Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-09-17
MONEY RATES HARDEN; BOND PRICES
OF HIGH GRADE INVESTMENTS ARE
SOUGHT AROUND CURRENT LEVELS

have been met Oh General Electric
indebtedness.
Buyers Discriminate
The same careful discrimination as
to quality runs through all the Sc
eurity quotations of the week: The
foreign group offered a good illustra-
ton. The French issues have been
notably weak. In fact, with the excep-
ton of the obligations of the newly
established nations in southeastern
Europe. such as Czecho- Slovakia, the
French bonds are selling at a price to
give a higher return than any other
foreign government issue.
The reason for this is very plain.
The French financial problem is diff
ferent in the extreme in that the flu
ture is obscure. 1t is not enough to
point out that the French reputation
for meeting obligations is of the very
best and that the outstanding external
loans are a very small percentage or
the total indebtedness. The quotations
tell the story of the uncertainty in the
investors mind.
Swiss bonds and Canadian issues
are outstanding examples of an at
~tractiveness, the lack of which is so
evident in the French securities. New
Canadian Us of 1852 sold this week at
par. American investors. as a rule,
have no more doubt of the security of
Canadian bonds that they have of
their own Liberty bonds. Swiss bonds
sold at 101. At this price, the cur
rent yield is 6 per cent and the ma
turity yield is sos per cent. This looks
high until it is remembered that Swiss
SIS are callable on July l, 1880, at 1O5.
IF the European situation continues
to improve, there is no reason 10 doubt
that the government in Switzerland
will take advantage of this option. And
a bond bought today at III and re-
deemed at 105 in 1880 yields 5.25 per
cent. The difference in yield from that
given by the Canadian bonds is not so
great, after all.
1t is this same possibility of redemp-
ton at a fixed price which operates to
keep down the market quotations for
many otherwise desirable securities.
Among the bonds notably is that of the
Bell Telephone of Pennsylvania Is,
selling around 1851. This is n of
the best of the utility bonds. 1t gives
a current yield of 612 per cent and if
allowed to run to maturity it still
yields 6.3 per cent,
But this bond is callable on any in
terest day after go days notice at
107b. If the New York Telephone
company can sell a 81 per cent pre-
ferred stoc kat par and have it go to
100 in the open market almost i'm
mediately, there seems no good reason
why another equally strong subsidiary
Of the American Telephone and Tele-
graph company should have to pay 6M
per cent for money secured by bond.
Among preferred stocks the out
standing example is Standard Oil OF
New Jersey. Paying a Z per cent divi-
dend, the stock sells between 116 anC
III. while United States Steel pre-.
ferred, also paying Z per cent, sells
at 121. The difference in prices de.
notes no difference in quality. but
merely the fact hat the Standard Oh
company will soon have the privilege
of retiring its preferred stock at 10
In the face of this provision. the STOCK
! cannot advance. Meanwhile, quality
! considered, it offers a very high return
for the man who does not object tC
what might be termed a short-term in.
vestment.
One point in this connection. The
market price does not seem TO have
taken into consideration. That is TIL
advantage to every large corporation
of having a wide public interest in it!
securities. Some investment expert.
believe that on this account the Stand
ard Oil company of New Jersey woulC
/ hesitate before retiring its preferred
stock.