The Washington herald., 1909-02-28
Use OF Money Better Than
the Making of 1t.
VIEWS OF CHARLES [. sCoVIL
Financial Writer Takes stand that
Good Business Men often Fail
when II Comes to Buying Interest
bearing SecurIfies-shOuId Act on
knowledge and Judgment.
~ CHARLES LEE sCoNIL.

Il mas been wisely said that the selec-
ton of sound investments is largely a
matter Of education. As applied to per
sons setting aside at stated intervals a
rertain proportion Of their earnings. bust
ueSs men carrying over a surplus from
year 20 year. or 10 those dependent upon
the income-producing power OF their
money. tie importance Of this statement
cannot be exaggerated. Further than
this. II is a subject which should be IA
TniIiar topic OF discussion in the homes OF
'EH prosperous people
No man can foretell at what time, or
under what circumstances. he may cease
20 be a factor IN the activities OF this
world II is therefore a positive duty. or
at least a wise precaution. for him 10 IA
milisrize the immediate members Of his
family with the subject OF investments.
Otherwise. as frequently happens. they
may be persuaded. through lack OF knowl-
edge. 10 invest in venturesOme schemes
the money accumulated solely for their
benefit This should make IL perfectly
clear 20 fair-minded persons that Il the
habit were formed OF discussing the sub
ject % investments in the home there
would be a vast decrease in the large per
centsge OF losses resulting from the plac-
ing OF money in unsafe channels.
Big Farmers. but Bad Investors.
Entirely aside from this. there are men
without number who are large esrners OF
money. and who. apparently without any
Gnessiness Of mind absolutely ignore the
necessity Of saving. or investing with
only IS this true. but II Is also frequently
the case that men believe themselves TO
be saving money when they are simply
turning it over 10 Uuscrupulous individu-
ais TO do with substantially as they may
elect \ man or moderate means or one
conducting a profitable business who fails
20 adopt a frugal policy in times OF pros
perity. Geglecting 10 give thought and
study 70 the safe investment OF his sur
plus earnings. usually lays up for himself
II times Of adversely an ocean Of regrets
People should know what sound invest
ments represent. their Affiliations with
progress and prosperity. and their direct
ence Of wage-earners. Our railroads. pub
lie utility and industrial corporations-the
bone and sinew Of every industry in the
coUatry-are distinctly related 10 sound
investments. The government itself and
municipalities rest largely upon this solid
foundation Il takes money, the money
OF individuals collectively. 70 finance and
maintain al OF these interests. While Il
must always be true that some invest
ments viii be more speculative than 9th
ars and that some s0-called investments
viii ever exist as subterfuges 10 extract
money from the unwary. there are prac-
uesl aEd comparatively simple WAYS by
which the investor can learn 20 avoid the
langer spots ard become interested IN
1nly meritOTi0us propositions.
Some Basic PrfncipIeN-
Il IS a recognized fact that in times Of
-reat prosperity inexperienced investors
lsuaTy buy a large number of uudesir-
Ible securities The following are prob
ably the two chief reasons:
First-During such periods the cost OF
living is so very high that investors are
tempted 10 give too much thought TO the
amount Of their dividends OF income.
thus neglecting 70 scrutinize with sufH-
-ient care the quality Of the security 70
3e afforded their principal
Second-Ia times Of great prosperity The
nigh prices for raw materials. uanufac-
'ured products, &c, lead owners and pro-
prietors 70 believe that larger profits could
be made II sufficient capital were avail
able with which 10 extend their respec-
tive fields OF operation.
The natural result is incorporation: IN
many instances based largely upon estf-
mated earnings and dreams Of the future.
As time goes on. and the inevitable de-
cline IN the volume OF business takes
place. with lower range Of prices all along
the line. the inexperienced investor. who
may have placed a part Of his funds in
such enterprises, finds himself to be the
owner Of class Of securities from which
little OF no income Is 10 be derived and
Tor which there IS absolutely no market
II is only after experiences Of. this char
2cter that many investors learn the basic
principle Of safeguarding their surplus
FUNDS, / e, always 20 make the question
of security the primary consideration.
Some Unusual Opportunities
This must not be construed as implvine
that It IS difficult 20 make desirable in
vestments in times Of great prosperity. On
the contrary. during such periods many
congratulated and sound corporations
with whose securities welI-lnformed in
vestors are familiar find It expedient n
become heavy borrowers. chiefly for the
reason that enlarged facilities are essen
tai 20 meet the increasing demands If
their business II the prevailing rates for
money are high, which is usually .be case
az such times. the corporations have no
alternative except 10 sell their securities
A attractive prices It is then that the
: : NNeii-lntorned investor. being in a posi-
-lon 10 follow intellige1tIy the sueges
ions OF the investment banker. whose
,hent ne may be. is afforded unusual in
Vestment opportunities.
TIC writer has 10 intention OF dignity
Rs' by comparison with conservative IN
'eStInents, certain classes o. speculative
-eai estate mining stocks. plantation
Stocks. and numerous other questionable
propositions At the same time. consid-
-ring the hundreds of thousands OF dol
aTs lost BY misinformed investors. II IS
llIncult 10 conceive how one writing upon
ne subject OF investments can pass over
such a dePlorable condition wlthou1 some
comment The writer, therefore, takes
his opportunity Of cautioning HIS readers
against having anything whatever to do
Nth such propositions
Would Not Seek Purchasers.
II the scores upon scores Of securities
which il is claimed by their expopents
VII Yield al the way from S per cent 70
0 per cent annual income we're sound IN
'estments Of permanent and progressive
'aiue, the promoters would experience /
10 difficulty in readily securing capital I
rom reputable investment bankers. OF /
ven from local Institutions When such 1
neu present their propositions keen this 4
h0ught in mind: The reputable invest /
1ent banker. with his special knowledge /
nd years Of training and with the best
experts al his command. I
snnot get for his clients sound invest 1
lents yielding more than from ; Der. cent