davidaulloa/AmericanStories huggingface dataset:
New-York tribune., 1920-09-26
The Peculiarity of Income Bonds

Question-In The Tribune recently you
anawered f. ", who inquired about bonds
and you state that no bonds are sold on the
New York Stock Exchange without tho ac-
crued interest being added to the purchase
price. excepting income bonds. VIII you
kindly describe income bonds as II Is gen
orally understood that there are no bonds
sold on the exchange without the interest
being added ?-J. T. NJ.
Answer-The popularity Of income
bonds is that the interest is dependent
on the revenue of the obligor. Cen
orally the trust deed specifies that if
the entire interest charge on the issue
is not earned such portion as is earned
shall be paid. Cases have been known
where interest was withheld for techni-
cal or malicious reasons, and suit has
had to be brought to recover interest.
In view of these uncertainties no one
would be willing to pay accrued inter-
est on one of these bonds when buying
it, for when the interest date came
around he might not collect. In the
case Of other kinds Of bonds fore
closure would be the remedy. Income
bonds are more like a preferred stock
than mortgage bonds. Securities that
go by the name Of bonds are not all
what they seem to be to the casual OBJ
server.
New-York tribune., 1920-09-26
Thinks Bonds Jnderpriced

Curstion-llrase give me your opinion
OF tn" Investment position Of the following
bonds: Iowa Central ilrat 81. 1895: Mime,
apolis st. Louis first convertible 5s land
how these two compare). Wheeling & Lake
Erie consolidated 4s 1888, Lake Eric a
Western nrst SIS. 1885, Wabash Is Ia
no; I'll" safety OF these bonds greater tina n
III" prices indicate. caused by their lin
tied market? What Is the cause % the
r''ert decline in Shelters 5s:--A. f. J.
Answer-Iowa Central first s Der
cents, 1888, are a first lien on 5O2
miles The Minneapolis e. St. Louis
first consolidated 8 per cents, 1874. are
first lien on 152 miles, a second lien
on 1914 miles and q third on & MILES.
We believe tho former entitled to the
better rating. The Minneapolis & St.
Louis. of which the Iowa Central is a.
tart. is not road Of good credit. The
bonds mentioned are fairly we'll se-
cured, and the present prices appear to
be lower than the value Of the mort
gage. Wheeling & Lake Erie consoli-
dated per cents are fairly we'll se.
cured n first lien on 212 miles. sec
ond on ID, third on so and Il fourth
on 1877 miles. They are exchanr.able
for a like amount Of Wheeling & Lnse
Erie Railway refunding an per cents,
1856. Both Lake Erie & Western first
5 per cents and Wabash first 6 per
cents are very fair issues, In our opin-
ion. the latter being entitled to the
better rating: Smelling per cent
bonds probabl ly sold off on account Of
the poor earnings Of the company. The
bonds are we'll secured. In our opinion,
and Offer coed investment eppostuni-
New-York tribune., 1920-09-26
How Rail Accounts Are Kept

sr5cs YOU may concerning the general
tne railroads and the government For
instance how and whore do you procure
IN" IN" item Other income" that accrues TO
she company How are Joint faculty
rents treated and the other rents? Tho
meaning or the statement Federal and
corporate account, combined"? The mean
ing or Taxes less war taxes"? These are
OF course procurable from the annual re l..
p% ports ana article on the subject as to how
tle various Items or. rather headings
should be classified In order to make twn
the stands ups; % one showing the results with
standard return, quitting the headinns
| other income" etc, in their nrnnsr
| places.-A. b &. Spe'
Answer--When the railroads were
taken over by the government the
roads were awarded a yearly com
pensation based upon three-year
average. In most instances the roads
were operated at a loss by the govern
men1' winch loss must, of course, be
paid TOR by the taxpayers. This com
pensation ceased on March l, 1890.
~hen the roads were handed back to
the owners. However, on account Of
the unsettled times and the fear that
CONFUSION might result, the roads were
given the opportunity of signing mn
win the government for a further
period OF six months, based on tho
same compensation. This ceased on
September l. 1920. At present. there.
1orc, the roads are being operated bv
the owners. When the roads were
taken over the compensation renre.
sented only the amounts based nnon
transportation income. 1t did not in
any way affect the income which the
roads derived from other sources
Thus, in the Atchison, Topeka g. santa
re report for 1919 is the item Com
pensatlon under Federal control CON.
tract, $&4,615,0s7," Then the Item
other income" which means income
derived from securities, income from
leases, miscellaneous rent, etc. joint
FACILITY rents consist Of rentals Maid
oy road for the joint use of other
trackage, terminal property, etc. Other
rents are those which consist of rents
paid IN the regular way. The roads
were forced to keep two separate &C.
counts during government operation
one the actual operations and the
other the account with the government
In this case there were several items
which lapsed and these were includad
IN the item Federal and Corporate ar
count combined" Taxes, less war
taxes, consist of state taxes. nronert,,
taxes, etc. War taxes are those whicS
include income taxes and excess nrof,+s
taxes. PAo'''S
New-York tribune., 1920-09-26
Railroads Should Do Better

