New-York tribune., 1921-07-11
Holding Missouri, Kansas & Eastern

Question represent a client. the minor
part at OF whose Investments Is in the following
iIst OF securities, upon which | would like
y, yuuI Judgment as to real worth. ahvisa-
,hllity of, holding and tho best method Of
company ION ~ per cent bond, due July /,
l999; second, Imperial Japanese govern
ment 1rt bond, 4 u per cent sterling loan, due
Company first mortgage forty-year per
cent gold bond; fourth. Southern Railway
Company first consolidated mortgage bond.
ern Pacific Company per cent gold bond.
due 1870; sixth, st. Louis Iron Mountain
csnt q southern m I unified ,dso and refunding per
Line per cent gold bond due 1929,
eighth, Chicago, Rock Island & Pacific
Kailway Company refunding per cent
gold bond, due April /, 1884: ninth, Cen
tral Georgia Railway Company cousol-
uated mortgage per cent gold bond due
Ie4S; tenth Chesapeake & Ohio Railway
company first consolidated mortgage per
cent fifty-year gold bond, due May l. 1898;
eleventh. Columbia Trust Company GER
tihcate OF deposit the Missouri Kansas &,
Eastern Railway Company nfty-year first
mortgage per cent gold bond. Particu-
larly ] would Ike your view on this last
named security.--S. III. b.
Answer-Hocking Valley first con-
solidated 41ss, due 1899, are subject to
only $3 ,S42 900 prior liens, and underlie
good investment. Imperial Japanese
government 41as are payable at fixed
rate of exchange, $A.87, both as to prin-
cipal and interest. You are familiar
undoubtedly with the relations between
Japan and the United States and can
Judge for yourself as to whether there
is any danger of strained relations be-
tween the two countries which might
depress the price of the bonds in .his
market. Brooklyn Borough Gas first
mortgage 5s, due 1888, are part of
small issue of $50o,O00. apparently we'll
secured since they underlie the general
os, but are not readily marketable. We
are believers in the future of the
Southern Railway and think that first
consolidated IS are good investment.
Southern Pacific collateral As, due 1049,
ere good investment of a strong road.
st. Louis, Iron Mountain & Southern
are selling at price which yields less
than per cent current interest but
nearly 10 per cent interest if held to
maturity in 1929. In other words. an
parently the market is in some doubt
as to how the refunding of these bonds
will be carried through. Oregon Short
Line 4s are a high grade investment
Chicago, Rock Island & Pacific first re-
funding Is are a we'll secured bond of
rather weak company. Central of
Georgia is controlled by the Illinois
Central and its consolidated IS are a
good Investment Chesapeake & Ohio
first consolidated IS are an underlying
bond and high grade investment.
Missouri. Kansas G. Eastern are in de-
fault. They are first mortgage on
the line, which connects the main stem
of the Missouri, Kansas & Texas with
the city of st. Louis. The Katy could
get traffic rights to St. Louis over some
other line as cheaply, it is said, as it
coMd pay the interest on these bonds
and from the price at which they are
selling, around AZ in December last and
a bid Of 40 quoted, the chances are
that in the reorganization plans which
Will be announced shortly holders may
receive in part at least non-interest-
bearing or income bond. AS long, how
ever, as your client has held the bonds
up to the present we would be inclined
to advise holding it until the reorgani-
zaton rian comes out if he can afford
to continue to hold securities making
no return not only until the reorgani-
zation plan is made public but for a
year or two years thereafter.