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All legitimate questions from Outlook readers about investment securities will be answered either by personal letter or in these pages. The Outlook cannot, of course, undertake to guarantee against loss resulting from any specific investment. Therefore it will not advise the purchase of any specific security. But it will give to inquirers facts of record or information resulting from expert investigation, leaving the responsibility for final decision to the investor. And it will admit to its pages only those financial advertisements which after thorough expert scrutiny are believed to be worthy of confidence. All letters of inquiry regarding investment securities should be addressed to


Income Tax Primer
For the Individual Taxpayer


HE Internal Revenue Bureau has
prepared a list of more than

100 Questions and Answers
on the Income Tax Law

In this official educational treatise the law is
fully covered and its technical phases clarified.
For the convenience of individuals sub-
ject to tax, we have printed this information
in pamphlet form. A copy will be furnished
upon request for tax literature Z-66.

The National City Company

National City Bank Building

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New York

424 California Street
Hibernian Building

Railway Exchange Bldg.

Hoge Building

36 Bishopsgate





N The Outlook of December 12, answering inquiries from many readers as to the wisdom of purchasing standard railway shares, we gave a list of twelve such shares that could be purchased for $1,000 at the prices of December 1. It was pointed out that these shares would probably sell lower, but nevertheless were cheap and ought to appeal to the investor willing to take a considerable speculative risk. In commenting on the financial situation of the carriers, we said:

This great investment in rail transportation-a twelfth of our National wealth-is so large a part of the foundation of our National finance and National security that its safeguarding at a time like this becomes a matter of vital National concern. The Government by reason of its control of railway rates under the Act to Regulate Commerce, its control of railway labor under the decision of the Supreme Court in the Adamson Act case, its control of commodity prices under the emergency authority granted the President, and its control of the money market through the Treasury Department, holds the railways in the hollow of its hand.

Adequate inland transport is as necessary to-day as an army in the trenches; sound railway credit is the foundation of war finance. The Government has complete power to maintain both, and there is every reason to believe that it will maintain them.

If this reasoning is sound, then the securities of American railways, now selling at the lowest prices in many years, present an attractive opportunity to the investor who is willing to assume a considerable risk in the hope of making a considerable profit.

A fortnight later the Government, as a war measure, took over the operation of the railways of the country, and the President appointed as Director-General of Railways the Secretary of the Treasury, Mr. William Gibbs McAdoo. The President in his proclamation recommended that the Government guarantee to the carriers a net operating income equal to the average of the three years ended June 30, 1917. If Congress puts the President's plan into law, the apparent result will be to provide during the war the same rates of interest and dividends that the carriers were paying in 1917. It may be expected, therefore, that the standard railway shares listed in The Outlook will continue paying their regular dividends.

Because of uncertainty as to what terms the Government will propose in taking over the railways, their securities continued to decline during December, and on the day after Christmas they touched the lowest prices of the year. The President's proclamation was issued that evening, and on the following morning there was an extraordinary rise in the market. The twelve different shares that could be purchased at the beginning of December for $1,000 declined to $910 on December 26 and advanced to $1,031 following the announcement from Washington. At the closing prices of the year these twelve shares could be purchased for $1,015.

We give the list of companies, with the prices on December 1, December 26, and December 29:

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While it is too early to state definitely the final form of guarantee of earnings that Congress will approve, it may be assumed for the present that each company will be entitled to receive the average net operating income as outlined by the President. This is very similar to the plan followed in England from the beginning of the war.

But investors who now purchase railway securities on the strength of the proposed Government guarantee must take into consideration the earning power of these companies after the war. It may be that the temporary war measure will become a permanent method of controlling the railways. If the Government does retain permanent control of the railways, then the question naturally arises as to what will be the afterwar bargain with the security-holders. It might be better or worse than the proposed war guarantee. This investors must bear in mind.

But if after the war the Government turns these properties back to their owners to be operated under pre-war conditions, what will be the earning power of the individual companies and what will be the market worth of their securities? In these columns we have more than once expressed the opinion that the Government, through its great power of regulation, will see to it that railway property and railway credit. are maintained in the future. But there are some uncertainties that investors must take account of.

The most perplexing problem, in our opinion, is that of labor. The carriers are taken over by the Government with a staff of more than 1,600,000 employees. On the trains there are 300,000 engineers, firemen, conductors, and trainmen-represented by the four railway Brotherhoods. In addition there are 1,300,000 other employeesdespatchers, telegraphers, machinists, carpenters, accountants, clerks, track work

ers, etc.

