New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-18
Investment Information

you do not regard 1t favorably, classifying
IT as business mans invcHtment rather
want TO hold anything that you do. not
regard as desirable in every way. ] nave
great respect for. your Judgment, az you
are familiar with all these things ana
have no axe TO grind Would you advice
me to sell this brazilian bond and get d
Kingdoms of Denmark per cent bond
The only objection BILE feature, from my
standpoint Is that II Ia callable. have
also thought of other bonds, but unless
there were to be considerable advantage
In buying something now don't see but
that might AZ we'll rclinquish tho phr-
tial payment arrangement. pay up the Pull
man stock and then get securities when
have money to pay for them outright
Answer-We have expressed from
time to time our objections to the par
tial payment plan, and your expert
ence with S. S. Ruskay & Co. is
good illustration of the fact that such
schemes are really margin accounts,
and that they usually are intended to
induce those who know better, and
those who don't, to- trade in speculative
stocks. You showed good sense and
will power in spurning the advice OF
your broker, who was asking you to
buy when stocks were higher than they
are now. His object was to gain com
missions. There is little nutrimcnt in
partial payment plan running over
period of months for q broker who
fulills his part of the agreement. AS
a matter of fact the partial payment
buyer ought to pay a good, stiff service
charge. Never forget when a broker
tells you you can Control" stock by
putting up only part of its cost, that
the stock also can control you and fire.
quently does, in that if it goes down
you are subject to margin calls. SO
far as your Pullman stock is concerned
it is n good business mans inve stment
and you might as we'll SO through with
it. AS TO the Brazilian IS, your sales
man friend, of course. drew as at
tractive picture as he could That is
his duty as salesman. Your duty as
an investor was to inquire into the
financial and economic condition Of thr
Republic, which is not good, aud the
command the Federal Government has
great. The per capita debt may be
small, but the per capita wealth is also
small. Nevertheless, we think the bond
will be paid, principal and interest, but
there is an element of uncertainty
which removes the bond from the high
grade class. We do not think it is as
good as any Of the other foreign bonds
you mention. We are a bit skeptical
about the United States Government
sending WarShlpS TO Bra2ll TO cOllect
your interest. We have sent warships
to Mexico several times, but they never
collected nickel of the interest on
the bonds held here, which has been in
default since 1914. They did not try
to. AS rule we advise against bor-
rowing at the bank TO buy bonds
When you put up your Liberties to buy
the Brazilian bond you got higher re-
turn, but you weakened your invest
ment position, is our opinion. We
leave it to you to decide whether to
sell the Brazilian issue If you desire
non-callable foreign bond, the new
French T. is non-callable. Redmond
& Company are good house, we think,
and we would not be inclined to blame
them if their salesman was more en-
thusiastic about the Brazilian issue
than we are. Five thousand dollars is
not enough life insurance for you: We
suggest that you increase your build
ing and loan shares. You are over
reaching yourself in the matter of
buying securities now, and we agree
that your plan for dehatiin expressed
in YOUR conclusion is a good Cne