New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-09-25
Hudson & Man. SIS and y. Y. Cen. 6s

pno-iion--t shoud srrr- ciatc your opin
:, In oo an thn following ~ rscetNed q
1000 Hudson Man tan Railroad re-
chased AZ ssia. and ii 81 900 New York
c cSnsrs' - ~ Per cent na9a ano dass, pnr
question appearing In YOUR column several
dnys ago | noticed that you recommended
holding Hudson & Manhattan bond
should person have one but advised
against buying one this time Wn YOU
give your reason for and the sdvantagr in
your opinion of the Ncw York Central
railroad bond In YOUR reply Will YOU in
nach bond mentioned above; that s, how
1t Il secured and tho relative standing OF
cach rs 3 true invest Tncnt or az a business
mana Investment as the may be -
u. l.. r..
Answcr.-Therc arc two issues Of
Hudson e. Manhattan per cent bonds
both due 1851 Apparently you have
the first lien and rcfunding 80, series
A, due February /, 1857, since these arc
the bonds that arc recently selling at
about the price YOU paid for them. The
other is Hudson g. Manhattan adjust
mcnt income per cent, due February
/ !, 1885, selling around Az The first
lien and refunding IS are secured by
flrst mortgage on the tunnel from
9th Street in Jersey City to the Penn
sylvania sta tion in Jersey CITY. and UNI
der the Hudson River to the Hudson
Terminal Building at Cortlandt. Dcy
and Fulton streets; and are secured by
q second mortgage on the tunnel from
18th Street, Jersey City, to the Hoboken
Terminals and under the Hudson River
to Christopher Street and Thirty-third
Street, New York. and are also a second
lien on the Hudson Terminal Building.
The Hudson & Manhattan is an inter
state railroad, subject to the super
vision of the Interstate Commerce Com
mission. Its interest charges call for
s2,1bS,535 annually, and in 1919 under
government rental which was based
on the record of the company in the
t t; years prior to government opera
ton, the net available for interest
charges was $2,832,097 IN 1916 prior
to government operations, the earnings
available for interest charges were So
8S7,531, and the interest charges call
for $2.l55.4 o2. AS you will sec this
does not leave large margin Of safety
over interest charges. The latest earn
ing statement available is that for the
SIX months ended June 30, 1921. In
mat period. the gross earnings of the
company were s5.2IG,035. and net earn
lngs s2.135,401. and the interest charges
called for *2,o51 .202 These interest
charges include the interest on the ad-
lustment cumulative income IS. The
opinion that we express is based on the
following line of reasoning To sell at
present prices for holder who has
bought at higher prices involves loss
OF principal. In our opinion the Hud-
son Manhattan situation is going to
turn out all right. If railroad stocks
generally sell at considerably higher
prices and railroad bonds to some ex-
tent follow them. it might be possible
IN the near future for a holder who
has bought at higher prices TO get out
without loss. On the other hand.
the earnings of the company are not
suhcIent to make the Investment par
tlcuiariy attractive. az compared with
other investments in the present mar
Aet, m our opinion
New York Central Railroad convert
iDle debenture 6s. due 1885. are a good
lnVestment IN our opinion. They are
'he direct obligation of strong rail
road company which has been showing
good earnings even under government
operation, and is showing big i'm
proVement since government operation
was rellnQulshed, especially in the first
SIX months Of 1921. The bonds are
convertible up to May |, 1925. into
New York Central stock at 105. We
rank both bonds as investments and
the New York Central bond as GOOD
and attractive Investment. even though
IL Is not secured by mortgage.