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.
The Slave River, flowing
258 miles from Lake Athabas
ka to Great Slave Lake in
Canada, was discovered by
Samuel Hearne in 1771.
Ladies!
fH, --f
m STI981
wS o
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W'l Selling for vj)0
to the tune of
A Product of Columbia
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Good Housekeeping's plan for
reducing "off-the-reeord."
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111 North Central
Phone SP 2-5702
m OF THE MONTH BUYS!
SPECIAL BUY! GENUINE RED HEART
4-OZ. KNITTING WORSTED
Special purchase of 4-oz. skeins of
finest quality 100 wool knitting
worsted. 4-ply construc
tion. Ideal for such ar
ticles as afghans, sweat
ers, scarfs, caps and
mittens.
UNBLEACHED
MUSLIN
Reg.
27c yd.
Special
17
yd.
Slightly soiled but good qual
ity. 80x80 count. 39 in. wide.
1 to 5 yard remnants. Remem
ber you save more at a New
berry store.
Remnants of
Foam Rubber
Your
Choice
J1
00
pound
Small pieces 7c oz.
Various shapes and sizes . .
Slight seconds at savings of
Vx or mora.
Disposable Aluminum Burner Bibs
Stop scouring, stop scrubbing.
Fits gas or elec. Speeds cooking
and saves cleaning. ONLY
39 set
PRINTED
PLISSE
Reg.
49c yd.
Special
3?
9 1 yd.
36 in. wide, on bolts. Popular
colors, ideal for sportswear,
night wear and children's wear.
Washable fast colors.
LADIES
"APROUIKS"
Only
SI 00
i
Conversational aprons. Large
pocket on side with bold let
ter novelty designs. Polished
cotton. "The apron with a
laugh."
Genuine
CANNON
Towels
for
$00
Your choice of stripes or solid colors. CANNON
towels give you more for your money. Beauti-Fluff
and fast colors.
DIMES
12 Reg. Price
Spanish lace cotton edged with
embroidery lace, all nylon and
embroidered doilies.
12-inch Round 23c
14x20" Scarf, 2 for $1.
ALL CORN
BROOM
88'
Imported from
Mexico. Red or
gold metallic
painted wood
handle . . . Buy
now, save.
Plastic Drapes
Only $1.00
Beautiful, soft, washable. Flor
al, scenic. 36x88 and 27x84.
Also double width, 54x86 only
$1.98.
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