The Washington herald., 1913-01-11
The MAN WHO
GREW CAUTIOUS

Copyright 1915. by c. VI. KEYS. New York;
An old man UP State in New York
became frightened a few months ago
as the result of a newspaper article
he read, and determined to sell all the
securities that he had and put his money
in the bank. He made his sales at
fairly satisfactory prices, but after that
he became alarmed and said he had too
much money in the local bank. There
fore, he sent half Of il to an institu-
ton that accepts deposits by mail and
felt safer.
This second bank closed its doors a
few weeks ago. In the course Of time
the depositor will probably get his
money, but In the meantime the old
man is in a terrible state. He came
to the writer not long ago to find out
whether IL was worth while to hire a
lawyer and sue the Banking Department
of the State of New York for wicked
negligence in allowing the institution to
run.
He is so badly scared now that lie is
withdrawing his money from his own
home bank and putting il back into Sc
curities. II anybody adviserd him to
do It he would probably hire safe de-
post baN and put his money in that
but he would be quite sure than an
earthquake or something lige that would
happen before ne got II out
When # came to talking about how
he was going to use his money for the
next few years, the discussion was al
most painful. Even the staple class Of
securities that one can recommend for
the most nervous investor seems to hold
terror for him. Farm mortgages and
mortgages on the homes in his own
community were discarded almost i'm
mediately as possible uses for his money.
Standard municipal and railroad bonds
seemed very little better.
Finally. II narrowed down to a select
and very difficult little group Of short
term municipal and railroad bonds and
notes. He had to he shown in each case
first. that the security was due to ne
paid 1T par within three years: second,
that the corporation or city issuing the
bonds had never deiauIted on principal
or interest OF any OF its securities: and
third, that its securities would be con-
sidered satisfactory by very critical
banks and insurance companies. Every
item that he now owns Is of record IN
the State of New York Insurance De-
partment report as being owned by at
least three well-known insurance COM
panies
The state of mind OF which this in
weston found himself is really silly when
You come to analyZe il: but yet il is
extremely human and in the banking
business one has to allow a great deal
for simple fundamental human factors
like fear. folly. old age. and suspicion.
A feeling of uneasiness is quite sufficient
reason to advise any one to sell the Sc
curity that causes the feeling: and any
good bond salesman knows that 1t IS
very poor business on his part to coax a
satisfactory customer into buying any
thing about which he has an unpleasant
impression il that impression is only a
whin-
II any one feels uneasy and uncertain.
II Is not at all difficult in ordinary cases
to find good investment bonds and stocks
that will remove that feeling. The pub
lie impression that the buying of invest
ments Is a difficult and technical job is
not nearly so true to-day as il used to be
Facts and records are much more COM
plete than they were ten years ago. In
addition the market offers very much
greater variety than 1t did at that time.
Formerly one had to choose pretty
broadly between long-term bonds and
stock. Nobody expected to get any very
large variety in either. During the past
decade. however. even the best corpora
lions and municipalities have been
Obliged to adopt new forms and methods
Tor their financing, with the result that
one can to-day go into the market IL he
likes and pick UP good standard securi-
ues To mature in cash at almost any
future date from one month to twenty
nVe years or more, that are as certain as
any human thing can be certain To nav
their principal and interest when due
and TO be satisfactory so far as human
Judgment can foresee, as long as they
are held.