The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-01-23
rnr Arr or 1vrEs1Iye NOVEL.

a. speedily dying out. On tho contrary.
,ho whirlpool is broadening and deepening
and has r,cked into It's vortex n number Of
s.ocgs which have hitherto ESCAPED it's inlu-
AYR The minds Of most Of the operators arc
~ s,,te like that OF the Keely motor victims.
t. which every rumor favorable to their wishes
".ins crrdcncc with them. and nothing is too
Iii ard improhablo for them to swallow.
pr,sers are rcaping q rich harvest, seats In
tho Exchange are in demand. and tho Ey-
cb,nge itself finds IL necessary to enlarge its
Quarters to accommodate its Immense bust
noss What and when the crd will be the
r,ost experienced observers arc unable, and
The most distrustiul unwilling. to predict.
I'm to this time. all tho participants in
the prevailing race for riches, sellers as
we'll as b~uyers-eNcept the few foolhardy
hears who havo sold what they had to buy
In order TO deliver it-have made money. They
COMPRISE not only residents Of tho city. but q
rrcat multitude besides. scattered over the
T,nion, whom tho telegraph and the telephone
brinr into close connection with thoir brokers
hare and enable to operate us IL they were on
the sp1t. That they should be pleased with
their gains is pardonable, but they have no
right to plume themselves upon the possession
Of extraordinary sagacity and skill. Scarcely
one Of them has had any personal knowledge
Of the value of the securities he has bought or
any reason for expecting an advance in their
rrice. beyond what other men tell them and a
vague feeling that the advance was impending.
They took the chances of the future. and have
been lucky. and that is all.
The effect Of these accidental gains Of so
many amateur operators. is, to confirm in the
POPULAR mind. the delusion that specializing in
stocks is an art easily learned and as easily
nrartisel with success. 1t is supposed to con-
sist. simply. in buying things when they are
low and selling them when they are high; re-
CARELESS OF the fact thai to decide when they
are low and when they arc high. involves the
knowledge OF n multitude OF particulars and the
possession Of n judgment perfected by long
experience. In general. the prices of stocks.
Ike the prices Of all marketable commodities.
are determined by demand and supply. but
which OF these forces is going to dominate the
other at n given time. can. by most people, only
be guessed at. In a panic like that of 1893. sup
ply exceeded demand and, in the present
boom demand exceeds supply: but neither
condition was foreseen by everybody. because.
II It had been. it would have been discounted
in advance and never have occurred. A few
leaders. like Mr.. Flower. for example are, in
deed. entitled to the credit OF having discerncd
the coming rise in the market. but their fol-
lowers have gone in blindly. risking their
money on their leaders Judgment. In 1898
men as sagacious as those who are now ac-
copied as infallible %oracles, advised the pur-
chase Of Manhattan Elevated at 1T5 and pre-
dicted for it 200: OF National Cordage at 75.
which has since fallen to nothing of General
Electric common at ia, which ever since has
paid no dividends. and has been cut down to
60 cents on the dollar. Numerous other illus
~trations might be cited to show that gambling
In stocks on the judgment Of other men is as
hazardous as gambling on ones own.
The delusion is equally widespread. hat the
art OF investing money. not for speculative
purposes, but merely for income. can be learned
in a short time. with a little instruction, and
practised advantageously. The writer of this
article Is frequently asked by correspondents.
who do him the honor OF expressing confidence
In his judgment. for advice upon the subject.
An experience Of half a century in attempting
to arrive at sound rules for his own benefit.
has. however. convinced him of the impossi-
bility of the task. At the end OF the half CEN
turv he has to acknowledge that he is no wiser
than he was at the beginning. and that so far
from being able to instruct others. he needs
instruction himself.
1t is commonly said that IL an investor is will
ing to take a small interest on his money. he is
perfectly safe in depositing it in n savings
bank. buying with ii Government or municipal
bonds. or lending it on bond and mortgage on
productive real estate. Savings banks can be
conscientiOusly recommended to the possesSors
Of small sums. but they will not accept large
deposits. nor. indeed. any at all from per-
sons Of considerable means. Government bonds
seem safe enough Just now, but many OF us can
remember tho timp when there was so much
doubt about their ultimate payment that they
sold for 40 cents on the dollar in gold. and it is
only a little more than two years since
tho nation pomn very DpDr nnnDtinp n
currency policy which would have amounted
10 a partial rcpudintion of its obligations. The
bonds Of the city OF New York. payable in gold
aud exempt from taxation. are as safe as any
thing can be, but the amount OF them in the
market is small, most Of them being held by
estates and institutions. In investing in bonds
secured by mortgage OF real estate yielding
or 4 4 per cent. per annum the lender has to
run the risk of his security dcpreciating be-
fore he ran forcclosc his mortgage on II: OF
loss by fire, against which he must constantly
he on the alert 70 protect himself byinsurance;
Of taxes and assessments. which become n lien
prlorJo his: and. finally. Of being taxed 2h4
cr"nnt. On his principal. which will reduce 10y
that amount the income promised him.
Purchasing real estate. out and out. is be-
ii'led ov many to be a good way not only TO
Secure income. but to increase ones capital.
Ire iortirrs gained by the Astors. the late
Amos Il. Enc, the Goe!ct family, the Rhine
lanNrrs. and Il few others like them, are sup
posed 30 uc within the reach Of any one who
VIII buy rca! property anywhere in this vicinity. |
overlooking the fact tina; the cases mentioned
are exceptional: that few men have the talent
and the means 10 conduct operations in real
estate successfully, and that it quite as often
iA!s Is rises in value. AS an investment for
Income. II IS desirable only in large amounts.
thahe'lng with tenants and collecting rents
from them. making repairs. watching taxes.
assessments and assurances. and guarding
against influences likely to do damage in other
ways, are possible with comfort only to men
Who"an AFFORD to employ agents to attend to
me details Of the business for them. while they
0'Fert its general course.
The bonds Of railroad companies. especially
those secured by a first mortgage on the COM
pahIes rondbcd and terminals. are highly es-
ee"hed bya great many cautious capitalists,
VINO arc willing to invest in them at 4 per
"ht' and often at 81 per cent. or less. This
'neS 20 in the face Of the numerous bankrupt
yves OF railroad companies happening every
var ana OF recommendations in which even