The 300,000 trainmen in 1917 received by Act of Congress an increase in wages amounting to about $60,000,000 a year. Toward the end of the year they presented demands for further increases in wages amounting to approximately forty per cent. One of the first problems before the Director-General of Railways is the settlement of the Brotherhood demands. The present pay-roll of the trainmen is about $450,000,000 a year, or an average of $1,500.

What, then, would happen to the 1,300,000 other employees? Their pay-roll now is $1,500,000,000 a year, or an average of $800. It would seem that these less well paid employees are in greater need of an advance in wages to meet the high cost of living than the well-paid trainmen. If the fifteen per cent bonus were granted the trainmen, it is plain that there would be an urgent demand from the other employees for a similar advance. This would raise their average from $800 to $920, and would increase their total pay-roll by nearly $160,000,000.

If the Government gives the railway workers a war bonus of as much as fifteen per cent, the pay-roll will be increased by upwards of $225,000,000 for the period of the war. With Government guarantees of net earnings, such a large increase in the labor cost would have to be met in considerable measure out of the Government Treasury. That this is not without precedent is seen by the English experience. Since England took over her railways there have been three


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First Mortgage Investment

To Net 64%

Abundant Security and Assured Earnings

Proceeds of bonds will complete improvements increasing materially the output of COALa natural resource of vital and timely importance. Value of security over four times amount of issue. Contracts provide satisfactory fixed percentage of profit over all costs, and assure monthly deposit of onetwelfth annual principal and interest, regardless of mine operations. $500 and $1,000 bonds, maturing in 2 to 15 years.

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Government Control and Railway Finance

successive war bonuses given to the railway
workers, amounting to 15 shillings a week
for each man. This is equivalent to about
$190 a year. The same bonus for Ameri-
can railway workers would aggregate

During the war the bonus to the English
railway men is being paid by the Govern-
ment, because the earnings of the companies
are insufficient to meet this burden. If
American railway workers receive a war
bonus, the same method of meeting the cost
would be followed here under the Govern-
ment guarantee.

But what would happen after the war if these companies were turned back to their owners? If freight and passenger rates are not raised by the Government to take care of increased labor costs, the carriers after the war would find themselves burdened with very high operating costs and rates inadequate to meet them. A $300,000,000 increase in cost of labor would be equivalent to the total amount now paid in dividends by all American railways. It must be plain, therefore, that if the new DirectorGeneral of Railways does not provide for higher operating costs during the war by raising railway rates, the carriers after the war will find themselves in a very precarious condition, unless, as many experts believe it will, the present Government operation of railways becomes permanent.

It might be argued that large advances in wages given as a war bonus to meet the high cost of living could be taken away after the war when living costs came down again. But any one who has studied the recent history of railway labor can realize what a difficult problem the carriers would have to face if they attempted after the war to reduce wages to a pre-war basis.

The after-war values of railway shares, therefore, are in the melting-pot. The only assurance investors have is the confidence that the Government-whether it takes over the railways permanently or turns them back to their shareholders-will deal fairly with the owners and maintain railway credit as a matter of National safety.

A-G-Danforth & Co railway credit as


Founded A.D. 1858


Odd Lots and Your
Financial Future

The thousands of thrifty Americans all over the country whose steady purchasing of Odd Lots of investment issues attracted attention during periods of depression have been proven wise by the course of events.

The man or woman who invests in timetested income producing securities at our rent prices can still obtain a return upon his money which will permit him to regard comparatively small price fluctuations with equanimity.

Odd Lots of time-tested issues offer the best medium for investment in the future of the United States.

Send for Circular M-48 "Partial Payment Suggestions."

John Muir & Co.


Odd Lots

Main Office, 61 Broadway, N. Y.

New York, N. Y.

Newark, N. J.

Brooklyn, N. Y.
Bridgeport, Conn.

New Haven, Conn.

Members N. Y. Stook Exchange

Some politicians and publicists believe that any large increases in the cost of labor and material under Government operation during the war will be absorbed by the operating economies that will result from unified management. But no assurance for this can be found in the history of govern ment control of railways in foreign countries. The universal experience has been that government control is not as economical as it is in the best privately managed railways. But the additional expense of Government railways, which would be met by taxation, may be justified by the wider and more uniform service rendered the public.

The big item in railway operation is labor. Nearly two-thirds of the cost of operation is the pay-roll, and Government operation of public utilities here and abroad almost invariably increases the labor cost. When the wages of 1,600,000 workers are fixed by a single Government authority, it is plain that the political management of both the employees and the finances of the railways must be of the highest character. Political and partisan bureaucracy must not be tolerated. Investors, in forming their judgment of the present value of railway securities, must bear this in mind, and must for their own protection, if for no higher motive, do their share in insisting upon clean and efficient political administration.

