The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-10-01
Investing in Stocks.

ON one occasion old JoHS JACOB AsroR,
being about TO sell some apparently first
class securities, was asked by a friend
"How can you do better with the money!
Where will you put it, and he said, 81
shall put him in mine pocket
There are, no doubt, a great many per-
sons in this city, owners of small pieces of
paper representing shares in various rail-
road, coal and other companies, who
would to-day he better off If they had
acted on Mr.. AsToR's principle some twelve
or eighteen months ago. II is a pretty
safe rule that man can manage his own
affairs better than any one else can man
age them for him. II he is SO incapable rs
to be obliged to look to others, the chances
are ten to one that he will ultimately come
to grief. We venture TO hazard the opinion
that OF the thousands of stockholders in
the different moneyed institutions mining
corporations, or railroad companies in this
community. very few would be able TO
give anything like even an approximative
idea OF the exact financial condition of the
companies in which they hold stock. We
will go even further: outside OF the four
or FIVE influential directors, with whose as
slsthuce the lTeslutut OF OtueT cnlei oiHtei
| runs the machine, the board itself is too
| frequently but little acquainted with the
| real situation OF the institution it is sup
| posed TO manage and direct.
How MANY stockholders in banks or
| railroad companies know anything about
| those who represent their interests? At
| the annual election of directors the aver
age stockholder gives his proxy to the
| President or prominent director. Should
he inquire too pointodly rs regards the
| management of affairs or the situation OF
| the finances he would, in nine cases out OF
ten, be looked upon as officious by the very
| persons who arc paid for transacting the
corporate business. He is presented year
ly with the managers report; it may or
may not DO satisfactory, but is almost in
variably accepted
Except in cases OF catastrophe or emer-
gency. the directors concern them, elves
! but little about shareholders. Is 1t SUE
! prisng under these circumstances that di-
rectors frequently adopt policy ca leu
lated TO promote their own interests ut the
| expense of the stockholders; that they do
things which carry along with them great
| opportunities of private sp EQUATIONS that
they make their management tributary tC
the increase of their indvi dual wealth.
When the natural consequences of this
vicious system are visited upon the share
holderin the shape OF deprecntion' loss. and
bankruptcy, he throws the entire blame
on the president and directors, and for
gets that he himself IS primarily response
BILE lie has neglected the most common
duty of looking after his own interests, anc
has tacitly pei united the directors 10 man
age his property as they deemed most Il
their own advantage, without any check ol
supervision on his part. What tradesman
banker, or merchant would look for sue
cess II he condu cted his individual bushes
in the same careless manner, trusting
everything 10 clerks, and permitting them
TO run the machine to suit themselve
without lot or hindrance from him? |
is really matter OF surprise, how many anC
not how few corporations and joint stool
companies ARE well and wisely admins
tered
Where the managers OF n company ar
personally interested, as stockholders, sur
ficiently to make their interests identlcf
with those OF the great body, corpora
, ton has the strongest guarantee OF homes
management that can be well given. Bu
r even in tins case the shareholders are e'
posed TO inefficienoy; and incapable me
, are fully as dangerous as subscriptions mel
Nothing short OF q keen oversight WI
Q keep directors and managers vigilant, mn
o prevent AL improper use OF their fun'
s tions. The prevailing indifference on tn
10 ! part Of stockholders has much to do wit