some outlandish plan to raise
the bonus for soldiers. One would laugh
he said, at such performances and be
inclined to pass them over. knowing
they would never amount To anything.
were it not for the fact that they put
the prohibition law across while we
were saying at can't be done"
He said he saw a proposition some
where where it was proposed to 20
ahead and print bonds and hand them
to the soldiers. and those of them who
preferred cash could take theirs around
to the corner grocery and sell them for
what they would bring. Tie said he
did not know n whose credit the idea
should be placed. but in all probability
it was some congressman who had
been studying the financial methods of
the Bolshevists.
In the afternoon yesterday. it was
stated by a representative of the syn
dicate which floated the Union Southern
Pacific equipments that the banks in
New York were closed Mt 10 O'Clock
yesterday morning with large over
There was a discussion on. dealing
with some recent bond and note issues
and the security back of them, when a
banker asked what hetter collateral could
n bond or note have than Liberty
Bonds?
He said that he believed it had es-
capped the attention Of some shrewd in
vestOrs that the $2.50O, 600 four year
g per cent notes Of the Norfolk and
Western Railway Co, recently issued
by the Guaranty Trust Co., of New
York, were secured by deposit of
Liberty Bonds at ratio of 10 per
cent of the principal amount of the
notes with guarantee to maintain that
parity at all times. The notes were
quickly sold at 9G'a to yield over Z