ALEXANDER HAMILTON was the first Secretary of the Treasury of the United States, serving under President Washington, and one of the greatest of those who have held that high office. He performed many important services for his country, but the most outstanding was his reorganization of federal finance, laying a solid foundation for the future credit and wealth of this nation. What he stood for in public finance can well be emulated by all who desire to build for themselves a financial future. The safest way is to lay a solid foundation of habitual investment in good bonds N ENGLAND men are appraised according to their incomes rather than their wealth. A man is said to be worth "a thousand a year," rather than the principal which yields that income. There is sound logic in that idea. As an investment, property, in the long run, is worth the income it yields. Building up future income-providing oneself a pension, as it were-makes systematic bond investment fascinating. The fund multiplies, and with it the income. A Powerful Incentive Bond buying affords a definite incentive to get ahead. If well selected, bonds are safe. The interest is regular. The owner knows exactly what he can count on, and when. He knows that each $1,000 six per cent bond laid away, starts adding $60 a year permanently to his earnings. After retirement this bond income may become his sole means of support; eventually it passes to his dependents. A Resourceful House The house of Halsey, Stuart & Co. has built up a very extensive clientele of investors, large, small and moderate sized, who have formed the babit of bond investment. These men and women are not merely accumulating property. They are building up an income-assured, definite, permanent, over and above any active earning power of their own. In dealing with this house, investors can select from a wide variety of conservative issues to safeguard and diversify their holdings. It has the character of bonds best suited to an investment fund and it has the practical facilities for helping anybody build up financial independence over any period of years. Our booklet, "A SURE ROAD TO FINANCIAL INDEPENDENCE," deals in a practical way with the interesting HALSEY, STUART & CO. (Financial Situation, continued from page 73) ordinary trade exchanges and partly through the German government's $200,000,000 external loan of October, $110,000,000 of which was placed in the United States. These credits were redeemable in gold. Last November the Reichsbank began to ship the proceeds to Berlin, for use in a home reserve against the new German currency. It had taken $20,000,000 before the year was over; this happening while New York exchange on Germany, measured in the new reichsmark, was nominally at par with gold but not at the technical "gold export point," and when a very large "import surplus" existed in German foreign trade. UT the Reichsbank was not the only foreign bank of issue with a gold credit at New York or elsewhere. The national banks of Sweden, Norway, Finland, Latvia, Lithuania, Poland, Austria, Serbia, and Czechoslovakia, The facts-secured in time Our Gold and the Rest of Europe all report in their statements of the reserve In other words, the machinery for "gold redistribution" is in perfectly plain sight, as it was when the United States government, with sterling exchange well above the "gold import point," imported upward of $25,000,000 gold from Europe in 1877 and 1878 to prepare for resumption of specie payments. secured in time—often save losses in investments Every investor at times needs reliable, unbiassed information regarding securities. In recognition of this fact, Scribner's BACKED BY AMERICAN HOMES Insured Mortgage Bonds are not only the ideal form of security for individual investors, they are much more-they represent A SERVICE IN HOME OWNERSHIP. Insured Mortgage Bonds are the last word in the construction of a type of Bond which 1.-Guaranteed principal and interest by the Mortgage Security Corporation of America. Insured Mortgage Bonds are distributed to investors only through responsible investment to whom orders for Bonds as well as inquiries for our Booklet, "Insured Mortgage Bonds, A National Security" should be addressed. Service Bureau Excerpts from Questions and Answers Upon request this Bureau of Scribner's Magazine, which is maintained for the service of subscribers, will furnish information concerning investments. AUSTRIAN BONDS Q. Will you be good enough to give me information about the following Austrian Bonds issued in crowns: Vienna Water Power 5% (American issue), the Austrian Federal 6%, Vienna Loan 5% and 7%, and shares of the British-Austrian Bank Limited. A. We are in receipt of your good letter of the 12th, addressed to our Investor's Service Bureau, requesting information regarding the following Austrian Bond issues: Vienna Water Power 5% First Mortgage Bonds (American issue.) Austrian Government 6% 6-Year Notes. Austrian Government 6% Guaranteed Sterling. Information regarding the Vienna 7% issue is not available as we write. We shall endeavor to obtain information regarding this loan and will advise you later. Of the bonds above-mentioned, we would rank them in safety as follows: I. 2. 