The Marion daily mirror. (Marion, Ohio) 1892-1912, 1908-01-16
TRAPS FOR THE TRUSTING
Greater Skill Employed in Fishing for Invesment "Suck
ersp Than Ever Was Used by an Angler in
Entrapping the Willy Trout
BY HON. WILLIAM BARRET RiDoetVy Vy1ssausA
8 conptroler AZ ths sr.,rrenev u eGuH p -----

use either of these clever catchwords !
in their corporate titles cannot be |
charged with undertaking. the pull |
ing power" of such phrases; in their
literature this kind of bait is en-
ployed with the greatest skill and
pla,isibility
One of the most common ways In |
which this idea is dressed Is this:
I'VE guarantee you under all condl-
tons and at all times to get you, with.
out cost to yourself, the highest mar
ket price for your holdings" This
sounds very assuring; 1t carries with
It a protective and almost paternal at
mosphere and seldom fails to inspire
In the trusting investor The feeling
that there Is a strong hand ready to
take the investment off his shoulders
the moment 1t threatens to become
burden.
This particular phrase is especially
fortunate and typical, by way OF illus.
tration. for the reason that IL couples
with the word guarantee" another
term which is warm fayorite with
the word artists of the get-rich-quick
studies. refer to the phrase high.
est market value"
Wherever either of these clever sig.
nails to credulity is displayed the pos
sible investor should Invariably re-
member these points:
First. A guarantee is never stronger
than the guarantor.
Second. A security only has mar
ket value" in the fair and true sense
of the term where large demand for
1t meets large supply: there, and
there only, exists an active market
and genuine market value
Let these two propositions (which
any reputable banker or broker will
tell you are axiomatic) be considered
separately: There is no virtue In the
word guarantee" II this simple fact
could have been firmly fixed In the
minds OF the small investors Of this
country they would have been saved
the loss of millions of dollars since
our present period of wonderful pros
perity began. In these days of highly
perfected business organization the
process of finding out the real re.
sponsibility of any financial or bust.
ness concern has been reduced to an
exact science and made available TO
all. Is 1t reasonable to suppose, un-
der these conditions. that any COM
pany or corporation which cannot
stand on its own feet can get any re-
| sponsible concern to guarantee its
bonds or other so-called securities.
Never! Such supposition is absurd
on the face of 1t and an instance
where 1t has been done Is not, so far
as know, to be found in actual prac
| tice. Dig down under the guarantee"
of the company which asks you to in
vest your savings and what do you
find? That II you do invest you and
your fellow victims are really your
own guarantors: that the financial
strength of the concern is really the
money which you and your associates
pour into 1t; that its only financial life
blood comes from the purses Of the
small investors and that when the
stream of vitality from this source be-
gins to dry up the services of the
financial undertaken are in near and
Inevitable demand Reduced to its last
analysis, the black.type declaration OF
guarantee" In the literature of the
"get-rich-quick" concern simply means
that 1t has something to sell you. Gen.
orally 1t is also an invitation to you to
pay In advance for the flowers to
adorn your own financial funeral.
AS to the other pet phrase: High.
est market value"-or market value
Of any kind for that matter--a very
few words will suggest the situation:
Excepting where very large do
mand meets very large supply in a
free, open and comparatively un
manipulated market, where sales are
regularly made of record and those
records command the respect and con
fidence of the legitimate financial pub
lie, there is no market value" save
that which is arbitrarily made by the
broker. He is the market; lie makes
the price by the simple process OF
thumbs up or thumbs down."
The man who is on the sucker" lisi
OF wildcat concern receives an an
| tudt al Doiul
to the conclusion that next week the
stock of the Honor Bright company
will sell at not less than Ave points In
advance of the present price" Next
week he gets notice that the predic
tion Of an advance has proven true, II
he IL unsophisticated enough he re
ceives the announcement with solemn
credulity, and credits the author OF the
promotion literature with great acu
men and shrewd prophetic powers, lie
figures up the profits he would hqys
made on the advance and condemns
himself for not needing the advice o,
the confidential" advice to buy
quick" n
What he does not consider Is the
fact that he is dealing with a fictitious
market where the seller simply makes
up hk mind how much he will ad
vance the stock In question and then
when the time comes. marks 1t up ant
makes the announcement OF the
SHARP advance" This trick is turned
not only fpr the purpose Of getting I
larger price per share. but mainly to
| tickle the CuDidfty OF hositatinr IN