Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-10-05
INVESTING ON FACTS.
Solid Fortunes Rarely Made Through
Gambling in Stocks.
JUDICIOUS BUYING THE THING
That Has Enabled Even Jay Gould to Secure
His Great Wealth.
GOOD CHANCES NOW OPEN FOR CAPITAL
ESPECIAL TELEGRAM TO THE prsrArcH.1

NEW YORK, Oct. Matthew Marshal
reviews the financial and speculative situa-
ton for to-morrow's San as follows:
The suggestion which made, two months
ago. that there was a glut of new securities
on the market, which might possibly have
to be relieved by marking down of prices,
similar to that which the late A. 7. Stewart
used to make when he wanted to get rid OF
unsala Die dry goods, has been shown by the
revelations OF the past few days not to have
been altogether unreasonable. The failure
os c. II. Venner a. Co. of this city, and OF
Turner a Bro. of Boston, are both ascribed
by the members of those firms to their being
overloaded with new water and corporation
bonds. which, though good in themselves,
could not be sold fast enough to meet the
maturing loans for which they had been
hvpothecated.
The officials of the Atchison, Topeka and
Santa Fe Railroad Company openly an
nounce that, owing to the want of a market
for their general mortgage Is, they
deem il more advantageous to pay a COM
mission of per cent for q renewal for two
wears OF their 100000 guarantee fund of
mortgage IS than to pay them. The
Rock Island Railroad Company, too. is
reported to be about to issue some millions
OF short debentures, instead of selling long
bonds it holds in reserve.
FOLLOWING UNION PACIFIC.
Both these corporations only follow the
lead, in this respect. of the Union Pacific,
which, with $4,000 600 of securities in its
treasury. has been obliged to go begging
for three years extension from its cred
ftors on its $40 COlOO2 floating debt. These
cases are only samples of hundreds of others
of less importance which have not come
prominently into notice, because the parties
intercsted-creditors as well as debtors
wisely refrain from making them public
During the flush period which preceded
the Barring collapse of last November the
same sort of enthusiasm which is now rush
ing up the prices of stocks led to the build
ing, all over the country. of water works,
gas works, towns and cities, electric street
railroads. electric light plants. manufactor-
les of various kinds, and not a few railroads.
The money for them was sought principally
in New York and London, and about as
much in one city as in the other Financial
institutions and bankers either bought out
a right the n bonds issued by the companies @ en- en-
vances upon them. A part they disposed of
to investors at n profit, but n very large resi-
due still remains upon their hands awaiting
change III the temper OF capitalists, who at
present resolutely refuse to buy them.
CAUSE OF THE REFUSAL.
That the refusal is not merely due to the
want of value of the securities offered is
city of Brooklyn recently placed her per
cent loan, and from the very few sales of the
best class Of bonds listed on the Stock Ex-
change. 1t is rather, according to my no.
tion. owing to q difference of views between
buyers and sellers in regard to the rate of
income. Thus, while Brooklyn could not
readily place her per cents at par her Is
went at a trifle above par, and whenever
any good investment stocks and bonds are
offered at auction without reserve they find
those which ruled for the same class of Sc
curities two or three years ago.
The fall in Government As from l30 in 1889
10 ll6 now is further evidence to the same
effect This condition of the investment
market must ere long afford opportunities
for the profitable employment o: money far
superior in every way, in my opinion, to
purchasing for a rise stocks about the in
trinsic value of which no information can
be obtained. and which, like Missouri Pa
cifc, can be knocked down out OF sight in n
day by events which can neither be fore
seen nor controlled.
HOW FORTUNES ARE MADE.
All the solid fortunes in existence have
been accumulated, not by gambling on the
Stock Exchange on the turns or the market
but by judicious buying at low prices of
properties which time and the growth of the
country have rendered valuable. Even jay
Gould has made $40 in this way where he
mas made 81 on the Stock Exchange. In
fact, his stock CANDLES have more than once
brought him to the verge of ruin, while he
has been enriched by his purchases of low
priced railroad and telegraph stocks and
their subsequent development into dividend
payers.
/ will not say that the diyidend-paying of
some of his enterprises has not been falla-
ciOus and intermittent, like that of the
Wabash, the Union Pacific and the Missouri
Pacific concerns, but his method illustrates
the principle L have in mind. Whatever
solid property he now possesses consists
mainly of things which either pay dividends
or which he hopes to make pay dividends in
the future. The late Moses Taylor left over
900, which he amassed buying the
bonus and stocks of concerns which were in
difficulties and then bringing them out upon
solid ground. The late Isaac Sherman did
the same thing though upon a smaller scale
than Mr.. Taylor.
INVESTING MONEY ON FACTS.
Among the living 1 know many, whose
names of course 1 must not mention, who
devote their energies, not to watch
ing the tape, but to inquiring
into facts, and who invest their
money upon their own judgement, and not
upon what they fancy is going to be the
course of tO-mUrrow's or next weeks mar
ket. Some become richer than others, and
some of them have at times made mistakes
by which they lost, but all of them have on
the whole, been large gamers. What has
been done by these men can be done, in
measure, by anyone who will take the same
course that they did.
Let man, for example, who has money
which he desires to employ to advantage in
Qulre Of his broker, his banker, of any re-
spectacle financial institution with which
he has relations likely to procure for him
favorable attention, what bargains in securi-
ties they have TO offer, or what opportuni-
ties they know of for profitable Investment
II they show q willingness to negotiate. let
him inform himself of the nature of the en-
terDrise proposed, of the character of the
men who conduct it, and of the facts upon
which it depends for success 1t is often
wise to make personal inspection of the
railroads, the water works, the mines, the
factory, or whatever it may be that the
securities offered represent, or employ an
expert to do so.
PRECAUTIoN is NECESSARY.
Having gathered the necessary data, the |
investor should then sit down and consider
them carefully and make uD his mind unon
them for himself, consulting Others, not for |
their opinions, but for such further informa- |
tlon and suggestions as he may need for |
the formation of his own decision. Indeed, /
1 know OF nothing more unjust to old friends |
than to get their opinions of Investments
and act upon them. If the investments
turn out well, the friends advise is for
gotten: if they turn out i'll, they alone are
blamed.
Let every man be fully persuaded in his
mind, Is the Apostles sound exhortation |
or to put 1t into the vernacular: 'tLet every
tub stand ON its own bottom" The objec-
tion to this method of proceeding is of
course, that it demands much time, patience
and trouble, with certain amount of
mOney-maklng instinct. whereas stock gam
bling Is as easy as going TO perdition.
The stock gambler gives his order TO his
broker and hands him his check and the
broker does the rest, whereas the plodding,
palIstaktng investor puts his own labor and |
brains into the operation. The one wins or |
loses by tie mere caprice of fortune, and
while he deserves blame if lie loses, he is
Tn M nfli |