New-York tribune., 1921-06-10
Future of Westchester Bonds

QueStion'~-For the laat twO Neara nave
been a reader OF The Sunday Tribune,
changing from The Sunday Herald simply
10 read the questions and answers on your
| financial page. During that period 1 have
noticed several reference TO the first mort
gage ~ per cent bonds OF the New York.
| Westchester & Boston Railroad. The an
swers YOU have given however, have not
covered the questions which have in
mind. and they follows; In case
the New. Haven Railroad goes into re-
ceiver's hands. what effect will this action
have on the New York Westchester ~
Boston Railroad? WIN the New Haven
Railroad cease to pay the guaranteed in
Westchester & Boston Railroad was reor-
ganfzed, where would these bonds come
Witch is asIss BY 9h the Mew aaven
Railroad, come ahead of the interest on
New Haven bonds? In your opinion, Is
Grad WORTH tho present price of the II
per cent bonds ?-F. A. M.
Answer-Presumably the New York,
New Haven g. Hartford, if it went in
receivership, would discontinue the
payment of the guaranteed interest
from the New York, Westchester &
Boston bonds. This, however, would
be matter which the receiver would
decide. The interest on the New York,
Westchester & Boston bonds presuma-
bly, does not come ahead of the interest
on mortgage bonds of the New Haven,
but here, again, there is a legal ques-
tion involved which the receiver and
the new organization committee would
presumably take legal advice on. There
are $21 100000 face value of these
bonds outstanding, and the present
market price is around 81. This would
make the market value OF the property
about $7,400,0O0. There is little doubt
that the road cost more than that to
build, but we are not sure that the
property If operated Independently
could earn in the near future at least
interest charges on S7000,000.
Likes Louisville Gas and EIectrics
Question: want to invest $4,000 in
The company which sells these bonds is
n. M. Byllesby e. Co, Inc, Trinity Build
ing. III Broadway New York. What do
you think of the investment?-T. A. S.
Answer-We consider the Louisville
Gas and Electric 8s, due 1928, as a
good short-term investment. If there
is some reason why you want your
do we'll to buy these bonds. If, how
ever, this is the starting of an invest
ment fund, we would recommend long
term bonds, such as, for instance,
Northern States Power first and re-
funding 5s, due 1941. While the yield
at present prices is slightly less than
z per cent if held till maturity, it is
we'll secured high grade bond in our
opinion, and is sold by the same com
pany that is selling the Louisville Gas
and Electric.
Why Prices of Phone Bonds Vary
Question--l shall have about $1,000 to
invest within the next few weeks and have
thought of buying Bell Telephone Com
pany bonds. viii you kindly let mo have
your opinion as to the advisabilty of doing
So, considering safety paramount to yield
although of course. one naturally desires
the greatest income consistent with per
SSouthwestern Bell sell for about a6, while
Bell Telephone of Pennsylvania are
quoted at about 1o5. Why the difference? :?
Do you consider the latter a safer invest
ment than the Southwestern Bell? have
some money invested in railroad shares
present market value, and am a little
/ dubious about making any further invest
ments @ in railroad securities. However,
would you recommend the purchase Of
railroad other bonds in preference TO
Bell Telephone bonds? Kindly also let
graph stock, C. w. T.
Answer-The Southwestern Bell Tele-
phone Is are direct obligation of the
company, but are not secured by a
mortgage, while the Bell Telephone Of
Pennsylvania are secured by a first
lien on the entire physical property
of the company in Pennsylvania, ex-
cept for plant in the territory serv-
ing Pittsburgh and certain counties
west of the Alleghanies. We consider
the Southwestern Bell good invest
ment, but the Bell of Pennsylvania has
greater security. We think that Bell
Telephone of Pennsylvania or North
western Bell Telephone, which are like
wise secured by first mortgage, are
better investments under present con-
ditions than most steam railroad Sc
curities, except the highest grade ones.
We consider American Telephone and
Telegraph stock good business mans
investment.
IL. II II