First Mortgage

9 January

Real Estate Serial Notes

offer what the successful investor always de-
mands ample security and good retors
These notes are secured by first mortgages an
improved property, the ground value slune
frequently having a value greater than the
total of the loan. After careful inspection aud
investigation by our experts, we buy the exte
issue of notes-in other words, back on
judgment with our own money.

Banks and other careful investors throughout
the country have found these notes attractive
because the original notes are delivered t
them. The genuineness of each note is conditiet
by us, thus preventing forgery or over-jane.
Our profit is the commission we charge the

This plan enables you to invest $500 or multiples thereof; to choose maturities and diversity your investments. Interest 5%-5% and 6%

Write for our current investment list No. 104

Mercantile Trust Company
Capital and Surplus $9,500,000

Saint Louis
Member Federal Reserve Bank

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Free Booklets for Investors

Many of the investment bankers publish booklets and literature for the information of prospective investors. The following is a list of booklets which may be obtained by writing to the investment houses issuing them, mentioning The Outlook, or by writing direct to the Financial Editor of The Outlook:

"Bond Topics"-Issue No. 0-200. A. H. Bickmore & Co., 111 Broadway, New York.

The Kansas Oil Fields. A. D. Converse & Co., 5 Nassau St., New York.

Danforth Farm Mortgages-List No. 58. A. G. Danforth & Co., Washington, Ill.

"A Buyer's Guide to Good Investment." Federal Bond & Mortgage Co., 90 L Griswold St., Detroit, Mich.

Wisconsin Dairy Farm Mortgages-Booklet 12. Markham & May Company, Milwaukee, Wis.

First Mortgage Real Estate Serial Notes. Investment List No. 104. Mercantile Trust Company, Saint Louis,

"Partial Payment Suggestions"-Circular M-48. John Muir & Co., 61 Broadway, New York.

Income Tax Primer, AB-2000. National City Company, National City Bank Building, New York.

First Mortgage Real Estate Bonds-Circular No. 9987. Peabody, Houghteling & Co., 10 South La Salle St., Chicago, Ill.




The boll-weevil, as a blessing in disguise, has redeemed the South from the disgrace of being a one-crop country. Cotton is no longer autocrat. He has been dethroned by the weevil, and must now take his place as merely one of a democracy, or perhaps an oligarchy, of crops, among which the once humble peanut is rising to unwonted prominence.

In 1908 we raised twelve million dollars' worth of peanuts. A conservative valuation of this year's crop is sixty million dollars. Texas alone has two hundred thousand acres. What is to be done with all these millions of bushels? Surely they are not all to be sold on the street corners to our boys for five cents a bag! By no means. In the first place, the product is of high food value-higher even than wheat. The oil is a better lard substitute than cottonseed oil. It brings a higher price per gallon, and can be made in the very same mills by the same machinery that used to turn out cottonseed oil.

And who would ever think of a peanut in connection with our munition plants? They seem as far apart as the North and South Poles. Yet the peanut, in the shape of

Are You An

During the past year
the Financial Editor
of The Outlook has
helped hundreds
Outlook readers intel-
ligently to solve their
particular investment
problems. Perhaps you
are contemplating a
shifting of your pres-
ent holdings or have
fresh funds to invest.
In either case we shall
be glad to give you
specific information
on any securities


you may may be interested. This service is entirely free to Outlook readers.

The Outlook Financial Department

nitroglycerine, may sleep in the submarine torpedo which is to destroy a great battleship, or it may send a half-ton projectile flying forth from the mouth of a gun.

We now find that the meal mixed with white flour makes a palatable and highly nutritious bread, and that it may be used for crackers and cakes. Peanut butter can take the place of cow's butter; and peanut meal, which is a by-product of the oil, makes the best of stock food.

In addition to the direct profits, the peanuts leave the land better off than when they were planted. For, like many of their cousins in the bean family, they gather and deposit nitrogen in the soil.

In 1914 the United States imported 44,549,789 pounds of peanuts and 1,332,108 gallons of peanut oil from Marseilles, Delft, Hamburg, and other ports. The nuts brought $1,899,237, and the oil, which was valued at $915,939, went mostly into the manufacture of butterine and other lard substitutes.

On the strength of these things the mill men experimented with peanuts. The results were so successful that the acreage in Texas increased more than 1,000 per cent from 1915 to 1916. In that State the peanuts and cotton, acre for acre, as far as the value of the crops is concerned, are now running neck and neck, with the chances in favor of

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the peanut. The experimenters are raising the latter on the demonstration farms and are producing better results every season.

