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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (Feb. 25, 1959)
Bonds Being Discredited as Objects of Prime Investment M Elaier Walzer By ELMER C. WALZER UPI Financial Editor New York - (CPD - Inflation has done some fantastic things to stocks and bonds over the years to the point where bonds - once prime invest ments are being dis credited. The argu ment runs that common stocks alone present a hedge against inflation while bonds do not. Bonds of solvent companies are paid in full at maturity in the prevailing dollars. During their lifetime bonds pay interst regularly, gener ally in semi-annual install ments. A $1,000 bond due 20 years hence will be paid off at $1,000, but there is no guar antee that the $1,000 of 1979 will be equal in purchasing power to the S1.000 of 1959. The brokerage firm of Francis I. DuPont holds that the preference for stocks over bonds for preserving real capital is of long duration. The first worked out two examples - one stocks and one bonds over 45 years. Let the company explain it: "It is assumed that $100,000 was invested in each of two accounts in 1913. "One of these portfolios consisted solely of common stocks. This fund, originally $100,000 would today be worth over $450,000 in terms of purchasing power. That means it has a value more than 360 per cent in excess of its worth 46 years ago." Never Reaitained 1913 Worth The bond $100,000 was in vested in one railroad issue, and according to the firm type fund, corrected for pur chasing power, has never once reattained the 1913 worth. "And . today," the . firm adds, "the value is less than 10 per cent of the corres ponding figure for the fund invested in stocks over the last 46 years." Assuming the dollar is worth $1 in 1947-1949 prices, the basis of the consumer price index, it is worth 80.? cents today. On that same basis it would have been worth $2.36 in 1913. '"There have been two underlying factors that, over the years, have continually favored stocks over bonds," the Du Pont firm says. "These are the historical decline in the purchasing power of the dollar, and the long-term up trend in shares of American industry. "The moral of this story is that all is not gold that glitters and all is not safe that is fixed." A bond carries a fixed in terest rate and usually is paid off at par in a certain num ber of years. Thus a bond quotation carries the per cent of interest - the coupon - and the year of maturity XYZ as of 1995, for example. j A bond is a debt of the issuing company often a I mortage on the property. A I stock is an equity in the com pany - ownership. If the dividend is passed on the stock nothing happens. If a company defaults on its bonds it usualy is thrown into re ceivership and the bond holders get first lien on assests. Bonds have a definite place in corporate finance. Their difficulty in recent years has been the fluctuation of the dollar. No one is suggesting bonds be done away with. But there are urgent suggestions and prayers that the dollar be made stable. For vears the tendency of corporations has been toward financing through bond offer ings rather than stock for the simple reason that the inter est they pay on bonds is not taxed whereas money paid in dividends on stocks is tax ed at the corporation tax rate of 52 per cent. Now that stocks are in style, there are many who think corporations will do a bit more financing through issuance of more shares. Disk Jockey Nears Wake-a-Thon Goal Bakersfield, Calif.- (UPD -A radio station disk jockey was well on his way today to com pleting his goal of 240 hours or 10 days of continuous wakefulness. Jim Stokes Tuesday passed the 201-hour mark set recent ly by New York DJ Peter Tripp.. He began his wake-a-thon officially at 9:21 a.m. Monday. Feb. 16. He will reach his 10-day goal Thursday. The 26-year-old father of four children said he would rely on the advice of phy sicians in achieving or stop ping short of his goal. The wake-a-thon was being held in connection with the Heart fund drive. MYSTERY SOLVED Port Gibson, Miss. - (UPD - Farmer Ed Gritman thinks he's solved the mystery of his missing sheep. He found and killed an apparently well-fed alligator in the bayou adja cent to his pasture. TODAY In Oregon History (A Centennial Feature) FEBRUARY 25. 1889 By act of the legislature, which became law today, a new county, Harney, has been carved out of what were formerly the southern and middle portions of Grant County. Harney is named in honor of Major General William Selby Har ney, an Indian fighter of note, hero of the War with Mexico, and formerly in command of the District of Oregon. General Ha'rney is presently living in the East. The present seat of govern ment is Harney, but it is expected that a hot county seat fight will develop, Drewsey. Silvie's City, Wright's Point and Burns all being hopeful that the lightening will strike. FEBRUARY 25. 