more efficiency and usefulness obligations which are already laid upon them as citizens of the United States. Co-operation of the War Department The Secretary of War, Hon. Newton D. Baker, said, in writing to the Governing Committee of the Military Training Camps Association: "I heartily approve and indorse the valuable and patriotic service that is being rendered to the country by the army training camps for civilians. I believe in the work of these camps, not only from the military point of view but as of value to the nation educationally in promoting discipline, order and good citizenship. *** You may rest assured that in continuing your work of developing and promoting these camps on a National scale you will have the continued co-operation and support of the War Department." Last year those who attended the camps included National statesmen and legislators, prominent lawyers, bankers and merchants, but most were men who labor hard for a daily wage; the same is true this year. in the enrollments, but instead of there being twenty-two hundred there will this year be over thirty thousand in the various camps which have been organized in the four departments. It is important that the knowledge of the military training camps and the opportunities they afford be spread and given the encouragement they deserve, and toward this the employer is now giving his fullest co-operation. ROLL OF BANKS AND TRUST COMPANIES PLEDGED TO AID THE MOVEMENT FOR MILITARY TRAINING Thousands of banks and trust company employees will be enrolled in the various camps to be conducted under the auspices of Army officers for military training. The demand for National "preparedness" finds a ready response on the part of bank and trust company managements throughout the United States. Official action has been taken by scores of institutions offering to grant full pay and extended absence for one month to such members of the staff as wish to enter the summer camps. Aside from attendance at these camps there are separate organizations for military training. At the Guaranty Trust Company of New York, for example, a number of rifle teams have been formed among employees and the training will be under the supervision of an advisory board of members of the staff from the different departments who have had military instruction. At the Bankers Trust Company of New York a special militia company has been organized among the employees which will have drills under an officer of the United States Army. In Spokane, Wash., a military company has been organized among the employees of the Spokane & Eastern Trust Company. At the recent banquet of the Massachusetts Trust Company Association there was cordial assent to the suggestion made by Toastmaster George S. Mumford that managements encourage members of their staffs to enlist in the Plattsburg Camp. Indicative of the prevailing sentiment among bankers also is the referendum taken among members of the Illinois Bankers' Association which showed that over 95 per cent. of the membership championed the cause of prepared ness. The following list of banks and trust companies which have officially announced intention to grant full pay and absence to their employees to attend the training camps is but a partial list and does not include institutions which have accorded such privilege outside of New York, Philadelphia and. Boston. The list given herewith is also subject to further additions from New York, Philadelphia and Boston. TRUST COMPANIES OF NEW YORK CITY Columbia Trust Company Commercial Trust Company Empire Trust Company The Equitable Trust Company The Farmers Loan & Trust Company United States Mortgage & Trust Company American Bankers' Association The Chatham & Phenix National Bank The Citizens Central National Bank MACHINE GUN TRAINING AT THE PLATTSBURG CAMP Lincoln National Bank The Market & Fulton National Bank Mechanics & Metals National Bank The National City Bank of Brooklyn The National Butchers & Drovers Bank Northside Bank of Brooklyn The National Park Bank New York Savings Bank Union Dime Savings Bank United States Safe Deposit Company The Western Union Telegraph Company Wm. Iselin & Company W. R. Grace & Company The Equitable Life Assurance Society BANKS AND TRUST COMPANIES OF NEW JERSEY Clifton Trust Company, Clifton National State Bank, Newark North Ward National Bank, Newark National Newark Banking Company, Newark Union County Trust Company, Elizabeth Union National Bank, Newark BANKS AND TRUST COMPANIES OF PHILADELPHIA Fidelity Trust Company The Pennsylvania Company for Insurance on Girard National Bank BANKS AND TRUST COMPANIES OF BOSTON American Trust Company Boston Safe Deposit & Trust Company First National Bank Fourth National Bank International Trust Company Liberty Trust Company Merchants National Bank Americanize the Immigrant There is perhaps no problem today confronting the business men and bankers of this country the proper solution of which would yield such excellent results as that of making good, permanent citizens of the thousands of immigrants who come to these shores every year. When the war is over in Europe, there will probably be a greater flood-tide of immigration to this country than ever before because of the desire to escape the crushing burdens of taxation and the possibility of a repetition of the horrors of warfare. The task assumes greater importance when we stop to consider that every year tens of millions of dollars, earned from American industries, are sent back to Europe or taken away by those who return to their native heaths. While the postal savings system has been effective in bringing out the savings of foreign-born, it offers no assurance that those deposits remain in this country. It is shown that 72 per cent. of all postal deposits belong to these alien races. President C. S. Calwell of the Corn Exchange National Bank of Philadelphia makes a timely plea for the Americanization of these immigrants in a recent issue of "The Advance" the house organ of the bank over which he presides. He suggests that business men and bankers should direct their attention to encouraging immigrants to become owners of American property; that they should be encouraged to acquire homes by making conditions convenient for them; that they be induced to invest in American property and thus have an anchorage which will convert them into loyal citizens of this country. The American Bankers' Association has undertaken a National campaign to inculcate habits of thrift. Would it not be a logical and wise step to adopt some plan at the forthcoming Kansas City convention through which bankers may be enabled in a practical way to help bring about the Americanization of