3. Austrian Government 6% Guaranteed Sterling. Vienna Water Power 5% First Mortgage Bonds. 4. Austrian Government 6-Year 6% Notes. We are enclosing with this letter information regarding these issues. Vienna Water Power Company 5% First Mortgage Bonds. Authorized and issued: Kr. 6,000,000. Present issue: Kr. 1,000,000,000 in denominations of Kr. 250,000. The proceeds of this loan will be used to continue the construction of the hydro-electric power works and storage plants on the River Ybbs, an affluent of the Danube. The development of this great natural resource will automatically free Vienna from dependence upon a large portion of its coal and oil imports, provide its industry and household consumers with cheap and effective power and light, and will be a further step toward the resumption of sound economic conditions of this great city. Maturing coupons can be presented for payment within six years from date of maturity; maturing certificates within thirty years from date of maturity. The bonds are secured by a first lien on all the assets of the Company, including its land and buildings at the Ybbsworks. Apart from this, however, the entire resources of the Municipality of Vienna are pledged as security for the loan. Principal and interest are free from all present and future Austrian taxes. Austrian Government Six-Year 6% Notes, 1921-1927. Dated January 1, 1921. Due January 1, 1927. Coupon bonds of Kr. 10,000, 50,000, and 100,000. Repayable at par January 1, 1927, but holders have the right to demand repayment at par on the first of any month, upon giving three months' notice. Repayment upon such demand after January 1, 1922, entitles the holder to a premium of one-tenth of one per cent of the face amount of his bonds for every three months elapsed since date of issue. All payments in kronen at Vienna, free of all taxes. 76 Vienna 5% Loan of 1921. Issued and outstanding-1,000,000,000 kronen. Dated March 1, 1921. Due March 1, 1981. Interest March 1 and September 1. Not redeemable for ten years from date of issue. Repayable by annual drawings on March 1 of each year, beginning March 1, 1931, for payment six months later. Drawings may be increased at option of the city. Principal and interest exempt from stamp tax and municipal taxes, and the city of Vienna agrees to pay the Austrian Government tax "Rentensteuer" present and future. Denominations 1,000, 2,000, 5,000, and 10,000 kronen. The bonds are printed in English, French, and German. Direct obligation of the city of Vienna, and issued under Resolution of January 18, 1921. Offered for subscription in Austria at 96%. A portion of this issue offered in the United States in July and August, 1921, by Morton Lachenbruch & Co., New York, and others at $16.50 per 10,000 kronen bond. Austrian Government 6% Guaranteed Sterling Bonds Issue of 14,000,000 kronen. Bonds to the nominal value of 3,118,900 kronen are being issued to H. M. Government in satisfaction of sums due to them. Payment of principal and interest of this loan is a direct obligation of the Republic of Austria, secured by 1. A general bond of the government. Chairman of financial committee, League of Nations, appointed Trustee to be succeeded later by three trustees nominated by council of League. 2. A first charge on gross receipts of customs duties and tobacco monopoly of Austrian State. Q. I would appreciate your advice in regard to some bonds that are causing me a good deal of uneasiness-Rio de Janeiro 8s of 1947 for which I paid 103-would you advise holding this bond or switching into some other bond with better prospects and higher rating. Would my position be any stronger if I changed into the Department of the Seine 75, 1942-that is would I have more safety for my capital? Or can you advise any better switch? I also have Sinclair Consolidated Oil 75, 1937, for which I paid 981⁄2, and ten shares of Sinclair Stock for which I paid 31. Other oils seem to be starting up but Sinclair is getting worse —would rather lose a little than all my principal. Do you advise the purchase of securities at this time or do you think funds should be kept liquid? A. We are in receipt of your letter of recent date, re In writing to advertisers please mention SCRIBNER'S MAGAZINE now holding. The Rio de Janeiro 8s of 1947 sold on June 30 at 97%. This is the highest price at which the bonds have sold during 1924-the lowest price being 87 recorded on January 2. We believe the bonds are intrinsically sound, and while we favor such bonds as Kingdom of Denmark 8s, Republic of Uruguay 8s, or Kingdom of Norway 8s, we do not believe that the added factor of safety would compensate you for the loss of principal entailed in switching from one to the other. We do not regard the Department of the Seine 7s of 1942 as possessing superior safety to the Rio 8s. It is possible that the late developments in European affairs may have a good sentimental effect on the French Government and state issues, but this is purely a speculative feature. You also ask our opinion regarding Sinclair Consolidated Oil 7s of 1937 and Sinclair stock. The entire list of oil stocks has been comparatively sluggish during the past month, in a tremendously