FINANCIAL DEPARTMENT

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

THE OUTLOOK FINANCIAL DEPARTMENT, 381 Fourth Avenue, New York

Income Tax Primer
For the Individual Taxpayer

Bureau has
THI

HE Internal Revenue
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 literature Z-66.
The National City Company
National City Bank Building New York

tax

BOSTO, MASS,

10 State Street
ALBANY, NY.

Ten Eyck Building
BUFFAIA, N. Y.

Marine Bauk Building
CLEVELAND, Omo

Guardian Building
PITTSBURGH, PA.

Farmers Bank Building
DETROIT, MICH

Dime Bank Building
Bonds

CORRESPONDENT OFFICES
PHILADELPHIA, PA,

CHICAGO, ILL.
1421 Chestnut Street

137 So. La Salle Street
WILKES-BARRE, PA.

St. Louis, Mo.
Miners Bank Building

Bai of Commerce Bldg.
BALTIMORE, MD.

Kangas City, Mo.
Munsey Building

Republic Building
WASHINGTON, D. C.

MINNEAPOLIS, MINN.
741 15th Street, X. W.

Mcknight Building
ATLANTA, GA.

DENVER, ('oro.
Trust Co. of Ga. Building

First National Bank Bldg.
NEW ORLEANS, LA.
3113 Baronne Street

Short Term Notes

SAN FRANCISCO, CAL.

424 California Street
Los ANGELES, CAL.

Hibernian Building
PORTLAND, ORE.

Railway Exchange Bldg.
SEATTLE, WASH.

Hoge Building
LONDOX. E. C. 2 Exs.

34 Bishopsgate

Acceptances

71

ESTABLISHED 1865 :||

First Mortgage

Investment
To Net 6%%

Abundant Security and

Assured Earnings

GOVERNMENT CONTROL AND RAILWAY FINANCE
-N The Outlook of December 12, an-

While it is too early to state definitely swering inquiries from many readers as

the final form of guarantee of earnings that to the wisdom of purchasing standard Congress will approve, it may be assumed railway shares, we gave a list of twelve

for the present that each company

will be such shares that could be purchased for entitled to receive the

average net operat$1,000 at the prices of December 1. It ing income as outlined by the President. was pointed out that these shares would

This is very similar to the plan followed in probably sell lower, but nevertheless were

England from the beginning of the war. cheap and ought to appeal to the investor

But investors who now purchase railway willing to take a considerable speculative

securities on the strength of the proposed risk. In commenting on the financial situa

Government guarantee must take into contion of the carriers, we said :

sideration the earning power

of these com

panies after the war. It may be that the This great investment in rail transportation-a twelfth of our National wealth-is so large a part temporary war measure will become a perof the foundation of our National finance and Na

manent method of controlling the railways. tional security that its safeguarding at a time like

If the Government does retain permanent this becomes a matter of vital National concern, control of the railways, then the question The Government by reason of its control of railway

naturally arises as to what will be the afterrates under the Act to Regulate Commerce, its

war bargain with the security-holders. It control of railway labor under the decision of the

might be better or worse than the proposed Supreme Court in the Adamson Act case, its con

war guarantee. This investors must bear trol of commodity prices under the emergency au

in mind. thority granted the President, and its control of the money market through the Treasury Department, But if after the war the Government holds the railways in the hollow of its hand.

turns these properties back to their owners Adequate inland transport is as necessary to-day to be operated under pre-war conditions, as an army in the trenches; sound railway credit is

what will be the earning power of the the foundation of war finance. The Government

individual companies and what will be the has complete power to maintain both, and there is

market worth of their securities? In these every reason to believe that it will maintain them.

columns we have more than once expressed If this reasoning is sound, then the securities of

the opinion that the Government, through Annerican railways, now selling at the lowest prices in many years, present an attractive opportunity to its great power of regulation, will see to it the investor who is willing to assume a considerable that railway property and railway credit risk in the hope of making a considerable profit. are maintained in the future. But there A fortnight later the Government, as a

are some uncertainties that investors must war measure, took over the operation of the take account of. railways of the country, and the President The most perplexing problem, in our appointed as Director-General of Railways opinion, is that of labor. The carriers are the Secretary of the Treasury, Mr. William taken over by the Government with a staff Gibbs McAdoo. The President in his

proc of more than 1,600,000 employees. On the lamation recommended that the Govern trains there are 300,000 engineers, firemen, ment guarantee to the carriers a net oper conductors, and trainmen-represented by ating income equal to the average of the the four railway Brotherhoods. In addithree years ended June 30, 1917. If Con tion there are 1,300,000 other employeesgress puts the President's plan into law, the despatchers, telegraphers, machinists, carapparent result will be to provide during penters, accountants, clerks, track workthe war the same rates of interest and divi

ers, etc. dends that the carriers were paying in

The 300,000 trainmen in 1917 received 1917. It may be expected, therefore, that by Act of Congress an increase in wages the standard railway shares listed in The

amounting to about $60,000,000 a year. Outlook will continue paying their regular

