RAILWAY PRIOR CHARGE STOCKS.
In view of the meagre interest yields now obtainable from British Funds and other trustee securities, it is not surprising that an eager search should be made by investors for reasonably sound stocks giving a somewhat higher yield. Those who were early in the field did well in this respect nearly a year ago when they acquired the prior charge stocks of various English railways, for, as I pointed out at the time, they had fallen to a level which made them distinctly attractive to the specula- tive investor. Unless labour conditions become more settled. I doubt if Home Railway stocks, even the prior charges, will ever return to quite their old position of favourites with the investor, but, all the same, amidst present famine conditions in the market for gilt-edged securities, investors might do worse than select some of these stocks, if only for the time being. It is not easy now, for example, to obtain a sound stock giving a 4 per cent. yield ; yet the 4 per cent. Guaranteed Stock of the London Midland and Scottish Railway can he obtained at about 98, giving a yield of a little over 4 per cent., and as regards security it may be noted that although last year—taking the year as a whole—was by no means a specially favourable one for English railway earnings, the net revenue remaining after paying the full interest on that Stock was £4,646,000, thus constituting a very good margin of security.
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