Cheap Bonds

Investment bankers know that there is hoarded U. S. money yearning to buy safe securities, and corporations who need to borrow are learning this situation also. Borrowers are willing to pay less interest than heretofore, while investors are willing to accept less. Thus last week Standard Oil of New Jersey through J. P. Morgan & Co. offered $120,000,000 of debenture bonds at 5%. Morgan's merely opened their books and snapped them shut, for $500,000,000 in subscriptions tumbled in. Immediately, Standard Oil of New York offered $50,000,000 debenture bonds at 4 1/2% interest. Dillon, Read & Co. bought them all up, knowing that the bonds had a swift sale.* Standard Oil of New Jersey's yearly interest on this item will be $6,000,000. Had its bonds been sold at the 4 1/2% of its sister company's it would have saved $600,000 yearly in interest.

* Clarence Dillon is noted for his swift cavalry-like flank attacks. Thus, it was said that not until two days before the purchase of these bonds did he bother his head about them.