Toward the end of the year they presented dividends.

demands for further increases in wages Because of uncertainty as to what terms

amounting to approximately forty per cent. the Government will propose in taking over

One of the first problems before the Directhe railways, their securities continued to

tor-General of Railways is the settlement decline during December, and on the day

of the Brotherhood demands. The presafter Christmas they touched the lowest ent pay-roll of the trainmen is about prices of the year. The President's procla

$450,000,000 a year, or an average of $1,500. mation was issued that evening, and on the

What, then, would happen to the 1,300,000 following morning there was an extraordi other employees? Their pay-roll now is nary rise in the market. The twelve differ

$1,500,000,000 a year, or an average of ent shares that could be purchased at the

$800. It would seem that these less well beginning of December for $1,000 declined paid employees are in greater need of an to $910 on December 26 and advanced to

advance in wages to meet the high cost of $1,031 following the announcement from

living than the well-paid trainmen. If the Washington. At the closing prices of the

fifteen per cent bonus were granted the year these twelve shares could be purchased

trainmen, it is plain that there would be an

urgent demand from the other employees We give the list of companies, with the

for a similar advance. This would raise prices on December 1, December 26, and

their

average from $800 to $920, and would increase their total pay-roll by nearly

$160,000,000.
$83

$757 $81% If the Government gives the railway
73
62%2 774

workers a war bonus of as much as fifteen
4242 5174
91
80'4 89%

per cent, the pay-roll will be increased by up-
8672

wards of $225,000,000 for the period of the
112

war. With Government guarantees of net
71%
101%8

earnings, such a large increase in the labor
75%

cost would have to be met in considerable 47 measure out of the Government Treasury.

83% That this is not without precedent is seen 1024

by the English experience. Since England $1,000 $910 $1,015 took over her railways there have been three

ESTABLISHED 1865

Proceeds of bonds will
complete improvements
increasing materially
the output of COAL-
a natural resource of
vital and timely impor-
tance. Value of security
over four times amount
of issue. Contracts pro-
vide satisfactory fixed
percentage of profit
over all costs, and assure
monthly deposit of one-
twelfth annual princi-
pal and interest, regard-
less of mine operations.
$500 and $1,000 bonds,
maturing in 2 to 15
years.

ITT ESTABLISHED 1865 ||||

Write for
Circular No. 9982.

for $1,015.

Peabody,
Houghteling & Co.

Dec. 26.

Dec. 29.

(ESTABLISHED 1865)

47

December 29:

Dec. 1.
Atchison....
St. Paul preferred.
Chesapeake and Ohio.
Great Northern..
Illinois Central.
Louisville and Nashville.. 118
New York Central..
Norfolk and Western.
Northern Pacific.
Pennsylvania..
Southern Pacific
Union Pacific..

95

93

69 103 87

106
63
96

10 South La Salle Street

Chicago, III.

86

81 111

Totals....

ESTABLISHED 1865

1

GB

“Bond Topics

g Nustrated
9 Interesting

g Instructive
Our 12 page monthly, sent free
on request to banks, institutions
and private investors.
The current issue contains :

“BIG BUILDING WITH
LITTLE BRICKS
g How the Nation is being

taught the gospel of Thrift.
" INVESTIGATE-THEN
INVEST"
9 A timely warning to the

inexperienced investor.
EDITORIAL-THE TREND-
NEWS AND NOTES OF
THE COMPANIES-
OUR CURRENT OFFERING

yielding

Wisconsin Dairy Farm Mortgages

%

6

OIL

Government Control and Railway Finance

(Continued)
successive war bonuses given to the railway

First Mortgage
workers, amounting to 15 shillings a week Real Estate Serial Notes
for each man. This is equivalent to about

offer what the successful investor always de $190 a year. The same bonns for Ameri

mands-ample security and good returns. can railway workers would aggregate

These notes are secured by first mortgages on $300,000,000.

improved property, the ground value alone

frequently having a value greater than the During the war the bonus to the English total of the loan. After careful inspection and

investigation by our experts, we buy the entire
railway men is being paid by the Govern-

issue of notes in other words, back our
ment, because the earnings of the companies judgment with our own money.
are insufficient to meet this burden. If Banks and other careful investors throughout

the country have formd these notes attractive,
American railway workers receive a war

because the original notes are delivered to bonus, the same method of meeting the cost them. The genuineness of each note is certified would be followed here under the Govern

by us, thus preventing forgery or over-issue.

