T every SYNDICATES HE sale of securities by syndicates is now so general throughout the United States that a knowledge of syndicate operations is coming to be a part of investor's education. All large borrowings are handled by syndicates; that is to say, by voluntary groups of bankers associated temporarily for the purpose of carrying through financial operations on a big scale. THEIR NATURE AND PURPOSE A syndicate is therefore a partnership formed to enter upon and to negotiate a financial transaction, a partnership to be dissolved by agreement or limitation upon the completion of the business, with or without a division of profits as the case may be. The idea which prompts such an arrangement is the idea that in the union of many financial institutions there is a strength which warrants the assumption of great liabilities for the sake of eventual profit. This strength lies in two directions: first, in the ability of the syndicate group to sell the securities which it has purchased; and, second, in the ability of the members to take over and for the securities should they fail on the whole to distribute them among investors. pay The originators of business of this kind naturally take the lead in the negotiations, and they become, in the logical order of things, the syndicate managers. For instance, the Morgan firm were syndicate managers in the Anglo-French Loan; Kuhn, Loeb & Co., in the Paris; the National City Bank, in the Russian; the Continental and Commercial National Bank, in the Chinese; the Guaranty Trust Company, in the Argentine; Lee, Higginson & Co., in the Italian; Bonbright & Co., in the French Industrial Credits. No one of these firms carried through these respective undertakings single-handed and alone. This business is always "syndicated" among banking institutions and bond houses. SYNDICATE PROCEDURE When the war broke out in Europe, New York City had obligations maturing abroad amounting very close to one hundred million dollars, payable in gold. The financial community was in a panic. No single banking house could have undertaken to provide the gold with which to settle these obligations. As a result, a syndicate wag headed by J. P. Morgan & Co. and Kuhn, Loeb & Co., for the purpose of refinancing the obligations of the city of New York. This syndicate is mentioned here because it was a syndicate formed solely to preserve the city's credit, and for no other purpose. There were no profits. It is therefore an easy syndicate to understand in the consideration of the primary steps. The syndicate having been completed in the union of the two banking firms above mentioned, it was determined to offer for subscription at par $150,000,000 in New York City 6 per cent notes maturing within one, two, and three years. Investors were quick to recognize that this offering of New York City bonds on a 6 per cent basis presented a real investment opportunity. Subscriptions, or orders, for bonds came from all parts of the country. In the language of syndicates, the issue was oversubscribed. The syndicate managers closed the subscription books, allotted the small subscriptions in full, and advised the large subscribers that their applications had been scaled down. Syndicates are always considerate of small subscriptions, because they know that the small investor is less apt to sell than the man of large affairs who subscribes for fifty thousand. The fewer bonds for sale, the more favorable the market at least from the standpoint of the syndicate managers, or those who hold the bonds for investment. A syndicate is a success when it makes money, not only for the syndicate members, but for the subscribers as well. SYNDICATES FOR PROFIT In the syndicate above described there were no profits to distribute and no commissions of any kind paid to bond dealers who entered orders for the account of their clients. There were but two syndicate members; if the New York City bonds had not been oversubscribed, they would have been taken by the syndicate and paid for without further ado. This assuming of the responsibility for the success of an issue of securities is called "underwriting." In a large syndicate this underwriting is divided among numerous syndicate participants. The term "participation" indicates that a dealer or an investment banker has assumed liability for a certain part of an underwriting. In taking a participation the participant hopes to receive a proportionate share of the profits, and he agrees in turn to take up his pro rata share of unsold bonds, if any remain at the expiration of the transaction. A syndicate having