Democratic messenger. [volume] (Snow Hill, Md.) 1869-1973, 1908-01-25
NEW KIND OF BANKERS
Breaking Away From Old Style
Financing, They Serve Small
Investors Only.

Innovations introduced In Method Of
Providing Capital For Industrial un-
dertakings to Gain Freedom From
Wall Street and Big syndeatss-Men
Who Showed the Public How to Do
Its Own Underwriting
Last years panic prices for stocks
and the temporary distrust Of banks
brought thousands Of small investors
into the stock market Wall street
for the first time took serious notice
Of the investor with few hundred
dollars and welcomed him for the time
being He wasn't liked. but his mon
ey was acceptable In the absence OF
larger sums
Long before this the government IN
response to popular demand, but
against the advice of Wall street.
which had loudly declared that the iu-
novation could not possibly succeed.
had adopted the policy Of popular bond
subscriptions In these the subscriber
for one bond had the same chance as
the $25.0O000o syndicate.
For Small Investors Only
And now there has come into the
realm OF finance q kind Of banking
house or fiscal agent that caters solely
TO the small investor in industrial un-
dertakings. Two OF these tie new
telegraph company. the Telepost. and
the oxford mills that are being built
In New England to make linen for the
first time In the United States. are
financed by the Sterling Debenture
Corporation OF New York III both
cases the limit Of Individual subscrp
lions is 100 ten dollar shares
or course Wall street and the men
composing the banking syndicates,
which have heretofore had monopoly
OF financing new undertakings and Of
recognizing and watering old ones.
looked with disfavor upon the Ster-
ling's methods Nevertheless IL has
gone ahead and now has more in
vestors on its books than any other
concern In the United States
Bankers With New ideas.
Two men have built az this enor
nous business Neither Of them was a
haI2ta~ To- start with They were men
with ideas T'6ey make the souudncSs
OF the business they undertake to
finance and the protection of the share
holders the primary considerations
when that much Is settled they begin
to think Of how the capital is to be obs
tanned Speculative undertakings are
barred absolutely.
One OF these men IS q. II Middle
brook. the president ~ the Sterling
Debenture corporation. and the other
ia-F. w Shumaker. the secretary aud
treasurer They have shown the pub
lie how 10 do its own underwriting
Mr.. Shumaker Is responsible for more
wholesome innovations In finance than
have been introduced before In gen
GRAFTON.
The method adopted ny The Teiepost
company Of rewarding pioneer stock
holders without resortlng To- aus form
OF stock watering is an example The
plan is simple enough $50 simple that
no one ever thought Of IL before II
consists In distributing surplus earn
ings above a dividend Of 10 per cent %
all stockholders alike among The pur-
ehasers of the first S8.00oo00 Of the
company's stock
Actual Value Versus Water
This distribution Is III the form 81
construction debentures representing
actual investment of surplus earnings
in Improvements aud extensions II
the railroads had adopted his plan
fifty years ago they would have avoid
ed nearly every later evil in railroad
financing and manipulation
Another OF Mr. Shumaker's ideas Is
the allotment Of the Telepost com
pany's stock among the states on the
basis of population This secures a
geographical distribution very valuable
to a public service corporation whose
greatest asset is public cooperation
nnd good will
A separate department Of the Ster
ling corporations business IS bank
and trust company stock exchange
that takes orders FOR and sells the
shares OF such Institutions from Maine
TO California Almost amy bank stock
that anybody wants 70 buy or sell IS
handled by this department IN small or
large lots. This Is also a new idea.
But the newest idea Of all is that Of
seeking large amounts Of capital from
a multiplicity OF small investors, cou-
pied with the promise that they shall
have the chance that only the men
with millions have had In the past.
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