The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-01-23
GOOD MARKET
FOR STATE
BONDS
Bond Experts Declare Re
moval Of Tax Exemption VIII
Make Little Differences.
By MUNROE ROBERTS.
Copyright. 1898. by Cosmopolitan News

Copyright, 1893. by Cosmopolitan News
NEW YORK. Jan. 23-'.'n win
make. very little difference from the
market standpoint, whether or not
the tax exemption feature on .mu-
nicipa1 and State bonds Is removed.
There is always, good market for
municipal bonds; and the attitude of
the Investment. banker on the tax
exemption proposition must necee-
Darily be neutral.
That is the way F. II. Johnson,
head Of the municipal bond depart
ment Of the national bond house sof
A. 3. Leach & CO., summarized the
matter, today Tor the Cosmopolitan
News Service.
Naturally the removing OF the
tax-exempt privilege would cut down
the spread between the income yields
Of the highest grade municipal and
industrial bonds. In other words, It
would increase the borrowing rate OF
the municipalities. for It IL the con-
sumner who must pay the blu In the
long run.
I'm order to illustrate this mat
ter. let us take the bond OF q city
like Albany, NJ z, which, by the
~
rs any municipality In the United
States. These bonds are now sen,
ing at $50 per cent income yield.
Against that, place the first mort
gage bonds of the COMMONWEALTH
Edison Company, also q leader In
its class. on which the income yield
50 SO per cent.
"This Il q spread OF $50 per cent
to which i attribute about one-half
Of per cent to the tax-exemption
privilege.
cit Is hardly TO be expected that
q municipal bond win sell at bet
ter price than q bond Of the United
States Government. Now, the AZ
per cent Liberties are selling below
par, which means an income basis
Of over IL per cent, nearly half Of
I per cent above the Albany bond
AT the present time the small
investor, cannot afford to- buy Enu-
nicfpals because fhey are out Of
line with taxable bonds and sup
pose there IL no reason why they
should prefer them to the best class
Of public utility and industrial SCI
curities.
aFrom the standboint of GENERAL
equity and American fair. play.
there Is no argument whatever for
the tax exemption privilege, but It
Il extremely doubtful IL con-
stitutionaI amendment abolishing
exemption could eyer be put
through.
"Municipal and State officials do,
not take kindly TO any proposition
which would limit their powers or
conversionally that would increase
the jurisdiction authority of. the.
Federal authorities either IN sfinari.
cling or in any other. project In
which they are mutually inter
e0ted. - ~ ~ = s II q
New offerings today. Included:
$4,000. 900 Edward @. Budd Manu-.
featuring Company, 6 per. cent sink
ing fund convertible gold bonds,
dated February 1, 1923, and due
February 1. 1888, at 90 and ac-
crued interest yielding approx
mately 6.10 per cent; $4,000 geo
z per cent cumulative preferred
stock Of the same company at 80
and accrued dividend yielding TOT
per cent. Bonds are convertible
after February 1, 1925, into z per
cent cumulative preferred stock par
for par; $4,000, 900 Rudolph Wur-
liter Company. per cent sinking
fund gold debentures due January
10. 1888 at 80 and interest yielding
about Go per cent.