been formed, the participants proceed to sell the securities in question at the price fixed. The offering is made in one of two ways, either for immediate sale, or more often for subscription, subject to allotment by the syndicate managers. When the offering is made for immediate sale, confirmations are sent out to buyers on receipt of orders and selling continues until the supply of securities is exhausted. When bonds are offered for subscription, the syndicate managers make acknowledgment of any orders received, and advise the buyer that the subscription has been entered subject to allotment at a later date. Note is to be made of the fact that any investor may subscribe for bonds offered by a syndicate, but participations in underwritings are confined to dealers and financial institutions, very often to a selected list. The participants are chosen for their ability to sell, and for their ability to pay for their pro rata share of bonds should the syndicate fail to distribute them among investors. The subscribers may include the participants; in fact, most participants subscribe. They subscribe not only for their own account, but for the account of their clients to whom they sell. There are cases, however, where a participant does not enter a single subscription. Yet he participates in the profits arising out of the sale of the bonds by other participants. In that case he is said to "ride," and to ride means, briefly, to let the other participants do the work. It is apparent that if many participants are permitted to ride, the selling will not be accomplished, leaving many bonds to be taken up by the various syndicate members or participants at the expiration of the syndicate. Such an operation can hardly be called successful, because the purpose is to sell the securities at a profit, not to distribute ESTABLISHED 1865 |||||| ||||: ESTABLISHED 1865 Diversified Investments For Your Present Successful, experienced investors agree that for utmost safety it is advisable to select investments secured by properties of varied character and location. We have an exceptionally broad list of diversified 52% and 6% securities in denominations of $100, $500, and $1,000 suitable to the most exacting requirements. We offer and recommend for your present funds four bond issues secured by these different classes of property: ||||| ESTABLISHED 1865 Syndicates (Continued) them among participants, only to come into the open market for resale at a later date. When a syndicate fails to accomplish a distribution of the securities which it has underwritten, the unsold bonds divided among participants are apt to become a drug on the market and to be sold below the original syndicate offering price.. TIME LIMITATIONS A time limit is usually set on the joint partnership agreement which creates a syndicate. The syndicate managers may consider it necessary to allow three months in which to sell enough securities to close out the business and disband. On the other hand, if a large demand from investors is anticipated, due either to the popularity of the securities or the low price or both, the syndicate managers will usually offer for subscription subject to allotment, and will hold the subscription books open only long enough to assure more than enough orders. The recent syndicate offering of $80,000,000 American Telephone and Telegraph Company Collateral Trust 5 per cent bonds at 98 was subscribed for two or three times over before the books could be closed. As a result, only the small subscriptions could be allotted in full; in fact, orders for $10,000 of the bonds were scaled down to $2,000, and allotments were made on that basis. The result was that the great majority of the bonds were distributed in small amounts, ranging from $1,000 to $5,000, and the disappointment among investors was so keen that nobody was satisfied except the applicant for $1,000, who received his allotment in full. Such a demand arose for the bonds that they sold shortly after at 102 and interest. While this situation sharpened the disappointment of many larger subscribers, it must be remembered that if everybody had been allotted his full subscription the issue would not have had such a sudden appreciation in market value. Where the selling is slow the time limitation may expire long before the syndicate can be closed. In these cases it is either extended or a new syndicate formed, often with the injection of some new members and some new spirit. If, however, the investment market does not take kindly to the issue, and there seems to be no chance of effecting the sale