Our profit is the commission we charge the ment guarantee.

borrower. But what would happen after the war if

This plan enables you to invest $600 or multi

ples thereof; to choose maturities and diversity
these companies were turned back to their your investments. Interest 5%-542% and 6%.
owners? If freight and passenger rates are

Write for our currezi investment list No. 104
not raised by the Government to take care Mercantile Trust Company
of increased labor costs, the carriers after

Capital and Surplus $9,500,000
the war would find themselves burdened

Saint Louis
with very high operating costs and rates

Member Federal Reserve Bank
inadequate to meet them. A $300,000,000
increase in cost of labor would be equiva-
lent to the total amount now paid in divi-
dends by all American railways. It must
be plain, therefore, that if the new Director-

ALWAYS WORTH PAR
General of Railways does not provide for
higher operating costs during the war by

An ideal war time in-
raising railway rates, the carriers after the

vestment based on an war will find themselves in a very precari

industry never overdone. ous condition, unless, as many experts be

Price regulation and taxation lieve it will, the present Government opera

do not depreciate the security.
tion of railways becomes permanent.

Write for our Booklet "12"
It might be argued that large advances

MARKHAM & MAY CO., Milwaukee, Wis.
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

The Kansas Fields
have to face if they attempted after the
war to reduce wages to a pre-war basis.

have shown wonderful developments
The after-war values of railway shares,

in 1917
therefore, are in the melting-pot. The only
assurance investors have is the confidence We have prepared a booklet giving much
that the Government—whether it takes

information on this subject with list of the
over the railways permanently or turns

principal companies operating in that State. them back to their shareholders—will

If interested we shall be glad
deal fairly with the owners and maintain

to send this on application.
railway credit as a matter of National
safety.

A. D. CONVERSE & CO.
Some politicians and publicists believe 5 Nassau Street

Commercial Trust Bldg.
that any large increases in the cost of labor New York

Philadelphia
and material under Government operation
during the war will be absorbed by the

Free Booklets for Investors
operating economies that will result from
unified management. But no assurance for Many of the investment bankers publish
this can be found in the liistory of govern-

booklets and literature for the information of
ment control of railways in foreign countries. prospective investors. The following is a list
The universal experience has been that of booklets which may be obtained by writing
government control is not as economical to the investment houses issuing them, men-
as it is in the best privately managed rail tioning The Outlook, or by writing direct
ways. But the additional expense of Gov to the Financial Editor of The Outlook:
ernment railways, which would be met by

“Bond Topics "-Issue No. 0-200. A. H. Bicktaxation, may be justified by the wider and

more & Co., 111 Broadway, New York.
more uniform service rendered the public.

The Kansas Oil Fields. A. D. Converse & Co.,
The big item in railway operation is 5 Nassau St., New York.
labor. Nearly two-thirds of the cost of

Danforth Farm Mortgages-List No. 58. A. G.
operation is the pay-roll, and Government Danforth & Co., Washington, IU.
operation of public utilities here and abroad “A Buyer's Guide to Good Investment." Federal
almost invariably increases the labor cost. Bond & Mortgage Co., 90 L Griswold St., Detroit,
When the wages of 1,600,000 workers are

Mich.
fixed by a single Government authority, it Wisconsin Dairy Farm Mortgages-Booklet 12.
is plain that the political management of

Markham & May Company, Milwaukee, Wis.
both the employees and the finances of the

First Mortgage Real Estate Serial Notes. Investrailways must be of the highest character.

ment List No. 104. Mercantile Trust Company,

Saint Louis.
Political and partisan bureaucracy must
not be tolerated. Investors, in forming their

“ Partial Payment Suggestions”—Circular M-48.

John Muir & Co., 61 Broadway, New York, judgment of the present value of railway

Income Tax Primer, AB-2000, National City,
securities, must bear this in mind, and must

Company, National City Bank Building, New York
for their own protection, if for no higher
motive, do their share in insisting upon

First Mortgage Real Estate Bonds--Circular No.

9987. Peabody, Houghteling & Co., 10 South La clean and efficient political administration, Salle St., Chicago, III.

NOT ONE DOLLAR LOST

ON A
DANFORTH FARM MORTGAGE

IX SIXTY YEARS
No Investor has ever foreclosed a Mortgage, taken a foot
of land or lost a dollar on a Danforth Farm Mortgage.
For further information regarding our Farm Loans and

Bonds write for Booklet and Investors' List No. 58.