So surprising has been the success of the experiments that the planters have begun to look for the dark side of the silver lining. The price of peanut products has gone up with all its companion foodstuffs. Will it come crashing down at the end of the war? How much danger is there from over-production?

According to one of our peanut experts, there is little danger of surfeiting the world with peanut oil and cake, because the food value is such that there is a universal market for them. The South abounds

in sandy soil that will produce little cotton or grain. If the peanut could submit specifications, it would ask for just such soil. Vast tracts where pine forests have stood may be made useful and valuable by planting them with peanuts. The cottonseed mills have a capacity far beyond the available supply of their raw material, and have therefore lain with cold furnaces for a large part of the year. But now that the machinery of these mills, with slight adjustments that cost very little, can be turned into peanut-oil plants as they stand, they will naturally welcome a new industry that will extend figures on the credit side of the ledger.

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2 x 2 yds, $4.00, 4.50, 5.25 to 16.00.
2 x 22 yds, $5.00, 5.85, 6.50 to 19.00.
2 x 3 yds, $7.25, 7.75, 8.00 to 23.00.
2 x 4 yds, $10.00, 13.50, 14.00 to 32.00.
24 x 24 yds, $5.25, 7.25, 7.50 to 20.50.
22 x 22 yds, $6.75, 7.75, 8.00 to 30.00.
22 x 3 yds, $9.75, 10.00, 11.50 to 37.00.

2 x 4 yds, $14.00, 17.00, 19.00 to 49.50.

Lot No. II. Twenty good designs in fine handmade Irish Damask at a saving of more than 25% from our regular prices, which are considerably below today's market values.

Napkins-$8.25, 10.00, 11.25 to 36.00 per dozen.

Table Cloths

2 x 2 yds, $6.50, 7.50, 7.75 to 15.00.
2 x 22 yds, $9.25, 10.25 to 19.00.

2 x 3 yds, $12.50, 12.75 to 23.00.

24 x 24 yds, $9.75, 11.50 to 14.50.
212 x 212 yds, $12.00, 12.25 to 30.00.
22 x 3 yds, $14.50, 15.75 to 37.00.
2 x 4 yds, $20.75, 28.75, 31.50.

All our regular stock of over five hundred designs at prices much below the current market prices.

Orders by mail given special attention.

James McCutcheon & Company

Fifth Avenue, 34th and 33d Sts., N. Y.

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During a recent visit at a district court in New York the writer counted five applicants rejected within a short period, due to their complete ignorance of the simple information required of an applicant for citizenship in this country.

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The judge, in a most sympathetic manner, asked questions in each case that should have been answered by any schoolchild who had studied even the rudiments of geography and civics. One intelligentlooking man, well dressed, and apparently the right kind to be welcomed in this country, was unable to state what body makes the laws for the Nation. He must have startled the judge, as he did the bystanders, when he admitted he did not know anything of the present conflict in Europe and was not at all interested in the outcome. His native country is fighting for its life on the side of the Allies.

Another, accompanied by a man who may have been a parasite lawyer who for a fee of some sort had guaranteed a free passage through the courts, failed miserably on his mental test, but, owing to the kindness of the Court, was given a second opportunity, this time showing an even more complete lack of necessary knowledge. This man looked in vain to his companion, who finally gave up his appeals to the Court and took his client away. It did not require a keen observation to see that the reject was utterly downcast, probably unable to tell just why he was not admitted. He had an ardent desire to become a citizen, whatever were his motives. He had obtained advice in the wrong place. He may possibly have paid a fee that was to guarantee the rest. He gave up, dejected, and walked out of the court, possibly adding one more to the mass of malcontents, Anarchists, and others with grudges against the country. To the onlooker, however, it seemed that the kindly words of the judge should have encouraged him to make another effort at the proper time, and after proper and necessary study.


In the field of business we are seeing patriotic and successful effort being made by large and small companies and corporations to put into the minds of their employees the idea, the intention, to become citizens of this Republic.

The employers profited by assuring themselves of more contented help, and have made a distinct contribution to the country, not only in the citizens added, but in the attempt to introduce into the voting population a body of men who have been encouraged to think for themselves and to have sufficient regard for their new privilege to make an effort, at least, to avoid the evil of group voting and other sacrifices of that privilege.

The Y. M. C. A., by establishment of

evening courses, is co-operating in New

York with the work done by the Mayor's Committee on Naturalization, by the evening schools in New York and elsewhere. The various Chambers of Commerce in larger cities are establishing schools and


The schools are doing their work. Where can the parent, foreign-born, more readily and agreeably obtain the fundamental knowledge of our institutions than from his child, provided the knowledge has been imparted to the child in the school? Re

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