of the bonds, the syndicate is dissolved and the members buy their pro rata shares. A TYPICAL CASE The recent French Loan, amounting to $100,000,000 in 5% per cent secured notes, convertible into 5 per cent twenty-year bonds, was financed by a syndicate of the most powerful of American banking interests. In addition to the original group, there were numerous participants throughout the United States. The loan was offered in every financial center of any importance in the country, and the syndicate itself was represented by banks and dealers in those centers. Every subscription entered was reported to the syndicate managers when received. Within a very few days the books were closed, and the allotments were announced on the basis of 100 per cent for subscriptions of $100,000 or under, with a scale down for larger amounts. The bonds have since sold very close to the issue price, indicating that the issue was a success, though perhaps not an overwhelming one. Investors will no doubt show much more enthusiasm over foreign Stocks & Bonds RAILROAD, INDUSTRIAL AND may be purchased through us outright ODD LOTS 100 SHARES Your mail or telegraphic orders will receive careful individual attention. We will suggest a list of investments which at present prices yield a liberal income. It will simplify matters if you give an approximate idea of amount you contemplate investing and whether you wish to purchase outright or otherwise. Write for List No. 46 of "Investment Suggestions" SHELDON-MORGAN Since 1865 Even before the Great Eastern successfully laid the first Atlantic cable and the telegraph and telephone were yet limited in their scope, we served investors. Since that time, a great many individual investors and banking institutions have used our services in purchasing investment securities. If you have funds which you wish to invest, of either large or small amount, we shall be glad to give you suggestions out of our experience in regard to placing them to best advantage. Your bank can advise you about us. Our booklet, "Investing $100 to $10,000," will interest prospective investors as well as those more experienced. Write to Department "C," 41-43 Exchange Place, New York, or 12-14 South Calvert Street, Baltimore. Hambleton & Company BALTIMORE WASHINGTON NEW YORK Syndicates (Continued) government obligations when the question: of victory more clearly resolves itself. This very simple outline of the nature and purpose of syndicate operations does not attempt to explain many technical details. The details would hardly add to the clearness of the above exposition. With a complete understanding of what a syndicate is, it is to be assumed that the investor will recognize the essential point, namely, that syndicates are not all of them successful. QUESTION AND ANSWER Q. I own some Canadian 5 per cent bonds due 1926, and have great faith in all Canadian securities. I hear now that Canada will float a new loan. If this is so, any particulars will be appreciated. A. The Dominion of Canada is offering for subscription $150,000,000 20-year 5 per cent bonds, maturing March 1, 1937, at the rate of $960 for $1,000 par value. The bonds are offered subject to allotment, payable as follows: 10 per cent on application. A full half year's interest will be paid on September 1, 1917. The net return on the investment will be approximately 5.40 per cent. The proceeds of the loan, which is an internal and not an external obligation, will be used for war purposes. The external loan, maturing 1926, is selling around 974 and interest. An attractive opportunity is afforded investors in this issue to buy the bonds on a partial payment basis. The bonds are not available in less than $1,000 denominations. Practically any investment dealer can give you further particulars. Free Booklets for Investors Many of the investment bankers publish booklets and literature for the information of prospective investors. The following is a list of booklets which may be obtained by writing to the investment houses issuing them, mentioning The Outlook, or by writing direct to the Financial Editor of The Outlook: Current Issue of "Bond Topics" and booklet entitled "Is Interest Return an Index of Safety?"Circular O-315. A. H. Bickmore & Co., 111 Broadway, New York. Farm Mortgages-List No. 58. A. G. Danforth & Co., Washington, Ill. Public Utility and Municipal Bonds-Bulletin No. D. Bond Department, First National Bank, Milwaukee, Wis. Booklet "Investing $100 to $10,000," Hambleton & Co.