The Cordova daily times., 1921-07-30
Finance for Women
CRy International News scrvlccJ

or Equipment Bonds" These bonds carry excellent security and usually mature serially. They are generally issued for about S5 per cent of the rolling stock for which they are to 1 pay, and a very important point to consider in the case of this charac- tre of bond is the sinking fund pro- vided for the serial retirement.
 Bonds of this character virtually come ahead of the bonds of the rail road itself as they are a direct lien on the equipment and property vital to the operation of the road. They are a strong security, and it is a , known fact that when railroads were in default upon their first mortgage bonds the holders of car trust bonds were paid in full
 Terminal Bonds" are issued by a railroad against it's terminal proper ties, secured by the real estate hold ings. Terminal properties are usual ly located in the heart of important cities and they increase in value as a real estate investment, irrespec- tive of the earning power of the road itself.
 The history of terminal bonds is parallel to that of equipment trust certificates. The terminal is as es- sential to the operation of a rail. road as it's equipment, and therefore the record of terminal bonds is of the best. Interest on such bonds is known to have been paid when the | interest on other railroad bonds has defaulted They are generally con. sidered a very high-grade security
 "Collateral Trust Bonds" should be considered with reference to the se- curitics against which the bonds are lIssucd There is a chance, of course, that these might suffer deterioration in market value.
 We recall that in the early days of the war our railroads were going l through very serious difficulties. cs- Ipocially with labor. A labor confer ence called by Mir Wilson in 1917 re ! suited in a large increase in wages given the men. and that together with the congestcd character or the traffic, due to the war, made it all most impossible for the roads to make any sort of a showing. These were extenuating circumstances to be sure.
 The government needed the roads to help win the war. which then was the paramount issue. The interstate commerce commission has permitted an increase in passenger as well as freight rates. and under the Esch, 1 Cummins bill the railroads must be allowed more than 515 per cent of their total funded debt and total capi' 'al stock. Conditions today are quickly adjusting themselves. and the
 future of most of the roads looks en' couraging and bright.
 We might add a word regarding
 public utility bonds. Investment SC curitits of this character have had a substantial growth in importance
 They are the obligations of com
 panies supplying communities with
 water, gas, electric light, heat, pow
 CT, street railway transportation
 telephone service. etc.-all essentials to the life and prosperity of our com munities. Conservative investors arc
 paying increased attention to this class of bond.
 By exercising the proper principles of discrimination it is possible tc purchase utility bonds-or power bonds-that offer q combination o' safety of principal and liberal inter est yield The business of a public utility is practically on cash basis inventories to be marked down arc negligible; rates and fares have beer very BeheIdilS lIt'H9Cu' S"' "'i' are stable during periods of depres sion. and as commodity prices de cline operating expenses are reduced In everyday life we are all prone to errors. Therefore, it is though approriate to make few sugges tions to women who may be plan ming to make initial investments anC
 to warn against pitfalls awaiting tho unwary.
 Principal unduly risked in expecta tioution of huge income. Principal is too readily lost, with years of en
 deavor and self-denial needed to re coup.