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TEVER before were so many attractive, tempting investments offered to

the public. Many of them are as safe as government bonds and offer attractive rates of interest. Others are worthless or questionable. Our readers are constantly writing us asking for disinterested advice in regard to their investments. Accordingly, we have secured the services of an experi. enced financial editor, who will advise readers of this magazine in regard to any investment in stocks or bonds they may be considering. All inquiries of this nature will be held in strict confidence and answers will be made by mail in every case to those who enclose a stamped addressed envelope for reply. Questions and answers of particular interest will be published in these pages from month to month. { ADDRESS: Financial Editor, The New Success, 1133 Broadway, New York, N. Y.

Railroad Bonds and Stocks

tionately to the more wholesome situation that 1. Q.-As a subscriber to New SUCCESS, I am will exist when this readjustment shall have writing you for information about investments.

been completed. Of course, we all know, that Government bonds The following bonds illustrate a fairly wide represent the highest grade investments, closely range of choice in respect to both quality and followed by municipal bonds. But, what do yield: Atchison, Topeka & Santa Fe general you think of railroad bonds and stocks at the mortgage 4%, due in 1995, selling to yield about present time? Is it not possible to select securi- 5.25 per cent; Union Pacific first mortgage 4% ties of these two classes which are safe and which

due 1947, selling to yield about 5.35 per cent; at the same time offer opportunities for appreci- Oregon-Washington Railroad & Navigation first ation in the near future. Kindly let me have refunding 4%, due 1961, selling to yield about your advice with some specific suggestions. 5.90 per cent; Illinois Central collateral trust 4%, A.-We are glad to note your discrimination

due 1953, selling to yield about 6.30 per cent, as to Government and municipal bonds, assum

Wisconsin Central first and refunding 4% due; ing of course that you have reference to United 1959, selling to yield about 7.30 per cent. States Government, and domestic municipal Among the standard well established diviissues. It is, indeed, among these two classes dend paying railroad stocks we think the that the most conservative investments are to following are representative of the best to be found investments which not only return

buy for investment purposes: good yields of income at current prices (from 5 to 6 per cent) but also possess special advantages

Div. Price Approx.

Rate About Yield in respect of tax-exemption.

Atchison Common

85 But on the other hand, there are undoubtedly


Chicago & Northwesta good many safe, conservative investments in

ern Com.

5% 80 6.25% the category of railroad bonds and stocks. It is

Louisville & Nashville 7% 103

6.80% our judgment, moreover, that the present is a Northern Pacific


89 7.87% good time to buy such securities in the expecta- New York Central 5% 78 6.40% tion that they will eventually show a good deal Southern Pacific


112 5.37% of growth in underlying strength and value.

Union Pacific

10% 122 8.20% Fundamentally, their positions, as compared with the last few years, were fortified substan

Safe Bond and Stock Investments tially by the new schedule of railroad rates and 2. Q-May I please have your advice in rechanged operating conditions provided under gard to safe and profitable stock and bond inthe Transportation Act passed by the last ses- vestments? sion of Congress (the so-called Cummins-Esch A.-It is extremely difficult for us to give inBill), although relatively few of the benefits that telligent advice in matters of this kind to correare expected confidently to secure from this con- spondents who fail to tell us more specifically structive legislation, have yet begun to be re- what they have in mind, and what their circumflected in net earnings.

stances are. One of the most important things Market prices of railroad securities have de- we have to consider in connection with investclined considerably of late as an incident to the ments is their adaptability. They vary widely general economic readjustment which has been in quality and in fundamental characteristicsin progress. They will probably react propor- in what might, in fact, be called structural de


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sign. They are in some respects like clothes in As the term “debenture” implies, the New that they ought always to be selected with a Haven 4's of 1922 are not secured by mortgage. view to their fitness for the purchaser. Stocks They are a direct credit obligation of the comor bonds that may quite properly be recom- pany, however, and the indenture under which mended for one person are very often entirely they are issued provides that in the event of any unsuited to another.