-Dept. C-41-43 Exchange Place, New York; 12-14 South Calvert St., Baltimore. Profit-Sharing Timber Bonds-Booklet T-214. James D. Lacey Timber Company, 332 South Michigan Ave., Chicago, Ill. Diversified $100 Bonds-Circular C 48. John Muir & Co., 61 Broadway, New York. Booklet "The Dairy Farm Mortgage" and list. Markham & May Company, 1227 First National Bank Building, Milwaukee, Wis. Guaranteed First Mortgages-Booklet O. The Mortgage Guarantee Company, Los Angeles, Cal. Public Utilities-Circular Z-58. The National City Company, National City Bank Building, New York. "Bonds of Our Country "-Booklet L. New First National Bank, Dept. 12, Columbus. Ohio. Diversified Investments-Circular No. 982 Z. Peabody, Houghteling & Co., 10 South La Salle St., Chicago, Ill. First Mortgage Bonds-Circular O-4097. Redmond & Co., 33 Pine St., New York.. "Investment Suggestions "-List No. 46. Sheldon-Morgan & Co., 42 Broadway, New York. A New Plan by Old Interests." A Share in the Substantial Profits of legitimate timber investments in selected regions under our "ironclad" conditions is now available even to the most modest investor through LACEY Profit-Sharing Bonds The opportunity to make unusual profits while fully protected against loss has heretofore been confined to a few large and experienced timber in vestors. These 1st Mortgage Bonds have been devised to split up into smaller units the same type of notably profitable timber transactions carried on with unbroken success for large investors by the widely known Lacey interests for 37 years. Denominations $100, $500, $1000 CONSERVATIVE INVESTORS WILL BE INTERESTED IN THE VERY CLEAR EXPLANATION OF CERTAIN EXCEPTIONAL CONDITIONS IN BOOKLET T-214. HOTEL PURITAN Commonwealth Ave. Boston THE DISTINCTIVE BOSTON HOUSE Globe Trotters call the Puritan one of the most homelike hotels in the world. Your Inquiries gladly answered OT-Costello-Her and our booklet mailed. Dr. Reeves' Sanitarium A Private Home for chronic, nervous, and mental patients. Also elderly people requiring care. Harriet E. Reeves, M.D.. Melrose, Mass. NEW YORK CITY Hotel Le Marquis 31st Street & Fifth Avenue Combines every convenience and home comfort, and commends itself to people of refinement wishing to live on American Plan and be within easy reach of social and dramatic centers. Room and bath $3.50 per day with meals, or $2.00 per day without meals. Illustrated request. Booklet gladly sent upon HOTEL JUDSON 53 Washington Square adjoining Judson Memorial Church. Rooms with and without bath. Rates $2.50 per day, including meals. Special rates for two weeks or more. Location very central. Convenient to all elevated and street car lines. "INTERPINES" Beautiful, quiet, restful and homelike. Over 26 years of successful work. Thorough, reliable, dependable and ethical. Every comfort and convenience. Accommodations of superior quality. Disorder of the nervous system a specialty. Fred. W. Seward, Sr., M.D., Fred. W. Seward, Jr., M.D., Goshen, N. Y. RECREATION SCHOOL For boys who must tutor. Breaks the long vacation with 5 weeks' profitable study. The exceptional equipment and delightful location of the Abbott School provide incentive to study and endless varieties of recreation. Opens July 18. FARMINGTON, Maine. YORK CAMPS LOON LAKE, MAINE In famous Rangeley region in heart of mountains facing lake. Private log cabins with open fires, bath and hot and cold water. Central dining-room. Golf within easy reach; garage, automobiles and horses to let. Boating, bathing, fishing, mountain climbing. Booklet. J. LEWIS YORK, Prop. SEBAGO-WOHELO A Girls' Camp on Sebago Lake Unique combination of lake, mountains and sea. Complete equipment for every phase of camp life. Horseback riding. Crafts. Each girl in the personal care of Dr. and Mrs. Luther Halsey Gulick, Founders of the Camp Fire Girls. Booklet. MRS. CHARLOTTE V. GULICK, Director, South Casco, Maine. MASSACHUSETTS CAMP YOKUM Summer camp for girls, on crest of Berkshires, at edge of a beautiful lake. Competent, attractive counselor for each group of three girls. Best of instructors. Send for catalog. MARY E. RICHARDSON, 134 Firglade, Springfield, Mass. Tel. 1069-W. Summer Camps MASSACHUSETTS SEA PINES Camp for Girls Brewster, Mass. Cape Cod Bay Miss FAITH BICKFORD, WAMPANOAG Eleventh Season Buzzards Bay, Cape Cod An Island Camp for Boys over 14 62 acres, pine groves, sandy beach, protected cove for safe sailing and swimming. Camp Wampanoag Salt Water Camp for Boys 8-14, inclusive Both Camp and Club offer unusually healthful locations, pure water, safe, sanitary conditionsboard floor tents. Land and water sports, boating, athletics, under experienced college men. Prizes. Camp mother. For illustrated booklet address 244 Grand Avenue, Newton Centre, Mass. QUANSET The Cape Cod Camp for Girls Established 1905. Swimming, canoeing, sailing-safest conditions, expert instruction; land sports, pageantry, horseback riding. Ex ceptional equipment and location. Separate camp for little girls. Unusual results in health and vigor. Mrs. E. A. W. Hammatt, 704 Commonwealth Av., Newton Center, Mass. NEW HAMPSHIRE CAMP WACHUSETT For Boys. Lake Asquam, Holderness, N. H. 15th season. 