The Washington herald., 1912-06-01
An Adventure Ia Sulphur, OF
investment vs.. Money
Making.
CCopyr,vht 1872 by C. N. Keys New YorE,

CCopyright. 1872. By c. N. Keys New YORK;
The science OF making money Is an en-
tirely different business from the science
of using money, which is investment. A
| failure to distinguish between these two
scientific pursuits Is the cause OF prob
ably 30 per cent Of the unfortunate an
nual loss OF money in so-called invest
ments in the United States.
There was a story, presumably true,
told in a recent issue Of the Wall Street
Journal, which illustrates quite aptly the
science Of money making. Some years
ago a young German scientist named
Frasch got in touch with n capitalist OF
the Vanderbilt group. tina late n. Fl. Nick.
TwOmbly. The German said that he had
devised a plan whereby II would be pos
sible to bring to the surface and make
into a commercial product a great de-
posit Of sulphur that lay about 100 feet
below the ground IN Louisiana. He had
| statistics on the tI2 Of his tongue to show
that while the American production Of
| sulphur, apart from that obtained from
pyrites, was only about 1900 tons, We
had TO import about 10000 tons from
Sicily each year.
Mr.. TwomblY saw, of course, the COM
mercial possibility II the Germans meth
cd could be successfully put IN practice;
but he saw also that the only possible
cessful would be TO spend a good deal
Of money and try it out. He figured the
possible profits or the basis Of an Amer
ican production OF 10000 tons at the cost
per ton that the scientist was talking
about. Then he estimated the cost Of an
experiment. His conclusion was that IL
his proposition was successful he would
make several hundred per cent per an
mum on his outlay.
Therefore he went, ahead or enurse
the money he invested would not have
hurt him IL he had lost IL Neither Mr.
Twombly nor any OF his class OF business
men would risk any appreciabIe part Of
their fortunes on such an experiment as
this. He set aside a small sum OF money.
put the German in charge Of the work,
and quietly awaited the results.
Mr.. Twombly Is dead. and the full
result of his experiment is not yet q
matter Of record. II is OF record, how
ever that the proposition seems to be
commercial success and that last
year the United States produced nearly
100000 tons OF sulphur and imported
only about 10000 tons.
This is an extreme case of the scIen-
tihc use Of money to make money on
a large scale. The chances for sue
cess were probably not more than one
in ten. II success were achieved, how
ever, the profits would be so large as
to make the original venture look very
small indeed.
Obviously such a venture as this one
is perfectly proper use of money on
the part Of a man who can AFFORD to
take one to ten chance to enlarge his
fortune; but II would be the height OF
foolishness for any man to risk more
than a very small percentage of his
money in such a venture. and neither
Mr.. Twombly nor any other shrewd
capitalist would take any such risk un-
less he was personally familiar with
the venture, knew the people who were
conducting it, and stood to get an as
sured square deal In the division Of the
profits II there were any.
Such a venture is not investment. II
is pure business. with a very greatly
exaggerated factor of speculation in
It. Yet II is a fact that hundreds OF
so-called investments" in which the
public Is invited to buy shares are even
more speculative than this adventure
in sulphur, and that most Of these Sc
curities do not by any means carry
with them any assurance to the inves-
tor that he will be treated squarely
that he will know what Is going on
during the development stage. or that
he will get his fair share of the prof
fits II there are any. Obviously, such a
venture as this, taken blindly and on
the advice of strangers, must be a
great deal worse than a one to ten
chance to make nancy.
The investment end Of the parallel
may also be drawn from the experience
OF Mr.. Twombly. When his estate was
probated It became apparent that even
II he was perfectly willing to take a
fair business chance at any time to
make money, he was also extremely
careful in the use andN conservation of
his fortune after it was acquired. The
bulk of 1t was In solid, substantial Sc
curities and property without the
faintest hint Of speculation and with
out the slightest money making char
acteristic about Il. He risked a little
to make much; but when 1t came to
conservation he invested much to make
little. There you have an epitome OF
the parallel between investment and
money-making pursuits.
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