aliens? Certainly it is to the interest of bankers to discourage the annual exodus of millions of savings to the "old country." As stated in "The Advance" a common language and a common property interest will surely make a common loyalty to the flag, a doctrine which is especially pertinent at this time. WHY PUBLIC UTILITY BONDS ARE ESPECIALLY SOME FACTS AS TO STABILITY OF EARNING POWER AND ALLEN G. HOYT Of N. W. Halsey & Co., New York City In view of the many new problems confronting banks and trust companies in seeking safe as well as profitable employment of their large volume of surplus funds and the further necessity of assuring the marketability of their assets because of the uncertain conditions in international affairs it is doubtless of interest to ascertain the reasons for the growing appreciation of the soundness and desirability of public utility bonds for investment. According to the last annual report of the Comptroller of the Currency the holdings of public utility bonds by all banking institutions reporting to the Comptroller increased 38.8 per cent. during the period from June, 1910, to June, 1915, as compared with an increase of 22.9 per cent. in holdings of all other classes of securities. So-called "institutional" buying by National and State banks, savings banks and trust companies has become a more important factor than ever before in the public utility bond market and doubtless the prime reason is their intrinsic merit, ready market and relative immunity in earning capacity from any adverse conditions that may be traced to the European war or to the prospect of readjustments when is peace restored. Demand for Capital After the War The probable effect of the return of peace upon financial and industrial conditions in the United States is a matter of great interest to investors, economists, and business men. Existing conditions are so unprecedented that observers put forth their prophecies only in a tentative way and rarely indeed do we hear of a forecast made with assurance. Investors, however, should at least give consideration to the arguments of those who hold that the rehabilitation of the devastated areas of Europe, the revivification of shattered industries, and the resumption of normal conditions, will result in an enormous demand for capital. This demand, it is contended, will affect the investment markets of the world, including those of the United States. Dearer rates for capital and innumerable other after-effects of the war may conceivably greatly alter our industrial and financial situation. The investor will do well to consider carefully the question of how his securities will be affected if the next few years are to bring about a world-wide readjustment in economic conditions. Stability of Earning Power During the past three decades a vast amount of capital has been loaned to public service corporations in the United States and almost without exception these loans have proved very satisfactory to the lenders. That utilities enjoy a remarkable stability of earning power is so well known to those who are familiar with the history of such corporations that it seems hardly necessary to call attention to this characteristic. The United States is a country growing in population and in wealth. The wealth of the nation, however, increases over a period of years in a much higher ratio than does the population. Concomitantly there follows a betterment in the standard of living of our people. A higher standard of living in turn results in an increased demand for the necessities and conveniences supplied by the gas, electric, and other public service corporations, and it is not difficult to appreciate the causes which underlie the steady growth in the earning power of these companies. Even in years of business depression the earnings of standard utilities seldom go backward. The normal ratio of increase is merely reduced or interrupted. If in spite of the extraordinary prosperity we are now enjoying the future is just a little uncertain. the holder of public service company bonds may derive no small measure of satisfaction from the fact that he owns obligations of corporations the earning power of which is affected in a relatively small degree by fluctuating business conditions. The Comptroller of the Currency reports that from June, 1910, to June, 1915, the holdings of Public Utility, Bonds by all banking institutions reporting to the Comptroller increased 38.8% against an increase of only 22.9% in holdings of all other classes of securities. These figures suggest strongly the bankers' estimate of the two most important investment elements-Safety and Yield. CHART SHOWING THE INCREASE IN BANK HOLDINGS OF PUBLIC UTILITY BONDS Return on Publicity Utility Investments The holders of utility bonds enjoy another advantage which is particularly marked in periods of unfavorable financial markets. In such periods, when the future is clouded, the investor is disinclined to make new commitments. At the same time he hesitates to sacrifice his securities at abnormally low prices when the markets are depressed. While he is waiting for the skies to clear he will, if an owner of high-grade utility bonds, receive his interest with uniform regularity and at the rate of from 5 per cent. to 5% per cent., while the owners of standard municipal or railroad bonds are receiving but 32 per cent. to 42 per cent. from their investments. There is one other factor which favors the owners of public utility bonds if there is a probability that the rates which will be paid for the use of capital will increase upon the return of peace. Most public service corporation bonds mature within fifteen to thirty years, whereas most railroad bonds, especially those issued during the past two decades, run from fifty to one hundred years. A fifty-year 4 per cent. bond now selling at par, or on a 4 per cent. basis, will suffer a certain depreciation in market price should the higher cost of capital cause such a bond to sell on a 44 per cent. basis. This depreciation will be about one and two-thirds times as great as that which a twenty-year 5 per cent. bond now selling at par would show should the increased cost of capital result in its selling on a 54 per cent. basis. As high-grade utility bonds generally yield higher prices than standard municipal or railroad bonds, and as they are growing in favor with conservative investors from year to year, they seem better to resist the depreciation which naturally follows an increase in the cost of capital than any other class of securities. Investors in a well-secured public utility bond may view with equanimity any readjustment within the range of probability, the future may bring forth. |