The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-10-13

II lllu 4ANlluEO - LIJiJl III I'LL y II
exploited which has nof tried TO steal
moral s;:rport under tll. hanie Of some
"guaranty." trust" or "securities"
company. In most cases, perhaps,
these companies arfas thorough fakes
as the company which they are sup
posed to guarantee. and hre the crea-
lures and creations OF the same men.
But 70 many instances OF this shall
low deception have been shown up In
criminal prosecutions that little va
Ration has been found desirable. In
stcSd OF owning q. fake guaranty"
concern, the explolters OF the fake
companies have recently come to re-
gard 1t as better practice to claim
connection with some genuine company
doing general trust busliiess.
This brings Us straight to the prac-
teal point In the matter: Never go into
I'm investment until you first find out
for yDursclf. by direct and rst-hand
Investigation, what the references"
named in the literature or advertising
matter of the company have To say
about 1t. and also how much the refer
cnces themselves amount to.
Promoters OF wildcat Investment en-
terprises have used hundreds OF names
as references which they had not the
shadow OF right to use--caloulating
that persons credulous enough to be
Interested In the proposition would also
be crcdulous enough to gay these ref
erenccs will speak we'll enough for the
enterprise. else their names would not
be given ont for this purpose and to
act without making any Inquiries of
ft!icm. Again. somo man of prominence
a;nd great faith may have been, at the !
Start. n believer in the enterprise and
willing to Say, within certain Hmita-
tons. that lie believed the venture
could be made success IL conducted
according to certain plans and under |
given restrictions. This does not sig |
Nifty that he will Acontlnue to retain
that confidence or that he is willing
to be understood az giving the venture
his unqualified Endorsement or to say
to the public which respects his name
and position. Come and share this en-
terprisc with me: put your money into
1T. for it's a good thing But you
may be sure that his name viii always
be used to create this imprecSon IL
there has ever existed al shadow of
warrant for using IL, under whatever
restrictions.
Therefore. take nothing for granted
with regard to references or other
names which appear in the advertise
ing matter Of d concern which applies
to you for the privilege OF spending
your savings.
But let me place special emphasis
upon the crafty use which these com
panieg make Of thu names and the SER
vices Of reputable trust companies. |
use the word "servicea' because a
trust company may execute a trust"
In connection with bonds, stocks.
property or securities. without really
assuming any general financial or
moral responsibility for those securi-
ties Or without becoming sponsor
for them. In word the trust COM
pany may engage to act as an escrow !
agent to see that a certain technical |
transaction Is completed and nothing |
more That means this: The trust |
conipan. consents to hold the stakes |
between TWO parties but without the
slightest responsibility as to the value |
OF those stakes or what may be done
with them after the stipulations as to
the conditions precedent to delivery |
have been. fulfilled. Because trust |
company acts as the trustee Of a GER
tain bond issue there. is no warrant for |!
a prospective investor 10 feel that the
resources OF the trust company are |
In any sense behind those bonds as a |
guarantee of value. There are almost
as many different kinds of trusts" as
there are different TRANSACTIONS; the
trust company undertakes the respon-
sibllity of doing a certain definite and
particular thing and nothing more.
1t may be to forecIose il a mortgage
Is not paid, or It may be to issue so
many shares of certain stock to
certain person when a stipulated num-
her OF shares OF another issue are
surrendered
But there are very few men even
fairly familiar with business routine !
who do not form an impression that,
somehow the big trust company is
behind the stocks for which it acts as
transfer agent or perform any OTHER |
act OF trustshp. 1t is almost impos-
s!ble to drsse this idea out of the
minds of men who are not really ia
miliar with corporation matters from
IAN inside viewpoint. They will insist
upon attaching to limited service an
unlimited moral and financial respon- |
sihility that does not exist
1t is, therefore, of tire highest pos
stble Importance II you find yourself
tempted to go into an investment, that
you learn from the trust company
mentioned in the literature OF the Ven
ture exactly what trust" 1t has un-
dertaken to perform. IL 1t is really
reliable and established trust COM
pany Win genuine financial stand |
ing it will make the limitations of it's
trust very clear to you; 1t will take
special pains to make you underestimate
for example. that its only function I'M
sthe matter in question and in connec-
ton with the company concerned Is
the purely technical one of seeing that t
a certain issue Of bonds is made "in
form when the technical preliminaries
have been complied with and that 1t 4
does not give an ounce of It's prestige I
or moral support to the bonds them |
selves or stand legally bound for
penny OF responsibility in connection 4
with them Another word of caution: /
Whenever you see the name OF an,
educator. a pastor or a popular poll I
tician or any other leader having a i
hold on the sentiment of a community
used in connection with an Investment i
Offering, look into it carefully and take
no step until the person mentioned has
been questioned directly by you.
. know of an instance where the
poor people of a parish were Nictim-