Show THIRD QUARTER INCOME LARGE 4 O Millions l in Dividends Divi en s sto to Be Reinvested This Autumn Br Dr tROll BYRON SELLER S S-celal Correspondent C of The Standard Copyright 1927 Consolidated Press Association NEW YORK Oct c 1 Today's Today's in- in interest Od ft I 1 terest te and n dividend disbursements ls are If- If the largest on record for the third quarter The two most Important paying dates are arc July 1 and January I 1 Next to these t tese two rank April 1 and October 1 It is striking testimony to the widespread prosperity that this year for the first time October bond coupons paid anti and October dividend checks mailed m led will approximate Of this huge sum um by fat f fa the larger part is interest or bonds Attention has been so centered on the perform perform- performances performances performances ances of the stock market that the average f Investor is likely to forget the predominant role that bonds take In Inthe Inthe Inthe the Investment world Roughly the proportion stockholders receive today toda is La 1 hUe bile bond holders will wUl get WONT AVONT BK DE IDLE Now this money so disbursed be reinvested It will not long be hI beidle beIdle idle The question is how this rein rein- reinvestment reinvestment vestment estment shall be apportioned Pre Pre- Presumably Presumably the division will bs ba b made ac according ac- ac according according cording to the relative attractiveness of the two markets that markets that for bonds and that for stocks Doth Both these markets are at the highs In its a 0 decade dee de or measured by the av averages lV- lV at nt the highest for all time Whether or not the bond market is absolutely at its peak or whether the stock is at an on unprecedented level is unimportant Doth Both arc are very high and investors are confronted with a a. difficult cult problem No olo one wants to buy stocks for fer permanent holding if a year ear or two hence he will wUl find him him- himself self sell faced with a a. serious capital loss No one wants to buy stocks when there is ts any doubt about the perma perma- permanency permanency nency of present dividend rates On the other hand no one wants to take bonds if it thereby he ha sacrifices Income without gaining corresponding safety One other factor enters in The stock stock- stockholder stockholder stockholder holder with an equity in the business has a chance of gain as well ell as loss both in larger degree than the bonO bond bondholder holder who is a creditor only Tha consideration is the determining one with many man investors I Now let us make some comparisons on on the basis of this weeks week's quotations United States Steel at nt yields 47 per cent United States Steel sinking fund at yield 4 45 5 per cent Allied Chemical at yields 38 per percent cent General Electric debenture 31 S yield 41 per cent New York Central Cen ral at yields per cent American Smelting Refining at yields 48 per cent As far as return goes the advantage Is at al with taking the bonds at least in these Instances However a better showing can be made with other stocks Eastman E Kodak at yields per cent AtchIson general ts at nt 96 yield per cent Atchison stock at yields per cent Reading General at yielded per cent Any Anyone one can multiply these com corn comparisons comparisons at his con convenience and while lIe he will find high-grade high stocks which still give gJ better than 5 per cent they will wUl be practically all railroad shares and the margin of advantage over oter corresponding bonds will 1111 not be great In other words worth there Is little reason for an investor who is concerned about his normal Income more than about increasing his capital taking stock instead of bonds Leaving the Industrials out of con con- consideration consideration for the moment the pur pur- purchaser purchaser purchaser chaser of railroad shares for invest invest- investment investment Investment ment has something to take into ac account ac- ac account account count besides Ides yield The year 1926 was the Ute most prosperous in any re recent re- re recent recent cent history of the carriers This year has fallen tallen much behind Prices of railroad stocks are arc higher but aggregate net income is 15 not Second Second- Secondly SecondI ly 13 I the railroads have had a long period of freedom from political at nt- nt tack The transportation act has worked out all to their advantage There is no assurance that this happy state of affairs will continue indefinitely IndefinItely and if it does docs not railroad stocks will lose some of their present high Investment status stains More or less these same ume possibilities affect bonds but not v to any such extent The Investor who favors ors Industrial tocks Stocks is not without his perplexities either cither Take the steel trade for ex ex- ex ample Productive capacity is in ex excess ex- ex excess cess of domestic demand and foreign competition for outside market is In in- in intense tense For that matter competition at home is sex severe ere in many lines one of which is the motor car A better be tte L' L case can be made out for the public utilities but going back to the matter of yields it will be found that utility stocks tocks f give the tile smallest return of or any anyone one group croup entitled to invest Invest- investment Investment ment consideration The conclusion Is that not at any time jime since the world war has the stock market so narrowed the differences between it and the bond market as asat asat asat at the present time It must be admitted ad ad- that the average individual in- in InI I l estor does docs not seem to hate h accepted Lf y this so far tar lie He 1 Is still enamored of or stocks and leaves the bonds to financial institutions but the time tune is fast approaching when he will take another and vl and l-and and in investment as n In speculation is Generally wise to toa be a little in advance ance of the crowd |