The Hawaiian gazette., 1910-09-13
Business and Finance

noated in Los Angeles year ago to
soil lots in "North Goldfield,v a
prosperous mining region" TIE land
was in the middle of the Moiave Desert,
fifty miles from water, and belonged
to the government. But the promoters
made ten thousand dollars in ten weeks
before they were exposed by the news.
papers.
Another thing-selling stock is sup
posed to be means by which a com.
pany raises sufficient money to develop
an industry. 1t is working on a basis
and the prospectus even says So
that if it sells certain amount of
stock, the money thus raised will de.
velOp that industry. Let us see-the
company puts the stock into the hands
of broker or selling company. This
broker or selling company gets a COM
mission and nearly always employs
agents who get salaries and more com.
missions. This comes out of the stock
sales They spend hundreds of dollars
in newspaper and prospectus advertis,
ing. This comes out of the stock sales.
The promoters are meanwhile drawing
fat salaries for their ''work." This
and dozen other things comes out of
the stock sales. In other words it comes
out of the lambs of stock subscribers.
This must not be misunderstood. In
vestment for development has been the
making of America and is advocated
here-not knocked. A certain amount
of advertising is absolutely necessary
but fve-plate polychromes are not.
Commissions are allowable but the sub
scrIber should ascertain what commits
sions are being paid. For their private
information it might be said that fake
schemes pay twenty per cent. on stock
sales when it is selling at ten cents
share, This is outrageous The promo
ter is entitled to no salary until the
company is operating and he is earn
ing it.
Now the fourth and last thing to
be looked out for. The capital of a
company is set at a figure which is
calculated to be sufficient to develop
the company's holdings and leave a
little in the treasury. Nineteen stocks
out of twenty which are sold at ten
cents a share are fakes. For instance,
company needs fifty Thousand dollars
to develop. They would have to sell
five hundred thousand shares at ten
cents to raise it and another hundred
thousand to pay promotion expenses,
even if they were honest and didn It
draw salaries. At the end of two years
they have ten thousand dollars to spend
in dividends out of which they take
half for Culture development" The
dividends would be less than a cent a
share.
The trouble rs with America that ii
wants to get rich too quick.
This lengthy exploitation of facts
which are already known is only set out
because people occasionally forget them
and Honolulu seems to have lost all
| acquaintance with them. The Adver.
tiser advocates the investment of Ha-
waits surplus cash in foreign channels
if necessary. 1t won 7 exactly help to
Americanize the Islands quicker, but
there is no reason why it won It return
money on the investment. The chinook
ing" is not done in a Destructive spirit.
On the other hand it is made as a basis
for constructive suggestion. the earn
est consideration of which this paper
strongly advocates.
1T IS:
That Honolulu emulate the example
of all other cities where money is forth
coming for investment purposes; to wit:
have one of its commercial or mercan-
tile bodies preferably the merchants
association), appoint a committee to
pass on all investment proposition that
are about TO be offered to the public.
This committee could consider all the
inducements which are to be advertised
and Judge them from a business man IS
standpoint. It is to the benefit of ev-
erv business man to protect those of his
community who are not business people
and who support the stock selling
scheme.
This committee could rate the chances
in favor of or against the proposed
COMPANY, impartially. It would GER
taiuly be hard on a great many com
panies but it would save money, homes
and happiness for great many people
People are more important than com
panies.
No promoter of a company who had
a bona fide proposition which he had
faith in would refuse to submit it Il
such committee. Every American in
weston is willing TO play against Ger
tain element of chance or he wouldn y
be an American. AS long as the chances
are reasonable there is no reason why
they shouldn 7 be taken.
However-talk killed the cat.