A-G-Danforth.&.Cosafety

BANKERS WASHINGTON

Founded A.D. 1858

ILLINOIS

BY ROBERT H. MOULTON

1918
THE POWER OF THE

nitroglycerine, may sleep in the submarine the peanut. The experimenters are raising PEANUT

torpedo which is to destroy a great battle the latter on the demonstration farms and ship, or it may send a half-ton projectile are producing better results every season.

flying forth from the mouth of a gun. So surprising has been the success of the The boll-weevil, as a blessing in disWe now find that the meal mixed with

experiments 'that the planters have begun white flour makes a palatable and highly guise, has redeemed the South from the

to look for the dark side of the silver lining. disgrace of being a one-crop country. Cot

nutritious bread, and that it may be used The price of peanut products has gone up

for crackers and cakes. Peanut buttei can ton is no longer autocrat. He has been

with all its companion foodstuffs. Will it dethroned by the weevil, and must now

take the place of cow's butter; and peanut come crashing down at the end of the war? take his place as merely one of a democ

meal, which is a by-product of the oil, How much danger is there from over-proracy, or perhaps an oligarchy, of crops, makes the best of stock food.

duction? among which the once humble peanut is

In addition to the direct profits, the pea According to one of our peanut experts, rising to unwonted prominence.

nuts leave the land better off than when there is little danger of surfeiting the In 1908 we raised twelve million dollars' they were planted. For, like many of their world with peanut oil and cake, because worth of peanuts. A conservative valuation

cousins in the bean family, they gather and the food value is such that there is a uniof this year's crop is sixty million dollars. deposit' nitrogen in the soil.

versal market for them. The South abounds Texas alone has two hundred thousand

In 1914 the United States imported in sandy soil that will produce little cotton acres. What is to be done with all these 44,549,789 pounds of peanuts and 1,332,108 or grain. If the peanut could submit specimillions of bushels ? Surely they are not all gallons of peanut oil from Marseilles, fications, it would ask for just such soil. to be sold on the street corners to our boys Delft, Hamburg, and other ports. The nuts Vast tracts where pine forests have stood for five cents a bag! By no means. In the brought $1,899,237, and the oil, which was may be made useful and valuable by plantfirst place, the product is of high food valued at $915,939, went mostly into the ing them with peanuts. The cottonseed value-higher even than wheat. The oil is manufacture of butterine and other lard mills have a capacity far beyond the availa better lard substitute than cottonseed oil. substitutes.

able supply of their raw material, and have It brings a higher price per gallon, and can On the strength of these things the mill therefore lain with cold furnaces for a large be made in the very same mills by the men experimented with peanuts. The re part of the year. But now that the machinsame machinery that used to turn out cot sults were so successful that the acreage in ery of these mills, with slight adjustments tonseed oil.

Texas increased more than 1,000 per cent that cost very little, can be turned into And who would ever think of a peanut in from 1915 to 1916. In that State the peanuts peanut-oil plants as they stand, they will connection with our munition plants? They and cotton, acre for acre, as far as the value naturally welcome a new industry that will seem as far apart as the North and South of the crops is concerned, are now running extend figures on the credit side of the Poles. Yet the peanut, in the shape of neck and neck, with the chances in favor of ledger.

Real Estate
Brchange Bldg..

Detroit

The Federal
Bond & Mort.
sage

Com -
pany own and
offer, subject to
prior sale, at par
and accrued inter-
est the following :

BONDS

Real Estate Exchange Building

Are You An

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

you may be interested. This serv

free
to Outlook readers.

The Outlook
Financial Department

1st MORTGAGE 6% SERIAL BONDS

$850,000 Directly secured by a ber 22, 1917. Interest payable May closed first mortgage on and November 22d. building and land in fee, in heart of Detroit down

Building-a twenty story office building, town business district

steel, concrete and terra cotta construcfacing on Cadillac Square,

tion of most modern type. Within a opposite Pontchartrain step of principal car and interurban lines. Hotel.

Amount Term Maturity Denominations
Valuation $1,771,-

$ 20,000 2 years Nov. 22, 1919 $500-$1000
40,000 3 years Nov. 22, 1920

500 1000
755. Total issue 50.000 4 years Nov. 22, 1921

500 1000 56,000 5 years Nov. 22, 1922

500 1000
$ 850,000. 50,000 6 years Nov. 22, 1923

500 1000
Dated
50,000 7 years Nov. 22, 1924

500 1000
50,000 8 years Nov. 22, 1925

500 1000 Novem 50,000 9 years Nov. 22, 1926

500 - 1000
490,000 10 years Nov. 22, 1927 $100- 500- 1000-$5000
FEDERAL BOND & MORTGAGE CO.

DIRECTORS
Harry W. Ford Edward A. Loreley Fosepi Mack Nathan M, Gross
LE. Oppenheim Tolix Mahler Carl A. Gree! Ernest C. Kansler

“ Detroit's First Mortgage House
Phone Cherry 1177

90L Griswold Street

would be pleased to receive your booklet, “ A Buyer's
Guide to Good Investment, noted in Outlook and
circulars descriptive of these bonds.
Name-

ice is entirely

Address:

Mail This Coupon. Today

74

9