1885 By act of the legislature, signed by the governor, Gil liam county today came into being, cut in part from Wasco County and in part from Umatilla. The county seat will probably be Alkali. The new county is named in honor of Colonel Cor nelius Gilliam, pioneer of 1844, who was killed by ac cident during the Cayuse" War which followed the massacre of the Whitmans at Waiilatpu mission. MINDSZENTY AIDE DIES Vienna -(UPD- The Rev. Al bert Egon Turcsanyi, 63, for mer personal secretary to Jos- zef Cardinal Mindszenty, has died in a Hungarian prison, the Austrian Catholic Press service reported Tuesday. Lower Retail Prices on Food Seen This Year Washington-flJPD-The Agri culture department said to day retail food prices are likely to average "a little low er this year than in 1958 when they were at an all time high. The department forecast a small reduction in prices be cause of prospective larger supplies of pork, eggs and, at least during the first half of 1959, of fresh citrus fruits and vegetables. Little Cause for Joy There appeared to be little cause for joy among grocery- buying nousewives and pro ducers, however, because the department forecast said that "marketing charges for food are likely to increase this year." This means a smaller farm share of the consumer's food dollar, a bigger take for the middleman, and less sav ings for the housewife. The department said in its publication, "The National Food Situation," that per capita consumption likely would recover from the de cline of last year when sup plies of some foods were tem porarily reduced; Consumption Higher The per capita increases will be mostly in pork, lard, chicken and, possibly, lamb and mutton. The consumption rate of beef likely will be 81 pounds per person compared with 79.7 pounds last year. The rate for veal is forecast at 6.7 pounds, compared with 6.8 pounds in 1958. The consumption rate of pork will jumpin to a whop ping 66 pounds compared with 60.6 pounds last year. The eating of lamb and mut ton is expected to go up from 4.1 pounds per person to 4.4 pounds. Consumption of chicken will jump from 28.2 pounds to 29.8 pounds, the depart ment said. " Quotes From the News By UNITED PRESS INTERNATIONAL President James Hoffa, predicting his union would beat the AFL-CIO in a race to organize workers in Puerto Rico: "'We'll meet this situation as we have met others forced upon us by the AFL-CIO. And . . . we'll be on top when it is over." Washington-Chairman Otto E. Rgssman (D.-La.) predict ing that the House appropriations subcommittee would trim President Eisenhower's "wasteful" $4 billion foreign aid re quest despite veto threats: . , "The threat of veto-or bluffing tactics-will not shake the integrity of the members of the subcommittee." ARREST HOARDERS Vienna -(UPD- Czechoslova- kian police have arrested 175 persons for hoarding goods, Radio Prague reported Tuesday. REFUSES WARRANTS Memphis, Tenn.-ftJPD-Judge Willard Dixon refused Tues day to issue assault warrants against High School Principal John Barnes who paddled 10 teen-age boys to quell a stu dent strike. Mothers of two of the boys . had brought charges against Barnes. SWISS ENVOY DIES Luxembourg (UPD Pierre Frienden, 64, former prime minister of Luxembourg, died Monday in Zurich, Switzerland. Los Angeles-Dr. Luther Evans, former director general of the United Nations Economic, Social and Cultural organi zation, denying that United States aid was contingent on whether an underdeveloped nation was anti-Communist: "This is not really the genuine explanation of our efforts. Our moral position is greater and more noble than we have staled it to be." ' Dulles Observes 71st Birthday Washington -(UPD- Secretary of State John Foster Dulles today observes his 71st birth day at Walter Reed Army Medical Center where he is waging his second fight with cancer. His doctors will "hazard no guess as ' to whether he can ever again resume his full time duties. But there is no doubt that the secretary is keeping his hand in interna tional affairs to a considerable extent. He has conferred with Pres ident Eisenhower four times since his Feb. 13 hernia oper ation when doctors discovered a recurrence of the maling- nancy for which he underwent surgery in November 1956. Dulles confers daily by tele phone with his aides at the State Department, including his acting secretary Christian Herter. He also has held long talks at the hospital with Vice Pres ident Richard M. Nixon