Question-Kindly tell mo what you
think Of the following as investment
stocks: Northern Pacific, Great Northern
preferred. American Chicle Company pre-
ferred. Allis-Chalmers Company preferred
II. L. r.
Answer-Northern Pacific and Great
Northern preferred must be put in the
speculative class. The railroads are
still in an uncertain position, since
it remains to be seen how they will
do under the new legislation. 1t may
be said, however, that the outlook for
the rails is much more promising now
than it has been in long while. Amer
lean Chicle preferred may be classed
as a good preferred stock investment
having an excellent dividend record
Allis- Chalmers preferred paid its ini-
tial dividend in January, 1916. At that
time there was large accumulation
of unpaid preferred dividends. Since
then all the back dividends have been
paid, and in Aurust the company an
nounced an initial disbursement on the
common Of l per cent. In considering
Allis- Chalmers preferred one must not
lose sight Of the fact that it was not
until the big war boom in industrial
activities that the company was able
to pay dividends on its preferred. It
remains to be seen now what it will do
under q return to more normal con-
ditions. This puts the stock in spec
ulative light
New-York tribune., 1920-09-26
Nervous About Republic Motor Truck

Question-Can you let me know through
your columns the latest available informa ,
tion with resp"ct to the general financial
condition Of the Republic Motor Truck
Company The last available earnings
statement seems to have been issued for
the period ended December 81, 1919, at
which time the company was apparently
doing good business. with net earnings Of
$l.3l2.250 before Federal taxes. Weakness
Of late Of the stock OF the Bethlehem
Motor Truck Company has caused me to
period of inactivity. sold off sharply Fri
day afternoon and again on Saturday sold
down on a turnover Of some 1000 shares.
Has Republic Motors a large inventory.
motors Industry likely to affect the COM
pany's earnings to any extent which would
make make the present selling price Of sac per
bureau item some time ago that the
president Of the company stated the com
pany's returns depended on a largo turn
over with small profits, and wondered
means any considerable decrease of PROFITS
In q time like this. Would you advise
holding stock purchased Just under $50 q
share ?-J. A.
Answer-The market position of Re-
public Motor Truck has undoubtedly
been adversely affected by the finan-
cial difficulties Of the Bethlehem
Motors Corporation. No doubt the
companys earnings have shown a
drop, since the truck industry
has been suffering from q lack of buy
ing orders. There is no question but
that you paid high price for your
stock and, in our opinion, it is likely
to be some time before you would be
able to get out even. We hesitate to
advise any one, however, about taking
q loss.
New-York tribune., 1920-09-26
His Holdings Are SpecuIatiye

Question: own the following shares
30 Island Oil and Transport. 20 Maria nd
refining Company. 20 Mexican Eagle, 200
Anglo American. IS Shell Transport and
Trading. 80 Standard Oil Of New York. so
Westinghous" Air Itrak". Ford Motor OF
Canada. Would YOU advis- ceiling any or
all the above? DO you consider them a
fair business mans invtstTnent?-M Is. Jr
Answer-We do not consider any of
the stocks you have mentioned, with
the possible exception of Westing-
house, an investment issue. Stocks Of
this character are particularly sensi-
tive to earnings and other develop
mcnts. When business is good divi-
dcnds are good, as rule, and when
business becomes slack change takes
place. During the war period these
stocks attained high levels. Is there
good reason to believe that such earn
ngs as were reported then will be
maintained? We think not, though we
do not pretend TO know what the future
will bring forth. If you can afford to
hold such issues you may be rewarded.
In our opinion, they are not suitable
for investment purposes.
New-York tribune., 1920-09-26
Continental Guaranty's Notes

