The Intermountain Catholic. (Salt Lake City [Utah] ;) 1899-1920, 1905-03-04
The FINANCIAL SITUATION.


circles during the week illustrates strikingy our
article of last week the business situation This
was the purchase by one of the large life insurance
companies of million dollars worth of water and
! sewer bonds of Salt Lake City. The bonds draw
interest at per cent per annum and the insurance
| company was so eager to get them that 1T paid a
| premium of upwards of fifteen thousand dollars Tor
| them. There we're several other bidders, among
| them some firms who heretofore have been able to
get such bonds both here and in other cities at par
less commission for dsposing of them to others.
The transaction shows that the stocks and bonds
of Wall street in disfavor with investors. The
assets of the large life insurance companies are
being carefully scrutnzed by the public these days
and it behooves the companies to make only such
investments as are regarded with favor by the pub
lic otherwise the result would be loss of patron
age People taking out life insurance policies will
naturally favor the company whose assets are re
garded as the safest. catering to this same pop
ular sentiment is shown by the advertisement of
another large life insurance company, which says:
:'We have no industrial stocks or bonds in as
SETS This is another way of saying that it has
Quit Wall street entirely, and yet this company was
one of the heaviest investors IN Wall street Sc
curities few years ago. Still another large life
insurance company boasts i'll its advertisement that
its assets consist principally of mortgages on real
estate, 'seventy-two per cent of which guaran
teed" This is another way of informing the public
that il does not invest in Wall street
When these large life insurance companies, with
hundreds of millions of assets, managed by the
abest inancers in the country, drawing salaries
far larger than that of the President of the
United States, are so eager to deny any connection
with Wall street, it is clear that they not only
realize themselves the danger of such investments,
but that they also realize that investors generally
regard Wall street investments with disfavor, and
they are using that argument to get the patronage
of the public. 1t bears out our statement of last
week that the era of 'frenzed finance" has passed,
and that the investing public must have some
thing whose chief feature is the safety of the cap
ita invested.
What form of investment offers this feature,
coupled with fair return OH the money, for the
ordinary investor-the man or woman of moderate
Such investors cannot buy municipal
bonds because they have not money enough to take
an entire issue, and the large companies VIII not
part with them When such bonds are bought from
brokers they net investors only about per cent |
per annum which is not enough to afford living
income in these times of high prices. By the
process of elimination there is just form of in
vestment left which fits the requirements, and that
is real estate Money so invested in any fairly pros
porous community, and especially in growing city !
like Salt Lake. is sure to yield fair income, with
an almost certain increase of capital The eastern
Cities even the moneyed centers, are experiencing
the correctness of this view, and real estate has
been steadily rising for some months Such cities,
however, cannot offer anything like the induce
nents of the west and eastern capital is sure to
seek investments here in this line in the very near
future The bond purchase referred to above shows
the faith which the leading financiers have i'll Salt
Lake City and indirectly it shows the faith of the
public in it; because such investments made in
accordance with public sentiment. This insurance
company wanted an investment which would stand
close scrutiny by its policy holders, present and
prospective, throughout the world. The shrewd
inanciers at the head of the company knew that
he bonds of Salt Lake City are regarded every
where as being gilt-edge, and in order to get them
hey paid handsome premium for them
The wise investor will read the signs of tho
lines in these transactions, that real estate gener
lily throughout the country, and in Salt Lake City
n particular, is coming to the front as invest
nent, and that it offers the safest and most profit
BILE investment in the world today.