and with his brother, Allen W. Dulles, director of the Cen tral Intelligence agency. Officials have made it plain that these talks are not in the nature of idle sickroom chit-chat. The secretary talks about Berlin, the Middle EaLc, nuclear disarmament, and oth er top problems of the diplo matic agenda. NOT SO OLD Hidesheim, Germany -4UPD- Officers and men of the Brit ish First Royal. Horse Artil lery Regiment here were up in arms today over their "100 year old" cannon. Someone discovered an inscription on it saying: "Made in Essen, Germany, 1956." PONTIAC NAMED CAR OF -THE -YEAR "Pontiac with wide-track wheels is the best combination of ride handling ... performance and styling of any '59 car- W4 j 1 MOTOR 5 TREND I I PONTIAC I The Editors of Motor Trend Magazine In making its annual automotive award, the staff of Motor Trend Magazine, leading automotive publication, tests and evaluates all new cars. Here are quotations from the April 1959 issue: "The stability of the 1959 Pontiac is the out standing automotive advance of the year. Everyone considering a new car should experi ence it." "It's the best balanced passenger car in America. We firmly believe that in moving the wheels farther apart, to- develop the widest stance of any American car, Pontiac has created an entirely new sense of balance and handling security.' "Pontiac's lines are clean, simple and beau tiful. It has a fleet look, a trim appearance. The wide wheel design contributes greatly to its f over-all integrated styling. Any comparison with narrower track cars readily shows the difference." "For the economy-minded, an efficient new engine. The new 420E Tempest economy en gine offers remarkable performance along with exceptionally high mileage while operating on regular grade gasoline." "Pontiac is again tops in performance, based on our extensive road testing. Acceleration is outstanding, yet the engine is unusually quiet and smooth." Your nearest Pontiac dealer will be glad to let you road-test this award-winning automobile on your own. You'll see why it's the year's most talked-about car! PflMTI API America's Number Road Car Willi n U Three Totally Kew Series Catalina Star Chief Bonneville THE ONLY CAR WITH WIDE-TRACK WHEELS Wheels are five inches farther apart. This widens only the stance, not the car. Pontiac takes a better grip on the road, hugs tighter on curves and corners. Swav and lean disappear, ride is smoother, balanced, steadier. Handling is easier. You drive with a new confidence, a comforting security.. Pontiac gives you roadability no "narrow gauge" car can offer. FREE If you would like a reprint of the com plete, illustrated article with all the tests and evaluations on which Motor Trend judged Pontiac "Car of the Year" see your Pontiac dealer or simply send your name and address on a post card to Pontiac Motor Division, Department 10. Pontiac, Michigan. SEE YOUR LOCAI AUTHORIZED PONTIAC DEALER Joke on Woman Nearly Backfires Turin, Italy -(UPD- Friends thought they were pulling a funny joke on jealous Mrs. Vera Ganella, 25, when they placed a black lace garter belt in her husband's pocket. g When they eventually told her it was a joke, she refused to believe it. Tuesday while alone at home she closed the windows and turned on the gas. Her husband came home just in time to save her. Doc tors said her condition was not serious. Olympia -(CPD- Gov. Albert D. Rosellini said Monday the Northwest should consider sharing surplus kilowatts :ith California. MAIL TRIBUNE, Medford, Ore., Wednesday, February 25, 195 5 SHJVE AT HOME ifor driving with one hand. Elizabeth, N. J. -(UPD- Dr. I Police said he was using hij Charles Axinn, 51, of Linden, other hand to shave himself N. J., was arrested Tuesday I with an electric razor. 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Infants' Shoes Reg. $1.39 Your choice m m pr. Corduroy with fancy trim. Rib on lace. Blue and white, pink and white, yellow and white. Reg. $1.39. Capri Pants Your Choice $99 pr. Ladies' cotton sheen. New spring colors. Stripes, checks, plaids and polka dots. High rise waist, split leg. Washable. Import Shirts For QQ Boys M M ea. Sanforized sport shirts. Good selection, full cut. Guar, wash able. Sizes 6 to 16. Reg.' 1.27. Gold Band Razor Blades 25 - 49 Double edge. In blue plastic dispenser. Money back guarantee! Mix-Up Candy Special 39 pound Assorted wrapped candies. 12 kinds. Mix your own and save at Newberry's. Choice Begonia Bulbs Double Camillia. IQl 2 large bulbs in pkg. jT . Hanging Basket Type. JiQt 2 bulbs in package " I Mixture. 10 large bulbs Q Ac in package for OTr Sixth & Central, Medford' Bargain Corner DEAN Cr TAYLOR PONTIAC CO. 6th AND GRAPE MEDFORD
