New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-03
Bond Salesman Recommends Tribune

eaestiosr--A short time ago n bond sales-
columns OF 'rhe Tribune and also said that
You would give reliable advice onarny In
Nestinents should like your opinion upon
the hrst mortgage Z per cent gold bonds,
series a, OF the Connecticut Light and
rover Company and ALEC upon the ~ per
cent itrst refundng mortgage sinking fund
geld bends OF the American Agricultural
Chemical Company, both new issues. ] am
not a financial man, probably never shall
be- want a snfe investment that l shall
net nave to watch and one that Will yield
az nigh return as is consistent with
SAFETY. In your opinion do those two issues
meet these requirements, and which would
you give the preference, If any? am also
prior preference stock of Bird a Son, Inc.
Of Boston. should like to know what YOU
think q ,, this also; ] understand that it y
standpoint what IS the difference between
listed and non listed stocksf One moro
question and am through. What is tho
Lee. .Higginson & Cor I feel the need of
all the reliable advice I can get d. 7.
Answer--The Connecticut Light and
Power Company properties include
electric generating plants, with $4,000
horsepower, of which about half is
hydro-electr:c power. The procee1s of
the new S6,500,00o first and refundng
2 per cent series A bonds. were used in
part to pay off floating debt incurred
in building 5,0oo-horsepower plant
on the Housatonic River. The use of
electricity for power is steadily grow
Ing. and while Connecticut does not
have the natural resources for develop
ing hydro-electric power on an immansa
scale, as do some of the Western states,
1T has the established manufacturing
concerns which consume power, and
therefore is potential customer for a
power company on large scale. The
cost OF transportation of coal is unlike
~ to decrease in the near future. Con-
necticut is dependent for its coal either
on the water routes from Hampton
Roads or on the New York Central sys-
TEN and it's connections. By either route
the transportation of coal is expensive
and the supply limited 1t is, therefore
on the future of the Connecticut Light
and Power Company which we base
the opinion that the Z per cent bonds
are & good investment. The fertilizer
business is speculative under present
conditions, but the American Agricul-
tural Chemical balance sheet. as Of
June 80, 1920, appears to be fairly
good one. While the circular says that
the proceeds of the $30,O00,OO0 tx per
cent first refunding mortgage bonds
will be used to retire s5,QO0,O00 con-
vertible debentures and increase the
company's net working capital "re-
CURED for the increasing demands of
the company's business" the June 80
balance sheet suggests the necessity
also of financing nearly Sis ,0o0, 900
notes payable and providing cash
nearly 100000 900 bills and accounts
receivable. I'VE consider the 71a per
cent bonds, due 19Al, as reasonably
good investment. but it needs some
watching, like most securities. Bird
q Son., Inc, is an old Massachusetts,
concern manufacturing paper products
The per cent prior preference stock,
OF which there is sl,000,0oo outstand,
ing. is earning its dividend several
times over. 1t comes ahead of the 7
per cent first preferred and the s per
cent second preferred and the common,
all of which are paying dividends.
Lack Of listing does not affect the in
trinsic inert of security, but listing
usually provides market, which is de.
slrable, in our opinion, Lee, Higginson
& Co. enjoy good reputation.