Judge — August 21, 1926 — page 28: what you’re looking at

Machine-transcribed from the original scan — historical spelling and the odd misread are preserved.

Investment Bureau Subscribers to Jepce are entitled to answers to inquiries on financial questions, and in emer- gencies to answer by telegraph. No charge is made for this service. All communications are treated confidentially A stamped and addressed envelope should always be inclosed. Address all inquiries to the Financial Editor, JuvaE, 627 West 43d St., New York, giving full name and eract street address. A Time To Be Wary by Theodore Williams E our previous review of it, recessions in the securities market have at times foreboded reaction. The support given to standard issues, however, checked the relapsing tendency and even carried the average prices of leading stocks higher. The corrective of profit taking, and the absence of the public from the game, prevented any such broad, wild upward whirl as marked the earlier part of the year. Nevertheless, a somewhat perilous level was gained in some cases, and the need of caution in commitments was clearly evident. Speculation chances grew less favorable and in- vestment considerations became more urgent. The irregularities witnessed were plainly due to technical market con- SHORT TERM 8% BONDS Maturities—2 to 8 years; Security—First mortgages on new, in- come-producing buildings; first lien on income; monthly advance pay- ments on interest and principal col- lected from the borrower by trustee; Trustee: Trust Company of Florida, operating under state banking super- vision; Record: No loss to any investor since this business was founded in 1909. Free Booklet: Mailed on request. First Mortgage Bonds at 8% $100 Bonds, $500 Bonds, $1000 Bonds Partial Payments Arranged Mite wy ‘TRust CoMPANY or FLORIDA Paid-in Capital and Surplus +500.000 MIAMI, FLORIDA Anonymous communications will in no case be answered. ditions. Business progressed at an impressive rate for the midsummer season. In general it surpassed the dealings for the same period in 1925, and the outlook displayed no signs of a backward trend. So far as it was acting as a barometer of business, it was logical that the stock market should show strength and stability. Statistics indicated that the market was to a considerable extent baro- metric, but it was also seen that pool operations were being actively car- tied on. Transactions were largely in the hands of professionals, but shrewd investors did not fail to do some judicious buying. Admittedly stocks have been of late mostly strong hands.” A precipitous fall in values does not appear imminent. It need not oc- cur, for most holders are equal to a long pull. A few far-seeing financiers believe that the country will pros- per so abundantly during the re- mainder of the year that prices of securities are bound to advance above present figures. The influence of this belief may retard unloading of accumulated stocks until a more profitable stage has been reached. The frequent dullness of the market, too, has been assuring on this point. This is not a propitious time for dumping. That process can succeed only when there is a multitude of eager and climbing buyers. Until we have another orgy of speculation the market, though it will have ups and downs, is not likely to be a slaughterhouse for the distributors of overbought issues. There have been certain sessions of large trans- actions and feverish activity, indi- cating that the hour for setting dan- ger signals might not be far off. But it was a question whether the public was actually rushing in or whether it was only the big men plunging. In contrast with the see-sawings on the exchanges, the market for first mortgage real estate bonds has pursued an even, assuring course. 26 Answers to Inquiries U., New Onvzans, La.: The Brown Paper Mill Company's first mortgage sinking fund serial 6 per cent. bonds should be fairly attractive to resi- dents of Louisiana where the company conducts its business of manufacturing kraft paper. Pro- ceeds of this new issue of bonds will be used to retire outstanding indebtedness and provide funds for doubling the output. ‘The company has been successful and this $2,500,000 new off secured by property estimated worth 85,000,000. ‘The bonds were offered at prices to yield 6 to 6.2 per cent. according to maturity. Z., Baisrot, Cosy.: National Bi c is certainly selling higher than the present dividend of 84 warrants. But it is said for the company that its growth has been steady, that its business is stable and its income enlarges yearly. For the first half of this year the earnings on common stock were at the rate of $6.12 a year. Holders of the shares point to this as a sign of a coming increase in the dividend. But you can buy Inter- ional Paper preferred. paying 87, at about the same price as National Biscuit common, and have a bigger yield at once. A, Daxsory, Coxs.: New Haven Railroad stock has lately shown the good effects of better earnings. Last year $4.72 per share was earned and this year the outlook is for a larger revenue. The company is in a sound financial condition and the road's physical condition is the best for years. Dividend resumption is still but many redict that the road will ultimately regain its Former bigh rank among the money-making trans Pettation lines. | The stock is rather too specu- lative for one of moderate means. You can buy an excellent dividend payer for less than New Hayen's, quotation. E., Ente, Pa.: If prices on the exchanges should run up to new peaks for the year, and should we have a series of 2,500,000 or 3,000,000 share days, it would be logical to conclude that over- speculation is on once more, and that the part of shrewdness would be to close your commitments. If your holdings advance so as to give you a reasonable profit, it would be wise to take it. G., Oovensncnc, N. Y.: The recent bank- ruptey of a “silver fox farm” in the western part of the State must have escaped your notice. This collapse should be a sufficient warning to all who may be tempted to go into such enterprises. ‘They are simply lotteries without. prizes. Don't be persuaded by the plausible salesman to part with your limited savings. F., Wrvova, Mixs.: ‘The fakers in the oil regions are not all dead. Every little while their enticing prospectuses are finding their way through the mail. If you, will send all circulars. of the kind that you receive to, the Post Office Depart- ment, Washington, D. C., the Government may again interfere with the dishonest promoters. 0. Wistyctox, Det.: Although Standard Oil of New Jersey preferred is a sterling issue, its purchase at 8116 cannot be recommended. The stock is callable at $115, and it was recently an- nounced that the company contemplated its speedy retirement at that figure. It was officially denied that immediate action of this sort would occur, but it was hinted that the redemption of preferred was only a matter of time. It is clear that purchasing stock at a higher than its callable Price has its dangers. Q, Coxcorn, N. H.: A financial crisis in France can be averted only by unity and harmony of action on the part of the nation’s lawmakers, such as the new Poincare ministry set out to effect, with chances of success. There has been so much playing of politics in the parliament that pessimism Es to the fature has become widespread’ Uniess the public finances are soon established on a sound basis, the franc will go by the board completely, and French bonds may suffer a drastic decline. G., Toroxto, Ost.: Congoleum Nairm com- mon’s recent advance was due to improvement in earning ability and the coming of new and strong interests into the company. There is no likelihood of an immediate resumption of common dividends, but the outlook for that is growing brighter. C., Caxtox, 0.: Chandler-Cleveland — pfd. would not have dangled at a price well below 830 had the $4 dividend been fully assured. The stock is non-cumulative and that works against it some- It is, however, redeemable at more than imes its present price and that gives it attrac- a speculation, in case the company should go on prospering. H., Groncetows, D. C.: Middle States Oil's affairs are slowly improving under the receivership, certain claims against subsidiaries having been settled on favorable terms. It is not too late to fall in behind the stockholders’ protective com- mittee, and it seems to be to your interest to do so, urchase of 85,000 pany bonds, at nt., is to be a ompan: 54 communitie: Virginia, Pennsylvania, ‘Tennessee and bama, and has contracts to furnish electric light and power to 29 additional communities. Earn- ings of the company are 3!4 times the interest charges. St. Locts, Mo.: An investment. of 8 in New Orleans, Texas & Mexico Railw mortgage 5 per cent. zold bonds, series C, would be prudent. The company is controlled EEF comicbooks.com