Qu-sti"n- 10 you consider the one and
two year self iinuida,ing collateral trust
anty Corporation. to Yield per cent and
S'a per cent. good. cafe investment or
are they speculative? The Financial
World. in its Issue OF September 6. says:
corporation has been bought by banks
only" II banks buy the paper It should
be good. but snd sts per cent looks too
high to me TO b" conservative invest
advise n.e II Poor's Invest1nent Service 10
considered hs good RS the service isaurd by
John Moody Also tho standing OF Thomas
Gibnons market letters--G. B. Is.
Answer - The Continental Guaranty
Corporation finances the purchase of
automobiles for individuals and agents.
Profits on account Of the placing Of in
surance on the cars purchased, together r
with the fact that interest on the loan
by the company 10 payable for the full
period Of the loan in advance, gives the
company the opportunity to offer it's
notes at high yield. The collateral is
Of ample margin and in in the hands Of
trustee, who receives the instalments.
Thousands Of automobiles are pur-
chased in this way. The experience Of
the company has been good in regard
TO the failure of the purchaser to make
good his payments. We understand the
first payment 10 sufficient TO protect the
company in such a case. SO long as this
feature is maintained and there are not
too many cars on the market, the notes
should be safe. Poor's Service mas been
combined with Moody's Manual. John
Moody publishes the Analyses Of In
vsgtmen&s. Both are good. we make
ma pM ma sse A stt a vi ~ s,Sr n< faesnrp
New-York tribune., 1920-09-26
Offering Is Priced Too High

Ques,ion--Pisase advise me to the
nnan ancial Standing Of the Kentucky and
sSsn broer has ser sen, 0mp"G mD ,he ncloscI
sheet ard would like 70 learn norr
about tn" company.-E. j W.
Answer-The Kentucky and West
Virginia Power Company was incorpo-
rated in July. 1919, by consolidation
and merger of all the properties and
franchises of the Kentucky River
Power Company and the Tug River
Electric Company, and further con-
trolls. through ownership of 99-a per
cent Of the common stock, the Logan
addition, it leases the Logan County
Light and Power Company for forty
years. The company furnishes light and
power to towns and mines in the btu
minous coal fields Of western West Nir-
ginia and southeastern Kentucky. The
capitalization outstanding is S2,l00 900
common tpar es25) and s2.0Oo.000 pre-
ferred (par $1,000 and sl,9o4.000 first 6
per cent bonds, due 1949. The latest
earnings published are for the year
ended October 81. 1919. They showed a
net of $379,694, against S27O,8l7 for
the preceding year. Interest charges
were s115,44O. leaving a balance Of
s2s4,254 for the preferred stock, not
quite equal to twice dividend require
,l.nts. We do not regard the pre-
cerred stock as high grade, and in our
opinion the price. yielding ~ per
cent, is too high. The common &tock s
speculation, and while the company
nay show considerable progress, we
believe the combined investment as
offered is too high, considering the
number of seasoned issues now avail
able to yield this return.
New-York tribune., 1920-09-26
Union Carbide and Carbon sfoclu

Cuestion-1 wish to know your onin,o,
~, I the Following securities and stocksi CnI
,utnola , Gas and Electric Company Nrot
mortgage 3 per cent gold bonds At sronnd
ner AZ oart massa achusetts Oil Refining Company 7
81 eoi, I'M participating convertible ten-yea
soit st oohds at es This is a new c0ncern T
oI'fEH: winch has built a refinery in Dns
ep. eut W nal are us possibilities at the pres
~ 'I''i| ana under present conditionso IL
t;I ! mon Carbide and Carbon Corporation'
.!sted on the Chicago Exchange at around
o. o., good investment as stock Investments
g" II has paid a per cent dividend
regularly. | understand since its tncnr-
poelo in I9l7.-W. G. c.
Answer-Columbia Gas and Electric
hrst, per cent bonds are entitled to a
good investment rating, in our opinion,
The Massachusetts, Oil Refining ner
cent bonds, which participate in The
profits of the company, were issued
only few months ago. The COMPANY
which is controlled by the Island oil
and Transport Company, has issued no
statement of earnings, so it is not
possible to give an opinion on the
bond, except to say that it is more or
less speculative. Union Carbide and
Carbon is speculative. While the com
pany Is doing we'll, the stock is sensi-
tive to earnings. We regard it as q
very good speculative investment
New-York tribune., 1920-09-26
Inquiries About Financial Terma