7 buildings. Boating, fishing, ca noeing, swimming. Athletics planned according to physical ability of each boy. No tents. Fisher huts. Music, games and a good time every night. Tutoring if desired. References. Booklet. Rev. Lorin Webster, L.H.D., Holderness School, Plymouth, N. H. SARGENT CAMPS Peterboro, N. H. Dr. D. A. Sargent, Pres. Two camps, Seniors, 14-24; Juniors, 8-13 For girls. All Sports. Horseback Riding and Driving. Canoeing and camping on picturesque lakes. Monadnock and other mountain trips. Water pageant. Safety and health our first consideration. In spite of greater expense our rates are not increased. Address Secretary, 16 Everett Street, Cambridge, Mass. FOR Camp Arey GIRLS On Kenka Lake, N. Y. A Camp of individuality which develope s sound mind in a sound body. Booklet. Mrs. M. A. Fontaine, Roslyn, N. Y. Kamp Kill Kare Summer Camps New London on the Sound For Sale or for Boys, on Lake Champlain. Illustrated booklet gives full information regarding the character of the Camps and their activities. Recreation camp. Tutoring camp. Optional military drill. 11th season. RALPH F. PERRY, Morristown, N. J. CAMP WAKE ROBIN Woodland, N. Y. ex Younger boys clusively. 13th season. Make your boy happy and strong by outdoor life, including woodcraft, nature study, manual training, all sports and swimming. H. O. LITTLE, Lincoln High School, Jersey City, N. J. 1,000-Acre Hudson River Frontage La Dock, deep water. Livingston Manor house; PACIFIC Coast? For certification rules, etc., send 20c. stamps to Boynton-Esterly Teachers Agency, Los Angeles, San Francisco, Cal. to Lease A spacious house with extensive marine view. Convenient to bathing beach, casino and trolley. Several acres of land with fine growth of trees. Furnace heat for spring and fall. Fire places, 3 baths, 2 extra toilets. Garage. Also smaller cottages for summer lease. WILLIAM ATTRACTIVE BUNGALOW culture, French, German, biology, mathemat S. CHAPPELL, Est. 1887, New London, Conn. FOR SALE Near trolley, high school, stores and churches; MAINE For Rent for Summer Months Located directly on Trout Lake, three miles from Bolton Landing, Lake George. Six rooms with three bedrooms, bath, and kitchen with running water, all completely furnished. Ice, wood, and rowboat included. Will rent for entire season. Rental moderate. For full particulars address 5,807, Outlook. BUSINESS OPPORTUNITIES PATENT your ideas. $9,000 offered for certain inventions. Books,""How to Obtain a Patent" and "What to Invent," sent free. Boothbay Harbor, Me. Send rough sketch for free report as to patent For Sale or to Let for the Season 10-room cottage, bath, town water, electric lights, fireplace, wide veranda, superb view; private boat landing. G. LYMAN SNOW, 114 Federal St., Boston, Mass. Camping in Maine Two furnished camps on shore of Lake Kezar, three-quarters of an hour motor stage ride from railroad station at Fryeburg, on Maine Central Railroad; large camp, 11 rooms, bath, toilet, scientific sewage disposal, also stable accommodating two horses, $375 per season, including wood and ice; and 5-room camp, running spring water, $125 per season, including wood and ice. Preference to party renting both camps. Address F. M. Lawrence, 381 4th Ave., New York THE BEECHES PARIS HILL, ME. York Harbor, Me. THE "BARNACLE" COTTAGE MASSACHUSETTS ability. Manufacturers constantly writing us PRIVATE school. A small, well-established MAN with fifteen years' experience, seven in present position as headmaster of junior school, wishes opportunity to take charge of junior school where successful development will result in proportionate financial returns. 4,803, Outlook. FOR THE HOME DOMESTIC SCIENCE handbook free. HELP WANTED Professional Situations EXPERIENCED English or French nurse for two little boys. State age and send copies of references. 