New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-06


Questfon--I should appreciate very much
an angwer to the following. ] have slz,VNV
to invest. am willing TO take a cna"ce
with 81 coo. Thc balance $4,000 want 10
put in bonds giYing the highest yield con.
sistent with rcasonabe safaty.x OF course
should like a yield Of per cent or more
Can you suggest n diversified list of tweive
1000 Investment bonds aad stocks. eli
list that you would mako for yourself?
have no objection to foreign bonds, o. sven
ndus.rials. except that don't care FOR
luxury stuff like photographs and payer
rialos. hays heard Corn Products hisoiy
spoken OF Also you Recommend Danish
bonds How about French English -
c. II. NJ,
Answcr-We conjecture fran the
general tone of your letter that you
are not dependent on the income from
your $4,000, and that you desire high
yield bonds with reasonable safety and
q few stocks with little spice in them.
For the $4,000 we suggest the follow
ing bonds, 81 900 par value of each:
Danish s., Swedish IS, French 71es
(non-callable); Belgian 7izs (callab,e
and payable at 115), and United King
dem 5ias 1929, the conversion privilege
Of which may become profitable If
sterling exchange goes TO $40 before
1929. These issues yield from more
than to more than per cent. They
arc as secure as the good faith and
credit of the borrowing nations, mat
ter about which doubtless you have
your own opinion. We suggest also
Sinclair Consolidated convertible 7ia
per cent notes 1925 at about Ella, to
yield 1909 per cent These notes, prac
tically the only funded debt OF the
company, are outstanding in the sum
of SAT 1904, 900. They are secured by
pledge with the trustees of the capital
stocks and other securities Of subsidi-
aries now owned or hereafter acquired
Sinclair earned in 1920 net S1s, $50 900
after charging off nearly S12,0000O
for depletion and depreciation, COM
pared with s9,590,000 in 1919, when
S10,000,000 was written off Net work
ing capital was $53,800,000, compared
with $36,000,O00, and cash was S13 ,000,-
600, compared with S7,659,000 Ground
figures). The company is earning its
interest charges many times over, and
In view of its assets and conservative
dividend policy we think the notes pre-
sent nothing more than a business
mans risk as to principal The notes
are selling low for many reasons, in
Guiding the speculative nature Of the
Oil business and its present depres-
sion, the short term, and the fact that
they were badly handled in the mar
ket. For the remainder we suggest a
Cerro de Pasco convertible 8, 1881, and
an International Mercantile Marine
first and collateral 6, 1941, to yield 10
per cent. The Cerro de Pasco issue is
convertible into the stock of the COM
pany at the rate of thirty shares for
each $1,000, so that each one point rise
,, ,-.o of -%1
should mean a three point rise in the
price of the bond. The stock recently
was about %. 1t has been to 321a this
year, 61ss last year, and 671s in 1919.
The Marine bond is q sound invest
ment, in our opinion. For your stocks
we suggest All American Cables, Inc,
which has no funded debt and no pre-
ferred stock, pays ST, and was recently
quoted at 104-107, and has not been
below par since 1905. The stock is
listed on the Stock Exchange but is not
active. Also American Bank Note COM
mon and an improving public utility,
such as Columbia Gas and Electric, or
Pacific Gas and Electric. The Corn
Products Refining Company is one Of
the large war earners which plowed
back great deal into the company in
the flush DAYS. 1t did not start COM
mon dividends until 1920, when the to-
tai surplus was $35, 1873. 900. The sur
plus. after preferred and common divi-
dends December 81, last, was $685.
900, the 6 per cent on the common call
ing for less than 100000 and the 7
per cent on the preferred for about
s1,750 600. The company appears to
be doing we'll despite the collapse in
the sugar market. There was some
talk Of disseminating the Il per cent
extra dividend at the June quarter, but
it was declared. The stock is probably
a good business mans speculation.