Suestion-May y. ask for my benefit as
"n as other laymen that you will briefly
"a raps@'n the following: trust. redscounr
the onrsanization duties and powers OF
cmr emr aeae5ai Reserve Board and imitation OF
currency! cur l have discussed this last point
@@'h @ quite few people and have yet to
t'i'o Two explanations that agree-F. J. S.
=, Answer-A trust is combination for
tne purpose of controlling the produc-
tion, price, etc, of commodity. This
means that any corporation which con-
trols and dominates an industry is a
trust. The rediscount rate is that inter
est rate established by the various Fed
crai Reserve banks for the rediscount
Of loans made by member banks at the
Federal Reserve Bank. Commercial
paper, loans on Liberty bonds, etc
come under this heading Loans Sc
cUred by Stock Exchange collateral may
not be rediscounted in such way The
organization duties and powers of the
Federal Reserve Board are so many
that we have not the space to go into
the matter. We suggest that you OBJ
tain copy of the Federal Reserve act
Imitation of currency consists in issu-
Ing currency which is not secured by
either gold or silver metal.
New-York tribune., 1920-09-26
Stock Sure to Go Up, 'Tis Said

=. ouestion-kindly give me some informa
tlon relative to the standing OF the Cleve-
land Discount Company and advise whether
you think the stock OF this company Is a
sood investment. The stock is offered In
a combination OF two shares Of per cent
preferred stock Of par value Of 500 and
one share OF common stock at s1O making
the cost s21o for the three shares have
been given to understand that there is a
ready market for the common stock at s45
per share. with reasonable assurance that
the common stock will sell for $500 per
share by January l. 1915. W. n
AnswerIn our opinion, stocks like
that Of the Cleveland Discount Com
lany are too speculative to be consid-
cred for investment In the first place,
they have not proved their earning
power. If you buy block of the stock
in the expectation that the common
will go to 800 by New Years you will
not be investing, but speculating.
Stocks are such contrary things that
sometimes those that are scheduled to
60 up certain distance by a certain
time sometimes 60 down further in a
legs time.
New-York tribune., 1920-09-26
Copper Company Ia Morihund

Quest!on-some months ago I and sew.
eral or my associaties purchased quite
a number OF shares OF the Ohio Copper
stock. which then waa listed on the Curb
market; For while we got report
from the company. but it now has been
some time since we heard from them.
hlndly let me know the address OF their
h<adquarters. as l wish to write to them
and ask them II It is not bout time they
mace some kind OF a showing and we
got run for our Inoney.--G. B. A.
Answer-The Ohio Copper Company
of Utah has a general Office at "A Ex.
change Place, New York, and an op-
Grating place at Lark, Utah. The lat
est industrial manual shows the COM
pany discontinued operations at its
mines on March 10, 1919, owing to the
drop in copper prices. At the time it
was said that operations would be re-
sumed when the copper market i'm
proves. In December, 1919, l,400
shares Of the stock brought at auction
$50 for the lot.
New-York tribune., 1920-09-26
Curb Trading Dull
And Changes Small
In Short Session
Only Cheaper Stocks Attract
Attention i'm Evening of
Accounts for Week End;
Industrials Are Steady

Little interest was attached to trad
ing on the curb market yesterday as
most of the business was confined to
evening of accounts for over the week
end and traders operated on both sides
Of the market. The result was narrow
fluctuations and fairly steady under
tona.
Only the cheaper stocks attracted at
tention. Sweets ard United States
Steamship displaying stronger tone
and moving up fractiopally. General
Asphalt was trife higher in light
trading. Changes in others of the in
dustrial group were small and unimpor-
tent
Producers and Refners was in COM
parativeiy fair demand and advanced
a fraction. Skelly, International Petro-
leum, Merritt and others were about
steady. Announcement was made that
President Hotfcr. OF the Fensland Oil
Company, had telegraphed from Fort
Worth that the company had brought
in 1900 barrel we'll on its Walker
Caldwell fifty-acre lease near Brecken-
ridge. Tex.
There were few changes in prices for
mining shares, business being compar-
atvely light.
New-York tribune., 1920-09-26
Not Much Intellect Needed