4,778, Outlook. WILLIAMSBURGH Hospital Training School for Nurses. Some vacancies in our school gives an opportunity for young women to take a two years' course of training in a Regents Registered School. Diploma granted upon completion of course and passing examination. Apply by letter or in person to Superintendent of Nurses, 342 Bedford Ave., Brooklyn, N. Y. Business Situations UNUSUAL opportunity for thorough INCREASE your earning power by learn- wholesome activity and outdoor life for boys LAKE SUNAPEE, N. H. nursery, governess and mother's helper for Companions and Domestic Helpers HOUSEKEEPER wanted, May 1, of execu- WANTED-Teachers of English, physical ics, expression. International Musical and Educational Agency, Carnegie Hall, New York. HOPKINS' Educational Agency, 507 Fifth Avenue. Secretary school, $800 year. Governesses, nurses, housekeepers, dietitians, teachers. All high class positions. MALE college graduate with experience, to teach boys about twelve years of age in a firstclass secondary. boarding school, beginning next September. Must be able to teach Latin and be interested in athletics. Send testimonials and photograph with application. 4,800, Outlook. SITUATIONS WANTED Business Situations YOUNG woman, university student, desires secretarial position during summer. Experienced. 4,792, Outlook. SECRETARY.-Young woman, college graduate, with secretarial and teaching experience, desires position for summer. Excel lent references. 4,788, Outlook. Companions and Domestic Helpers A refined woman of pleasing personailty with executive ability desires position as matron in school or college. References. 4,781, Outlook. CULTURED young lady as companion. University education. 4,776, Outlook. EXPERIENCED teacher desires summer position as companion or instructor of young children. Will travel. 4,759, Outlook. POSITION as companion, chaperon, managing housekeeper, secretary. References. 4,769, Outlook. YOUNG lady of refinement desires position as traveling companion for the summer. Sunny disposition. References exchanged. Address Box 24, Camp Hill, Pa. YOUNG man, experienced teacher, refined, musical, traveled extensively, would like position as traveling COMPANION or private tutor. References. Address 4,782, Outlook. FIRST-class maid, best references, yearround country. 4,801, Outlook. Teachers and Governesses EDUCATED athletic young woman desires charge summer girls' camp. Two years' close association with girls. 4,783, Outlook. WANTED-Position as nursery governess, June 1. Elementary music. Highest recommendations. 4,784, Outlook. GERMAN woman teaching English, French, painting, music, as governess, housekeeper, etc. 4,786, Outlook. CAREFULLY educated young woman desires position as governess or mother's helper for summer months. Has had course in home nursing. Could teach beginners in French, German, and music. 4,797, Outlook. HEADMASTER with extended experience in preparing boys for college will tutor several boys during the summer, taking them under his care during the time, or will travel if preferred. He is able to take charge of reviews for coming June examinations, if necessary. 4,796, Outlook. COMPETENT French governess desires a situation. Like to travel. Reference. 4,789, Outlook. EXPERIENCED teacher desires tutoring in cultured family for summer, months. 4,795, Outlook. CONSERVATORY graduate wants charge of music interests in girls' summer camp. Can assist in any physical education. Thorough training in both. Highest recommendations. 4,793, Outlook. CLENDENIN, 120 Vista Pl.. Mt. Vernon, N. Y. Lake Winnipesaukee Address in own handwriting, giving experi by two recent Bryn Mawr graduates. All For Rent "Stonehouse" E. CHASE, 3675 Broadway, New York. For Rent Essex Co., N. Y. 10 acres land. WANTED-Position in girls' summer camp sports, tutoring. References. 4,794, Outlook, MISCELLANEOUS SHAKESPEARE Revival! Play the game "A Study of Shakespeare," indorsed by the best authorities. Price 50 cents. The Shakespeare Club, Camden. Maine. WANTED-Motherless children or infants to board by graduate nurse at her country home. Terms reasonable. L. Trimmer, Rutledge Ave., East Orange, N. J. WANTED-Defective persons to board. Address W., Pawling, N. TUBERCULAR patient can find special comforts on Florida farm. Furnished cottage twenty dollars per month. Box 125, Buena Vista, Fla. CARE of house or apartment sought dur ing owner's absence for privilege of occupancy by responsible lady. References. 4,752, Outlook. YOUR WANTS may be many or few, but undoubtedly some of them can be filled through the use of a little announcement in the classified columns of The Outlook, which are proving every week of decided value to Outlook readers. We shall be glad to send a descriptive circular and order blank on application. Address Department of Classified Advertising THE OUTLOOK, 381 Fourth Avenue, New York City |