The commonwealth. (Greenwood, Miss.) 1896-1923, 1908-02-07
RAP FOR THE TRUSTING
Greater Skill Employed in Fishing for Investment suck
ers" Than Ever Was Used by an Angler in
Entrapping the Willy Trout.
BY HON. WILLIAM BARRET RlDGELY,
Comptroller Of the Currency.

out cOst 10 yourself, lDe nlBNCtl bi"E'
ket price for your holdings This
sounds very assuring; II carries wIth
Il n protective and almost p~aternal al
mosphere and seldom fails to Inspire
in the trusting investor the feellnE
that there Is a strong hand ready to
take the investment off his shoulders
the moment Il threatens TO become u
burden,
This particular phrase is especially
fortunate and typical, by way of Illus
tratiVn, for the eason that II couples
with the word guarantee" another
term which is a warm favoritc with
the word artists OF the get-rich.quicS
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 stronger
than the g%uarantor.
Second. A security only has q mar
ket value in the fair and true sense
of the term where a large demand for
It meets a large supply; there, and
there only. exists an active market
and a genuine market value
Let these two propositions (Which
any reputable banker or broker will
tell you are axiomatic) be considered
separately; There ia no virtue in the
word guarantee" If this simple fact
could have been firmly fixed in the
minds of tho small investors Of this
country they would have been saved
the loss OF millions OF dollars since
our present period Of wonderful pros
pority began. In these days of highly
perfected business organization the
process OF finding out the real re-
Gponsibility of any financial or bust
ness concern has been reduced 30 an
exact science and made available to
all. Is It 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 socalled securities"
Never, Such a supposition is absurd
on the face of 1t and an instance
where IL has been done is not. so far
as | know, TO be found In actual prao'
tiee. Dig down under the guarantee
| of the company which asks you to In
vest your savings and what do yon
| 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 tho
money which you and your associates
pour into it; that Its only financial life
blood comes from the purses of the
small investors and that when the
| stream of vitality from this source he
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
q guarantee" In the literature Of tho
"ge~t.rich.auick' concern simply means
| that It has something to sell you. Gen
| orally II Is also an invitation to you 10
nay In advance for the flowers to
adorn your own financial funeral
As to the other pet phrase: High
est market yalue"-or market value
of any kind for that matter--a very
few words will suggest the situation:
Excepting where n very large de-
mand meets a very large supply In u
free, open and comparatively I'M
manipulated market, where sales are
regularly made Of record and those
records command the respect and con.
6dence of the legitimate financial pub
lie. there Is no market value save
that which IA arbitrarily mhde by tho
broker. lie Is the market; he makes
the price by the simple process OF
thumbs up" or thumbs dovn!"
The man who Is on the sucker" list
of A wildcat concern receives an an
nouncement that "all indications point
10 the conclusion that next week the
stock of the Honor Bright company
will sell at not less than five points In
advance of the present price" Next
week he gets notice that the predic.
ton OF an advance has proven true. IL
he is unsophisticated enough he re-
ceiyes the announcement with solemn
credulity and credits the author OF the
promotion literature with great acu-
men and shrewd prophetic powers. Ho
figures up the profits he would have
made on the advance and condemns
himself for not needing the advice OF
the confidential advice to buy
quick"
What he does not consider is the
fact that he Is dealing with a fictlt Gus
market where the seller simply mikes
ND his mind how much he will ad-
vance the stock in question and then,
when the time comes, marks 1t up and
makes the announcement Of the
sharp advance" This trick Is turned
not only for the purpose OF getting a
larger price per share, but mainly to
tickle the cupidlty Of hesItating in.
vestors and making sales which other.
wise could not have been made.
Copyright, by Joseph -. Bowlest
Uses Glass for Bread Board.