Question--Would be pleased to learn
younool,,n your opinion as 70 the Ksyss9ne Finance
35S Fifth Avenue. I am holding preferred
stock OF this concern.
Answer-We have said many times
that we do not recommend for invest
ment the stock Of finance company
which ties it's assets up in secondhand
automobiles. The Keystone prospectus
says "that it is difficult to conceive
safer loans than those of the Keystone.
The best business intellect can find no
holes in this security" It's schedule
shows that it will lend S1,457.39 on a
car whose list price is $l,700-about IS
per cent-for seven months. The loan
is reduced by monthly installmcnts and
the average outstanding amount is
$8327s. Ford recently cut the list
price of his cars as much as 81 per
cent. Suppose the $1,7OO car manufac-
turer should cut his price only 15 per
cent. The Keystone then would find it
self lending 100 per cent of the list
price of car that was now in use. A
motor can easily depreciate 80 per cent
in a month, depending son how care.
fully it is used and the demand for
! secondhand. car when sale is at
tempted. 1t is not unfair to suppose
the car we have taken for example
would depreciate that much or might;
if it did, the Keystone at the end OF
the first month would be in the posi-
tion Of having lent twice as much az
the collateral would bring. 1t does not
take business intellect to find hole
in security like this--only a little
arithmetic. So far the automobile
finance corporations have got away
with it and made money: but they have
been doing a fair weather business, and
no one can predict what will happen if
conditions in the automobile trade re-
turn to point where secondhand cars
are q drug on the market. The banks
are throwing this kind of paper out
Many of the loans are made to people
who ought not to buy cars until they
can pay for them, ANYHOW.
New-York tribune., 1920-09-26
Brooklyn Edison Is Good

Cu"s,!on--plrase give ne your opinion
regarding the s2ooo.ooo issue Of Brooklyn
1880. Just announced in to-day's Tribune.
DO you consider It an nvesttnent SAT" AN
Wha; security is behind this Issue. or what
~ IL mortgage upon? Arn right IN
Interpreting tn" statement OF "pric" 35 and
nine months after the supposed date of
Issue. January !. 1920 the cost will be
35 per cent plus the proportional interest
at per cent per annunl. and that the
bonds when received WIFI bear interest
coupons though the bond had been
you consider thesc bonds better than or
equal to the new French per cent OF
ie43. and why should not be wrong.
should /. In borro wing an additional $500
for this Investment. At per cent I
per cent. using Liberty Loans coilat"raL
nGt Of fu,"r saringn Of ,i ncsi % ,hr"e
or four months, In OF purchasc or
sal" OF security what brokerage com
mission rlight b" expected 10 pay? What
hooks ran you recommend 30 acquaint one
with m" general facts abou, securtien"
1t j. McA.
Answer The Brooklyn Edison Com
pany per cent bonds, 1880. are a gem
eral mortgage on the company's prop
liens. They underly the Kings County
Electric Light and Power Company
dsbenture, some 81 100000. We regard
the bond as a very fair one. The price
Of 95 and interest means that the pur-
chaser pays interest from the last in
terest date, in this case July ], 1920.
The next coupon will fall due January
/, 1924. We regard the bond as quite
equal TO the French s per cent. In the
purchase Of foreign bonds the chances
of political complications should be
considered. II you intend TO purchase
this bond for investment we see no
reason why you should not borrow
money TO do 80. provided you pay OF
your loan in regular instaliments. The
com ission on bonds in 81 30 per 81 900
par value. Money and Investments, by
Montgomery Rollins In d good book {:
50 ARE Pntnans's Investment Handbook
sud Ghaushsxiain's Prinelpies Of Bond
New-York tribune., 1920-09-26
Middle States Oil Earnings

Question-Can you give me informatio
on Middle States Oil nast report etc. j ,
also who Is backing 1t, or who are the rea
Operators:--M W. q.
Answer-From q stock market stand :
point, at least. it would appear that
Middle States Oil is in better hands
than it has been for long time. These
interests believe that the current earn
lngs of the company warrant a higher
price for the shares than the present
quotation, but there is no question
that the stock has lost many friends
by its past market experiences, and it
may take long time before public con-
fidence is restored. The report recently
submitted to the Stock Exchange
showed that earnings are running at a
rate Of approximately SO share again.
The company's policy of declaring
stock dividends has been temporarily
discontinued, it is learned.
New-York tribune., 1920-09-26
Woman Can't Afford to Lose Nore

enestion--1 bought International Mer-
Company | would like 10 buv more of
Ih"se stocks or American Telephone and
le!+graph Company stock. Have lost out
considerable on General Asphalt Can't
AFFORD 10 lose any more money.-Mrs. H. *
Answer-If you cannot afford to lose
money you should adhere to. the sea-
soned investment securities. those which
are we'll secured and are not so sensi-
tive to earnings. Marine preferred is
not high grade although the company
is doing we'll enough at present. Phila-
delphia Company stock is speculative
and should not be considered for in
vestment. American Telephone stock
IS fair investment and improving.
Earnings are better than when the gov
eminent operated the company's lines.
General Asphalt is about as specula-
tive security as one can find. 1t pays
no dividends, as you must know.