The Washington herald., 1914-12-05
THE FORTUNES OF WAR.

fCoTyright. 1914. BY G ". Keys. New York;
On one day in November two manu-
facturers visited banking house in New
York. One OF them manufactures a clay
product. the material OF which comes
from Austria. The other one manufac-
lures saddles. In June of this year both
these men were getting along only fairly
well. the first rather better than the
second. business had been dull. normal
ly. with both OF them.
In November the manufacturer Of clay
products was willing TO confess that his
business had been practically destroyed.
and he did not know which way he could
turn TO revive IT, unless the war came
TO a close very soon and he was able
to resume the importation of his raw
material The manufacturer Of saddles,
on the contrary. had just closed a con-
tract which would keep his plant busy
for five months of its maximum capacity
turning out products sold on the largest
profits that he had been able TO secure
in many years. Thus the incidents Of
war, in which neither of these men had
had the slightest initiative, had depressed
the one and exalted the other.
The incident is of value to the investor
il he will apply 1t to investment mat
ters. There are hundreds of stocks and
OF bonds aflcat in the United States that
represent industries exposed to the same
sort OF viCssitudes that came TO these
two men. 1t does not always take
war to ruin a prosperous industry. and
il does not always take a war to bring
suddenly to some struggling industry
flood OF wealth and affiuence. Incidents
OF a hundred different sorts produce
these same results, and the stockholder,
or even the bOndholder. of industrial
concerns is always exposed in greater or
lesser degree to suddent changes of for
tune, favorable or unfavorable. The war
has merely afforded dozen illustrations
OF principle which all trained financial
economists recognize. but which the pub
lie seems always bound to ignore.
It is said that once, after Andrew Car
negie had sold out his Steel interests in
this country. he remarked to a reporter
that the steel business would always be
either prince or a pauper. By that he
meant that the profits OF the business
depended upon certain indefinite circum-
stances which could not he foretold, and
that the difference between great pros
perity and poverty would depend upon
a small margin of chance. What is true
of the greatest industrial industries Is
also true of the smallest. and it would
seem likely, to some extent that the ele-
ment Of chance grows larger as the In
dustry grows smaller. One might say
that In the great staple trades II takes
almost an economic revolution to destroy
esta ablished lines of manufacture or to
bring it about that they suddenly be-
come extraordinarily prosperous. In the
small manufacturing trade, on the con-
trary, like the making of patented spe-
cialties, patented food products, or prod
ucts based upon secret formulae, little
thing like new patent new formula, or
a new genius In the trade, may make
one company and break another. Thus
the risk, as well as the chance for large
profits. is multiplied as one goes down
the Industrial scale.
The gtst of experience, then, is that IL
one look for safety, one is hardly likely
to find 1t in Perfection in the stocks or
bonds that represent a partnership in
industry. That is in no sense a criticism
Of industrial investment. Most of the
great fortunes Of this and every other
country were made by successful ven
lures in Industrial fields, and probably
they always will be; but It Is coming to |
be an established principle in invest |
nent that the fundamental idea of in |
is not SO much to make money |
IS to save 1t and keep II working at q |
normal rate OF income.
To the Spectator. the whole incident