able only from revenues of a municipally- 

 owned utility? 



What is the nature of the population 

 of the community? Is it stable and 

 reliable? Are the industries varied or 

 is it a one-horse show? What is the 

 ability of the community to pay its ob- 

 ligation ? And one of the most important 

 of all, is it willing to pay? Is the issue 

 legal in all respects, and is it market- 

 able in the event one is required ^o cash 

 in on the investment? 



What is the political government of 

 the unit and the character and capacity 

 of officials? The degree with which they 

 recognize their civic duty, and their will- 

 ingness to co-operate to maintain the 

 credit standing of their municipality? 

 These and perhaps a hundred other ques- 

 tions, must be answered satisfactorily 

 before the commitment is made. 



On December 31, 1934, the life insur- 

 ance companies mentioned above had 

 two billion 929 million dollars in railroad 

 obligations. This represents 14.6 per cent 

 of total admitted assets. 



Before the coming of waterways and 

 trucks, railroad bonds were considered 

 an ideal investment for life insurance 

 funds. This situation presents a very 

 good illustration! of one of the unknown- 

 factors previously mentioned. Fortunate- 

 ly, as a result of prudent investment, 

 most of the obligations held by life insur- 

 ance companies are safe. Many railroads 

 are in receivership and being forced to 

 reorganize, but it is the holder of the 

 junior security and the holder of the 

 stock equity that will suffer in the scale- 

 down. 



The first mortgages of good railroads 

 appear to be safe and will not be dis- 

 turbed. Important factors to be con- 

 sidled in selection of rail obligations 

 are: importance and traffic density of 

 the mileage covered, amount of debt per 

 mile, relative importance of mileage in 

 the proposed consolidation of systems, 

 territory served, truck and water com- 

 petition, percentage of debt to total 

 capitalization, percentage of debt to fixed 

 value, cash position of the corporation, 

 times fixed charges earned in the past, 

 degree of maintenance of system and 

 depreciation taken, character and experi- 

 ence of management and numerous 

 others. 



Another important field is that of 

 Public Utility obligations. On December 

 31, 1934, the same life insurance com- 

 panies held one billion 913 million of 

 these investments comprising 9.5 per cent 

 of the total. 



The utilities comprise electricity, gas 

 and water, mainly. For selecting these 

 investments consideration must be given 

 to the type of business, location of 

 properties, size of territory served, popu- 

 lation, diversification of industries, gross 

 and net earnings over past years, amount 



of invested capital per dollar gross reve- 

 nue, amount of depreciation taken and 

 adequacy thereof, management and pub- 

 lic relations, mortgage position, percen- 

 tage of funded debt to capitalization, and 

 property value, stockholder's capital con- 

 tribution actually paid in, advances or 

 obligations to holding company, etc. 



In the field of real estate mortgages, 

 the companies referred to held the larg- 

 est percentage of investments — ^being 

 five billion 507 million dollars, or 27.5 

 per cent of the total. 



A thorough analysis of a bond issue 

 may require hours of diligent study of 

 the statistical services, of which Stand- 

 ard, Moody's Poors, and Fitch are the 

 principal ones. Correspondence with au- 

 thorities and management may be neces- 

 sary to secure obscure or hidden facts. 

 The degree to which the real situation 

 may be camouflaged by accountants is 

 amazing. After hours of research and 

 study the last factor may be found to 

 disqualify the bond as a desirable in- 

 vestment. 



Holding or watching the account is as 

 important as selection. 



Farm Advisers Move 



To New Posfs 



Notp; From talk (o T. A. A. insurmnoe companj 

 acfnts In AuoclsMon ottln. 



Canadian Agreement 



(Continued from page 30) 

 in this, but nevertheless there will be 

 many individuals who will do their best 

 to see that dairymen become disturbed. 

 Dairymen, therefore, will do well to com- 

 pare their incomes from 1924 to 1929, 

 when cream imports from Canada were 

 more than twice 1,500,000 gallons, with 

 their incomes between 1930 and 1934, 

 when cream imports from Canada were 

 almost non-existent. Let dairymen con- 

 sider how intimately their incomes are 

 related to factory payrolls. When fac- 

 tory payrolls are going up, dairy incomes 

 are going up; when factory payrolls are 

 going down, dairy incomes are going 

 down. If the Canadian agreement, there- 

 fore, is certain to help American in- 

 dustry fatten its payroll, dairymen will 

 be winners rather than losers. 



If you had to choose between having 

 99^ percent of a market at a good price, 

 and 100 percent of a market at a poor 

 price, which would you take? 



The truth of the matter is that our 

 new trade agreement with Canada is one 

 of the most hopeful and helpful things 

 for American agriculture that has hap- 

 pened in a long time. When anyone says 

 it is going to harm agriculture, ask him 

 to supply the evidence — all the evidence, 

 and ask him to include in that evidence 

 the general welfare of the whole United 

 States. This Canadian agreement is go- 

 ing to benefit American agriculture as 

 a whole. The agreement is designed to 

 avoid injuring any American producing 



1. K. STRtTBINOER 



Big, ruddy - complexioned William 

 Francis "Cal" Coolidge, age 42, farm 

 adviser in Macoupin county since April 

 1928, went to Morgan county as farm 

 sdviser November 25. 



After graduating from the University 

 of Illinois, class of 1918, Coolidge 

 married and farmed for eight years in 

 McLean county. The Coolidges have two 

 children — Marilyn 10 and Martha 5. Mrs. 

 Coolidge is a graduate of Illinois Wes- 

 leyan University at Bloomington. 

 T. H. Brock of Christian county 

 will succeed Mr. 

 Coolidge in Macou- 

 pin. 



Joseph Roy Stru- 

 binger, born in July, 

 1896, at Sidell in 

 Vermilion county, 

 is the new county 

 agricultural adviser 

 in Ma'ssac. After at- 

 tending the Illinois 

 College of Agrricul- 

 ture from 1915 to 1918 Strubinger 

 farmed for seven years in Vermilion 

 county, returning to the University to 

 get his degree in 1926. He worked as 

 field superintendent for the Com Stalk 

 Products Company in Danville for three 

 years, later served five years as in- 

 structor of vocational agriculture at 

 Allendale. 



Jean Strubinger, age 11, and Jo Ann, 

 seven, keep things lively around their 

 new hon\e in Metropolis. 



J. A. Embser recently went to work 

 as adviser in Franklin county. W. P. 

 Scott, brother of John Q., Clay county 

 farm adviser, is the new agricultural 

 agent in Jefferson county. G. C. Smith 

 is now associated as county adviser with 

 the Pope-Hardin Farm Bureau and 

 Harry C. Neville who resigned as ad- 

 viser in Gallatin county, Nov. 19, may 

 be found holding down the same position 

 in Saline county. 



group, and in my judgment does avoid 

 such injury. 



The danger which must be faced is 

 that enemies of agriculture will attempt 

 to stir up certain farm groups to act 

 against their own and the Nation's long- 

 time welfare. I want to urge the farm- 

 ers of the United States not to heed the 

 alarms which have been instigated by 

 the enemies of agriculture and spread by 

 those who have been victimized by these 

 enemies. The farmers of the United 

 States will not be hurt by the Canadian 

 agreement. On the contrary they will 

 benefit in many ways and especially be- 

 cause of a shared increase in the gea- 

 eral welfare. 



DECEMBER. 1935 



