New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-10

-, ouestion1-A fey months ago ,boueWt
lowing: Deere 8 Co. IL per cent gold
note 1881: Davidson Chemical Co 15-year
3 ; per cent sinking sdn. fund soid deoenture
note; Stewart Warner speedometer Corpo-
ration 5-year per cent gold bond Ohio
b pond due Ss per Ssn slnlng fund gold
have your opinion OF the above securities?
Answer-Deere & Co. are manufac-
tuners of agricultural implements, and
this business has been adversely affect
ed by the severe depression. The notes
are not secured by mortgage, but are
direct obligation of the company.
Davidson Chemical IS are direct OBJ
iigatlon of a company which manufac-
lures sulphuric acid and other heavy
chemicals, and in 1920 had large in
crease in earnings. The De Laval Sep
ara:or IS are a direct obligation of the
company, but are not secured by
mortgage. The company is a strong
one, in our opinion. 1t manufactures
product, the De Laval separator, which
has good reputation and which is used
more and more extensively by dairy
men and farmers. The company's earn
ings at present may be affected by the
depression in the agricultural field,
but not, we think, to an extent to cause
you worry. The Stewart Warner
Speedometer, manufacturing, as it
does, an automobile accessory, is af-
fected by adverse conditions in the au-
tomobie industry, but in 1920 it earned
s2.808,000 surplus after interest
earned n 1919. It's per cent bonds
are direct obligation of the company,
but are not secured by n mortgage
The Ohio Power Is are secured by a
general mortgage, and there are SIS
500 900 of them outstanding. The prior
hens amount to less than $3,0OO,OOO.
The company earned in 1920 $2,477 900
net available for interest charges,
which was a little more than double
the interest charges. Disregarding the
ONO Power bonds. which are in a diff
ferent class, your investm ent@is all in
securities of one class. The various
manufacturing companies which we:s
through period of great prosperity
and expansion of business during the
war boom were left in many cases in a
position where they had to borrow
money for working capital at the end
OF the war Money rates being high.
the banks were unwilling or unable
further to carry such companies. and
they undertook TO sell a high coupon
rate bond or note, in manv cases call
able or convertible. but not secured By
a mortgage, although protected by more
or less conservative provisions against
the companv's mortgaging its property
Tor too Great an amount of bonds rank
ing senior to the recently issued bonds.
1t IS too soon to form judgment as
10 how successful this class of fnanc-
ing will be, but in your individual case
we would recommend that YOU diversi
fy your investment. AS an investor, one
of YOUR aims should be to so place your
money as to be Independent Of any par
ticular class of financial securities and
financial experiments, at least 10 the
extent Of having other things to fall
back on If one such experiment. proved
a failure. Assume that you kept the
De Laval Separator notes and the Ohio
Power and shifted from the others into
good railroad bond, good foreign
government bond and a bond such as
the Standard OIL Of California Is, you
would be IN much sounder investment
position, IN our opinion.