active market. Some financial authorities do not look for sensational advances among the oils, but rather advances in line with the gradual improvement that is developing in the oil industry. For the year ended December 31, 1923, the Sinclair Consolidated Oil Company showed net earnings of $13,436,504. After the payment of taxes, fixed charges, interest, depreciation, and dividends, the Company showed a deficit of $11,831,220 for the year. The first six months of 1924, ending June 30, show the company's earnings to be running far ahead of 1923, and the outlook for the Company is much more encouraging. If you wish to change your Sinclair holdings to some other oil issue, we suggest one of the following: Vacuum Oil Company. Tidewater Oil Company. Shell Union Oil Corp. Pacific Oil Company. The present is probably as good a time as any to buy oil stocks in anticipation of a gradual betterment. No immediate boom is anticipated and the industry requires considerable readjustment before one can occur, but we believe that a decided turn for the better is due. The majority of the active stocks have had a steady and well-sustained rise for more than a month, and it is possible that there will be some recessions from the high figures. As we have said in the above paragraphs, we believe that good oil stocks-which have not shown any noticeable advances offer as good an opportunity as any for a long pull investment. DIVERSIFIED INVESTMENTS Q. Will you give your opinion of the securities listed below and held for permanent investment? Also suggestions for adding about $3,000 to this group. I am considering several preferred stocks such as Jones & Laughlin, U. S. Steel, Railway Steel Spring, American Tobacco, National Lead Company. I am putting aside about $275 monthly for investment. You may think this group would stand some good common stock for a high yield. The money on hand is drawing 32%, computed monthly, in a savings-bank. Progressive Men of Affairs are now planning to have their CHARLES SCRIBNER'S SONS 10 Shares New York Telephone Pref... (Continued on page 78) In writing to advertisers please mention SCRIBNER'S MAGAZINE 77 investor who holds GUARANTEED STOCKS Intrinsic Value. As a stockholder he is an owner of a property whose recognized worth protects his investment. Strategic Value. His property having been leased to a larger company, dividends on its stock were assumed as a fixed charge because it was of particular value to the guarantor. It may provide terminals or access thereto, or be an essential link in a great trunk system. The Credit of the Guarantor. The dividends on these stocks are guaranteed under the terms of leases and are fixed obligations of the guarantors as is the interest on their own bonds. A. We are in receipt of your valued favor of recent date, in which you enclose a tabulation of your bond and stock investments. You ask us several questions regarding your present list and your contemplated investments, which we have endeavored to answer in the following paragraphs. Your railroad list is excellent. The earnings of the Great Northern System are not showing up as well during the current year as they did last year. Latest reports, however, indicate that the October net will be in the neighborhood of $5,000,000. Owing to the improvement in the outlook the net for 1924 should be nearly equal to that of 1923, or at the rate of 7.25 % per share on the capital stock. Your utility bonds are good and at the prices purchased they yield you an excellent return. We would not disturb this list. Of the industrials, the U. S. Rubber bonds we believe may be held with perfect safety. For the first six months of 1924 this Company's net income was $7,510,415. Interest requirements for the same period were $3,987,928, indicating that the Company should earn a substantial margin in excess of all requirements. Your entire list of bonds and stocks has been very well selected and the issues are well diversified. The average yield is excellent. We do not regard the present as a good time to buy securities. Prices have risen sharply and it might be well for you to allow your funds to accumulate in a savings-bank a few months for a possible recession of prices. As we review conditions, there is nothing in the immediate future, however, to cause any marked recession. Of the preferred stocks listed in your letter as possible purchases, we would list them as follows in the order of pref Cluett, Peabody & Company. Endicott-Johnson Corp. Baldwin Locomotive Works. These preferred stocks have been selected as offering good investment opportunities, taking into consideration earnings, financial conditions, and assets. 72% 8% 72% FIRST MORTGAGE BONDS We furnish these Mortgages in denominations of $500 to $10,000, secured by Real Estate in Miami, Orlando, Jacksonville, and other Florida cities, paying 7% and 8% interest. Collection of interest and all services rendered without charge. These Mortgages run for a term of five years, without right of redemption. Write for information THE TITLE GUARANTY & TRUST CO. First National Bank Building BRIDGEPORT, CONN. Northern Representative In writing to advertisers please mention SCRIBNER'S MAGAZINE |