Evening star., 1922-09-17
|A|GHGRADE' BONDS
NEARLY STABILIZE
Redemption Features Pre-
vent Gains-Want Good
? Investments.
BY BYRON SELLER.

BY BYRON SELLER.
NEW YORK. September aS.-rhs
price trend for investment securities
during the week did not throw much
light on the immediate future of
the bond market. Money. rafes
showed an inclination 70 harden and
prices of high-grade listed invest
ment bonds seemed to be stabilized
around current levels. Inactive and
unlisted securities about the prime
quality In which there could be no
question were in urgent demand.
however New, offerings. also on a
new low basis. were eagerly absorbed.
rake four railroad bonds of the
highest quality, for example. and cur
rent quotations will be found at
about the high level OF the year
trsl mortgage 3hs sold this week at
slk against a high for the year of
e3, Atchison General As sold at 80
against high of s5h. Chicago. Bur
aington and Quincy, Illinois division.
s5. Central Railroad of New Jersey
5s sold at 110 against a high OF
1l0A.
Seen, to BE Stabilized.
All these bonds are legal invest
ments for savings banks IN New
York state and are considered the
best OF their class For the present.
at least, investors In this grade of
security do not seem ready to aa-
vance their bids much above the
1t is equally true. however. that
II is perfectly possible to dispose of
large blocks Of such frst-grade
bonds without any shading OF the
price. And securities which yield
a half per cent higher. say 5 to bia
the, week. provided always there
could be no doubt about the invest
ment standing Of the security. Even
bonds fully taxable were in demand
Lowest Rate Since War.
New offerings told the same story.
Take. for instance, the new issue
OF Illinois Central Equipments pri-
These certificates were put out at a A.,
per cent rate to yield 4.s0 to 4,s5 per
cent This is the lowest rate since the
war.
the railroads in general and the un-
questionable financial strength Of the
Illinois Central in particular were
factors. but the testimony to the
position OF the money mraket was
eQNally plain.
Another notable instance was that
OF the new special preferred stock
OF the General Electric Company.
AT one time Of the week this stock
on when-issued basis sold to yield 5
per cent. nat Bear in mind that this
Is purely investment security. The
aiViuend rate is fixed at 6 per cont
II mas no speculative attraction
Whatever. 1t is simply the unsecured
Company to pay per cent dividends
ana no more and that only after all
interest charges have been met on
General Electric Indebtedness.
Discrimfnatioa General.
The same careful discrimination as
70 quality runs through all the Sc
curity quotations Of the week The
tration. The French issues have been
notably weak. In fact, with the ex-
ception of the obligations of the
newly established nations in south
eastern Europe. such. as Czechoslo-
vakia, the French bonds are selling
at price to give a higher return
than any other foreign government
issue.
The reason for This is very plain.
The French financial problem is -diffi-
obscure. 1t is not. enough to point
out that the French reputat ton for
meeting obligations is of the very
best and that The outstanding eI-
ternal loans are very small per-
centage of the total Indebtedness.
The quotations tell the story OF the
uncertainty in the investors mind.
Attractive Issues.
Swiss bonds and Canadian issues
are utstanding examples of an at
tractiveness the lack of which is so
evident in the French securities. New
Canadian 5s of 1852 sold this week at
par. American investors, as rule.
he
of Canadian bonds than they have of
that Of their own liberties. Swiss SIS
sold at l21. At this price the current
yield is 6.6 per cent and the maturity
until it is remembered that Swiss SIS
are callable on July !. 1890. at los.
If the European situation continues
to improve there is no reason to
doubt that the government of Switzs
erland will take; advantage of this
option. And a bond bought today at
121 and redeemed at 105 in eight
years yields SIS per cent The dif-
ference in yield from that given BY
the Canadian bond is not so great
after all.
Redemption Features.
1t is this same. possibility Of re-
demption at a fixed price which oper-
tations for many otherwise. very de-
sirable securities. Among bonds a
notable instance is that Of the, Bell
Telephone of Pennsylvania Is selling
around 10SI.. This is one, Of the best
Of the utility bonds. 1t gives very
current yield of 6h per cent and. Il
allowed to run to maturity, ii still
yields 6.3 per cent. -. -"
But this bond is. callable on any
interest day. after sixty days notice,
at 1917 II the New York. Telephone
Company can sell at 6H per cent
preferred stock at par and have it 60
to 100 in. the open market almost
Immediately. there seems no good
reason why another equally strong
subsidiary of American. Telephone and
Telegra phi should have to pay 6E per
cent for money secured by bonds.
On Preferred Stacks.
Among preferred stocks the out
standing example is Standard Oil OF
New Jersey. Paying al per cent
dividend. the stock sells between l16
and H.. while United States Steel
at 12l. The difference in price does
not represent difference in quality.
but merely the fact that the Stand
ard Oil Company will soon have the
privilege Of retiring its. preferre6
stock at 115. In the face Of thfs
Meanwhile. quality considered. 1t Of
fers a very high return for the man
who does not object to what may
possibly be short-t term investment.
One point in this connection sts the
market price does not seem to have
been taken into consideration. That
is the advantage to every large cor
poration of having wide public in
terest in its securities. Some isvest-
ment experts believe that on this ac-
count the Standard Oil Company OF
New Jersey would hesitate before.re-