Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1885-11-20
Present Dangers in Investments

capital over ana ABOVE lnc llhilculdle
needs of life is an investor, to greater or
less extent. And this is healthful and
normal condition of affairs for money !
like any other product of human industry, |
is meant to reproduce itself by the process
of usury. If it were not for the reproduc-
tive power of moneS, wealth would not
be even Il relatively permanent condition,
either of society or the individual. A man
or Il community might be rich to-day and
poor tomorrow, according to the neces-
sary expenditures and demands upon
each. If all expenses were to be met out
of certain intlexible capital, there could
be no such thing as a determinate valua-
ton of an individual or community
Expenditure would be like dipping from
basin instead of a fountain the water-line
would be changing constantly.
But the productive power of moneG
keeps capital practically uniform. A man
who is worth seventy-tive thousand dol
lars to-day is worth the same tomorrow,
provided he does not squander his capital
IN dangerous Investments for the de-
mands of existence are met from the re-
productive power of his capital.
There are two classes of investments,
former is the legitimate and natural rate
of reproduction which belongs to money
as a vital and active product of human in
! dustry. The latter is like the forced
growth of a natural product; it is un-
healthful, unnatural and uncertain The
result may be fortunate or unfortunate,
according to conditions which cannot be
foreseen. 1t is possible to gain II fortune
by speculation it is more possible to lose
one.
Conservative investments, then, consti-
tute the only safe class and the only legit-
mate class of usury for money. But con-
servative investments are themselves
liable to fluctuations, which mayo certain
times and under certain conditions, throw
them out of their own class over into the
class of speculative investments. Such a
condition of affairs seems to prevail at the
present time, in this country, with regard
to many investments which are generally
considered safe ; and it is very important
that investors should know the risks to
which they are liable.
1t is noticeable that at no time
since the close of the war have the
rates of interest for loans been so
low us Ut pTcSelJ. MONEY IL freely lOuHttl
on time obligations from two and a half
to three and Il half per cent. As Il writer
in the hunters Mngd:iuC wisely says,
"Whcn standard rates for money are low
large returns dlrdyI mean risk Ac-
cordingly, when small investors are in
vited to place their money where it Will
yield them eight, nine and ten per cent in
tercst in the present state of stagnation of
capital they may well take the time and
trouble to investigate. Any investment
promising to yield above six per cent in
terest at the present time, in default of
absolute proofs to the contrary may be as
sumed to be IL dangerous one. What was
Il conservative investment, and so consid-
cred while capital was active, is now, at
least temporarily, speculative invest
ment involving more or less risk to the
investor.
Three influences are assigned as the
causes for the present stagnant condition
of the money market: The large extent to
which foreign capital has sought our
shores tor investment; the rapid and dis
proportonate increase of wealth. as
compared with population, during the
past thirty years; the very low rate at
which 1t Is possible lOr the lhltcd states
government to borrow money, thus estab-
fishing the standard for the nation.
Either one of the first two influences alone
might not be sufficient to materially
change the status OF the money market,
but their cooperation, combined with the
third and most powerful, cannot fail it
would seem to nave the tendency lndl-
Gated.
1t is more than likely that the day
of large returns from conservative invest
ments is past. Money Is getting to be not
only more plenty but more evenly dis
trlbnted. 1t will still have Il natural pro-
ductive power, but not so great as former
ly, To carry out the parallel between
money and the products of the soil, the re-
turns will still be adequate to meet the
needs of society, but not so lavish and
bOuntiful as when the sOll was new,
fecund and uneXhausted
l'l..