New-York tribune., 1922-07-30
A. I. & Il. for Phone Subscribers

Question-As IA reader of The Tribune
anu antl, the investment information column
shares Of New York Telephone GA per cent
preferred stock and. as doubt you are
aware. received only three shRres.
think they proportioned poorly. as
thres-ahare subscriber received two shares
and flre-share subscriber received three
" a'.S pf =" rlui - person o aad
asked for fifteen. while one who had asked
%. o. twenty ares received five shares a
more In line They now offer the differ
ence In American TeIephone and Tele-
graph at the market. and while it rates
very highly among financial writers as
to security, and as the same authority
VIII tell you to Judge Il stock u good daal
by the yield, I cannot understand why it
such stocks as Atchson common Yield
less than per cent. Southern Pacific $50
! per cent and United States Steel about
. per cent. DO they ali rate higher than
american Telephone and Telegraph? BY
tsssa'ns tssa you your column daily have learned
that steers price Is because there are not
lot of bonds ahead of It. but is II not
true that with A. r. and T. there is no
diNviaendsI N, Then why does A. 7. and It.
sell on 74o basis when so many appar-
,1nG ,sntly ,l,,1, no9rer Regarded stocks sell on
OF n, T. and T.. selling higher In a better
market, and what has been tho high in
recent years? My opinion is that It IS
man TO buy shares on a 81 q month basis
with perfect safety as to his broker grant
ing, OF course, that you consider the stock
right What do you think Of Dutch East
indies Ss' 1852, as an Investment, and
Issue New YORK; Telephone Ga per cent
STOCK. constdering one is stock and one
q bond While am writing. may ask
What your opinion Is or Cudahy Packing
os. lS4s; also u. r. T, and Invnciblo Oil,
ten shares each, the onlNS common stock |
oV1 III good bonds?-G. H T..
Answer-The decision of the New
York Telephone Company to offer
shares of American Telephone and Tel
egraph stock on the same liberal pap
s.al payment terms by which it sold it's
25,0O0,000 61a per cent preferred stock
recently undoubtedly will be we'll re-
ceived by subscribers who failed to
obtain in the company's allotment Of
It's shares the number they sought to
purchase. American Telephone and
Telegraph stock does not rank so high
as New York Telephone preferred in Il
way-since the preferred comes ahead
OF the parent company's interest in
the New York company-but it is to
be regarded as an investment security,
especially for those who hold other
good securities and are in position to
watch earnings Of the Bell system.
Reasons for the stocks selling to yield
about 7.40 per cent while United
States Steel preferred and other high
grade stocks sell to yield less than
per cent were discussed at some length
i'll this column July 26. Briefly, the
difference is 3 reflection Of traders
Judgment as to the relative safety of
dividend rates. Other factors are also
concerned. If the company continues
the 9 per cent dividend and money
rates remain low or decline further, it
is reasonable to suppose that the price
Of the stock will advance. The stock
sold as high as 1855 in 1902, when the
dividend rate was 7Ia per cent, and as
high as 145 y in 1910, when the rate
was per cent. You are in error, by
the way, in your statement. of allot-
ments of New York Telephone pre-
ferred. Subscribers for Ave shares re-
ceived only two. The smallest sub
scriptions allotted three shares were
for nine. II is difficult to compare this
stock and Dutch East Indies IS, 1862,
the one representing an interest in a
corporation and the other the obliga-
tion Of g. foreign government The two
securities belong on about the same
investment level, however Cudahy
Packing IS, 1849, are suitable for q
business man, but B. r. r. and Irwin
chile Oil stocks are speculations. We
see no reason why you should make
change If you believe you can afford
to carry them longer in the hope Of q
recovery