The Marion daily mirror. (Marion, Ohio) 1892-1912, 1908-01-24
NEW KIND Of BANKERS ;
Breaking Away From Old Style
Financing, They Serve Small
Investors Only.

tUuOvaUOUs sVesSo~oSo '" s"Ss''S34 -
Providing Capital For tndustriaI Un-
dertskinss to Gain Freedom From,
Wall Street and Big syndicates--Msn
Who Showed the Public How to Do
It's Own "undsrwritino."
Last years panic prices for stocks
and the temporary dlstrust 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 in.
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.O0O.O0O syndicate.
For Small Investors Only.
And now there has come into the
realm of finance kind of banking
house or fiscal agent that caters solely
to the small investor In Industrial un
dertakings. Two Of these, the 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 Debcnture
Corporation of New York. In both
cases the limit OF Individual subscrlp.
tlons is 100 tel. dollar shares.
or course Wall street and the men
composing the banking syndicates.
which have heretofore had a monopoly
of financing new undertakings ana of
reorganizing and watering old ones.
looked with disfavor upon the Ster-
ling's methods. Nevertheless it 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 up this enor-
nous business. Neither or them was-a
banker to start with. They were men
with ideas. They make the soundness
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 OBJ
tanned. Speculative undertakings are
barred absolutely.
One Of these men Is G. II. Middle
brook. the president Of the Sterling
Debenture corporation. and the other
is +. w. Shumaker. the secretary and
treasurer. They have shown the pub
lie how TO do its own underwriting.
Mr.. Shurlaker is responsible for more
wholesome innovations In finance than
have been introduced before In gen
Grafton.
The method adopted by the Telepost
company of rewardlng pioneer stock.
holders without resorting to any form
Of stock watering is an example. The
plan is simple enough-so simple that
no ono ever thought of It, before. II
consists In distributing surplus earn
ings above dividend OF 10 per cent to
all stockholders alike among the pur
chasers of the first $4.000.000 Of the
company's stock.
Actual Value Versus Water.
This distribution Is In the form OF
construction debentures representing
actual investment of surplus earnings
In improvements and extensions. II
the railroads had adopted this plan
fifty years ago they would have avoid
ed nearly every later evil In railroad
financing and manipulation.
Another of Mr.. shumaker's ideas Il
the allotment of the Telepost com
pany's stock among the states on the
basis of population. This secures o
geographical distribution very valuable
to public service corporation whose
| greatest asset Is public cooperation
and good Will.
A separate department of the Ster
ling corporation's business Is banl
and trust company stock exchange
that takes orders for and sells the
| shares OF such institutions from Maine
to California. Almost any bank stocl
that anybody wants to buy or sell II
handled by this department In small ol
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 meI
with millions have had In the past.