New-York tribune., 1921-06-28

question: own the following, which |
consider high grade Anglo American Oil
7 las, 1925. s1,500; Bethlehem Steel 7s, 1925,
$1,000: Northwestern Bell Telephone rs,
ls4l, $1,000; Grand Trunk of Canada as,
1885, $500; Vacuum oil Is, 1886, $500; In
! ternational Mercantile Marine IS. f941,
ST. 600. also own bonds recommended
high grade at the time of purchase as fol-
lows: lnterborough Rapid Transit note 7
per cent 1921 bought at 81; Chicago Rail
ways per cent. bought at 70, due in 1927;
Government of Sweden s per cent 1899
$1,000, bought at 95. The following stocks
consider more or less speculative: South
ern Pacific. five shares; Pacific Oil, five
shares Pierce Oh preferred per cent, five
shares; Kelly Springfield per cent pre-
ferred, three shares. All this stock was
purchased at about 10 points higher than
the present price except Pacific Oil at Is.
l expect about $4,000 to invest June I. I
am considering these propositions: First.
! buy four long-term bonds with medium
rate. such as American Smelling 5s 1947;
City OF Copenhagen 5iss, 1874; Computing
and Tabulatiug 6s 1941, and United States
Rubber 5s. 1947, or, second, buy three high
rate cailable bonds, such as Danish Con-
solidated Municipal SIS, 1916; United States
Rubber 7As, $780, American Telephone and
| Telegraph convertible 6s 1925, or, third,
buy high grade stocks such as American
| Car and Foundry preferred, Bethlehem
Steel per cent preferred, United States
Rubber preferred American Telephone and
| Telegraph and others l shall be pleased
| to have your advice regarding my actual
holdings and my contemplated purchases.
I am not particularly worried when prices
mate prospects of the security. I hold my
full share of Liberty bonds and endeavor
TO keep informed regarding financial af
fairs.-C. w.
Answer-We use the term high grade
in rather specialized sense, of mean
ing bond with ample security of prin-
c1pal and we'll assured margin of safety
in annual earnings for a considerable
period of time, and we would apply the
term good investment to Bethlehem
Steel rs and to International Mercan-
tile Marine 6s, although the fact thai
these latter are secured by the stock
of the White Star Line gives them an
added safety that they would not have
were they only mortgage on the old
American Line steamships. We would
be inclined to hold on to the INTERIOR.
ough Rapid Transit notes and the Chi
cago Railways, although so doing in
wolves speculation in the outcome of
the street railway situation, and we
consider the government of Sweden SIS
as reasonably safe. Of the speculative
stocks, Southern Pacific is good, in our
opinion. Pacific Oil is pretty nearly
purely speculative, and Kelly Spring
field 8 per cent preferred is specula-
tion in an industry whieh at present
is having q particularly hard time
The most conservative, of course, would
be the first plan. If you insist, how
ever, on certain speculative possibili-
ties, the second plan, in our opinion, is
rather better than the third one. You
might consider substituting Danish
consolidated municipal IS for Comput-
ing Insulating IS in your first scheme
and have the attractive feature of the
chance of having your Danish bonds
called at 1o71a at an early date with
considerable profit.