mortgage being placed on the New Haven propIn a very general' way, however, we might say erty these bonds must be equally and ratably that we feel the a time when a more secured by such mortgage. or less cautious attitude ought to be taken The New York, New Haven and Hartford is a towards industrial stocks. Investments in this fine railroad property. It became involved in class of securities ought at least, to be made financial difficulties a few years ago, however, with great care and discrimi

through what appears to nation. Standard, divi

have been ill-advised policies dend paying railroad stocks

of management, and has been -those having long estab

undergoing reorganization, lished dividend records, can,

you can

without resort to receiverin our opinion, be safely

afford to ship. Its affairs are now in bought for income. There

such shape as to offer a good are also a good many public

deal of encouragement for utility stocks,-preferred is

the future of both the bonds sues in particular,—which you can af

and stock, but they are still appear not only to be well ford to save it.

surrounded by many, uncerassured income producers,

tainties, in view of which we but also to be selling greatly

do not believe the securities out of line with their real

can be recommended for merit.

conservative investment. Bonds might be ranked as follows in order of If you compare the bonds in question with other their relative investment merits:

railroad bonds of even second grade standing, it U. S, Government Bonds,

will become apparent that they would in all probDomestic Municipal Bonds,

ability not be selling at a price to yield as much as Railroad Bonds,

16 per cent, if there was definite assurance that Public Utility Bonds,

they would be paid off at par upon maturity. Industrial Bonds.

No, we think there is a considerable element There are attractive opportunities for invest- of business risk in these bonds. ment among foreign government and municipal bonds, but such securities are surrounded by

Kingdom of Norway Bonds conditions so different from those surrounding 4. Q.-I will appreciate it very much if you our own domestic issues that we think perhaps will give me information about the Kingdom of they ought to be discussed apart.

Norway 8% bonds lately issued here, and advise

me regarding their safety? New Haven Bonds

A.—These bonds represent a loan of $20,000,3. Q.-I wish to avail myself of the service 000 repayable principal, premium and interest announced in the November issue of THE NEW in United States gold coin, without deduction SUCCESS, and ask for information about New for any Norwegian taxes present or future. They York, New Haven and Hartford 4% debenture are due October 1, 1940, but are subject to the bonds maturing April 1, 1922. These bonds are operation of a sinking fund of $1,000,000 anoffered at a price to yield 16% on the investment. nually, payable in quarterly installments, to be Do you consider them A-1 to hold to maturity? applied as follows:

A.—These bonds represent what was origin- Prior to August 1, 1930, to the purchase of ally a foreign loan made by the New Haven in bonds in the open market, if obtainable, at not 1907. They were first issued, we believe only more than 110. in francs and sterling, but shortly after the out- Commencing April 1, 1921, and semi-annually break of the war they were returned to the thereafter, to the redemption of bonds by lot United States market and converted into dollar at 107%2. bonds. The total issue amounts to approxi- This issue is callable in its entirety on any mately $28,000,000 par value, and the price at interest day at 110 from October 1st, 1925 to which the bonds were originally placed appears October 1, 1930 inclusive and at 107% from to have been 98

April 1, 1920 to maturity.

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As far as the records show no default has ever occurred on a Norwegian National Government loan. The thrifty character of the Norwegian people, their excellent record for meeting their obligations and the conservative financial policies of their government justifies the high credit standing of the nation and seem to us to entitle these bonds to a good investment rating.

Sinclair Consolidated Notes 5. Q.-Let me know if the five years 7% per cent convertible gold notes of the Sinclair Consolidated Oil Corporation are a safe investment?

A.- They are in our opinion. Their characteristics, and their status, are such, however, that we do not believe they can properly be recommended for all kinds of investment. They appear to be protected now by a wide margin of assets and earnings, but the nature of the enter-prise upon which they are based is such as to subject it to many hazards, which naturally reflect themselves in the company's securities. At the time of writing these notes are selling in the open market at about 91 to yield over 10 per cent to maturity.

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