New-York tribune., 1921-05-15
Tired of Holding St. Paul Preferred


Question-There are held in my family at
the present time two blocks of Chca go,
Milwaukee e. st. Paul preferred stock, one
have Al sut reached the conclusion that ii
is advisable to sell this stock and would
like your opinion as to what to purchase
stock was bought at a time when this
security was a trust fund investment in
Wisconsin and was purchased at price
in excess of par. In view of the heavy
loss which will be entailed by the sale of
this stock 1t has been suggested that IT
proceeds in New York state railway con-
solidated u per cent bonds and INTERIOR
ough Rapid Transit 6s Dc you approve
enough to let me have the benefit OF your
opinion any other stocks or bonds
which you would suggest as an alterna-
Answer-The Chicago, Milwaukee &
St. Paul has had difficult operating
has not as yet solved that problem. If
you are looking for safe investment
it would be wise to sell your st. Paul
preferred, take your loss and buy some
of the high grade bonds which at pres
ent prices yield in the neighborhood of
Z per cent. We do not advise as to spec
ulation. You are business man, how
ever, and in a position to watch the
trend of earnings. We think that
either Interborough Rapid Transit IS
or New York Street Railways Consoli
dated AIS are speculative. BY hold
ing on to your st. Paul preferred you
are speculating on the chance that the
railroad situation will work out salts
meet its obligations which mature in
the next few years We think it has
good chance to solve its operating
problem. Buying the New York Street
Railways, you are speculating on the
chance that the public utilities situa-
tion in New York will improve. In
buying Interborough Rapid Transit 5s
you are speculating on the chance that
the Miller plans for New York City
traction affairs will work out satisfac-
torily. We suggest for your considera-
ton the Danish Consolidated Municipal
loan, due 1946. These are per cent
bonds, and the entire issue must be re-
deemed at 10712, which gives you
of the life of the bond 100000 of
bonds are to be retired annually at
l071s, and during the remaining twenty
years S650,000 are to be retired annu-
ally at 1071z. If your bonds happen to
be called among the first half of the
bonds called you will make a consid-
erable profit. If they are not called
until the due date in 1946 you will re-
ceive a premium of at least ia points.
Advantages of Foreign Bonds
Question: wish you would give
your opinion to the value OF the fol-
lowing bonds as permanent investments:
Belgium 8s. Swiss ss, Norway Ss Den
mark ss, French Republic Ss AS money
is bound to grow cheaper eventually
have been of the opinion that a govern
ment bond such as the above, with their
unusual yield. should be a security well
worth possessing. Am ] right? Also
would you kindly let me know IL there is
any difference between the Belgium Is
and 7lzs aside from the internal rate?
advance as cheaper money prevails? I
will appreciate very much all the iEfornla-
tion you may be pleased to give me re-
garding the above.-J. A. X.
AnswerA-We agree with you that as
the current rates for money get lower
the market price of strong foreign
government 8 per cent bonds will in
crease. The Belgium TIES have sink
ing fund provision by which $2,000,000
annually are drawn by lot for redemp
tion at 115. For this reason they sell
as high almost as the SIS. In judging
of the relative merits of foreign gov
ernment bonds you should take into
consideration the domestic and inter-
national problem that each country
has. Switzerland, Denmark and Nor
way have no pressing social problems
and are not overburdened with war
debts. neither are they apparently
vitality Interested in the exacting of
the indemnity from Germany.