The Washington herald., 1914-06-06
WHERE MEN FEEL SAFE.

banking house in New York has
as customers quite a large group of
officers of the big Industrial compa-
nies of the United States. II also
has half dozen officers of railroad
companies. One of the heads of this
house was recently asked by a friend
what he thought of the investment sit
uation- His answer throws a curiou.
ilsnt upon sentiment. if not upon con-
ditions In the investment field.
Well" he said. smiling "our in
dustriai people won't touch Industrial
securities at ALL In fact, we have sold
in the past few months considerabI.
| amounts of industrial stocks and bonds
A Few of them have put money into the
banks expecting to buy their secriritie,
back later on, when they feel easier in
their minds. Others. however. have
| bought hish-grade municipal bonds and
railroad bonds. more Of the latter than OF
the former
Then we have quite a group of rail-
| road men who know the railroad busi-
| ness we'll We have sold for them quite
steadily large amounts of railroad stocks
and bonds. They have invested the pro-
ceeds in municipal bonds, industrial Sc
curities and public utility securities, more
in municipals than in anything else
, You can draw whatever conclusion
you like from these facts The conciu-
sion l have drawn is that there is an
underlying feeling of confidence which
leads business men to believe that even
though their own lines look rather un-
certain to them, they know perfectly well
that there is sufficient backbone to the
country as a whole, and when they feel
like letting go of some of their own
securities. they are perfectly willing to
ANUr-
know less. On the whole the vOlum,
of buying is not much diminished as
compared with other and more normal
years"
That is. of course. a hopeful view of
the situation as disclosed by these facts.
The other view might be that known con-
ditions in these various lines OF COM
merce look bad to the people who are in
them, aRd that the only conditions that
look goed enough to justify investment
are the conditions they know nothing
about The hopeful view Is probably
nearer TO a correct estimate of the situa-
tion- When there is uncertainty in your
own business, looms very large and i'm
pressive, it is apt 10 overcome all other
considerations. A good many Of the
things that worry men most in business,
whether they are officers OF railroads or
officers of industrial companies or simply
running their own private business do
not reach the outside at all. and they
are really not important enough TO be-
come market factors to the extent OF
making men buy or sell sound securi-'
ties. Trifiing matters when close at
hand look bigger to the spectator than
big matters far away. Thus the possi-
bility of an advance in the price of flour
might look much larger to the officer OF
a baking company. or a biscuit company.
than even the imminence of a war in
Mexico. or the failure of the railroads TO
get what they want in the matter OF
rates.
The real point of this dealers comment.
is that men, when they seek
safety for their funds, get away from
their own lines of business. There is
good sense in that. If man has the
great bulk of his fortune invested in his
own business. or tied up in the stocks
of his own corporation. II Is merely the
part of common prudence to take his
surplus funds and put them in a position
where they Y i'll be immune from any
hing that might hurt or retard his own
business. Everything is fallible. and IL
nan has all his fortune invested in his
'wn enterprise, or any one pet enterprise,
1e runs the risk of losing it all. or nearly
all. through a single economic disaster.
This is another phase OF the old prin-
.tple of diversity. the neglect of which
las led to the dissipation OF many fine
Ind impressive fortune.
The writer has in mind the case Of
'ery spectacular copper mining man
Who came to New York about twelve
'ears ago as the head of four or five
mining companies in New Mexico and
Mexico. His companies were successful
PRODUCERS of copper. gold and silver. He
vas esteemed a rich man. Conditions.
however, turned against him and his
got into a considerable
mount of trouble He died before
hings were Strengthened out 1t was
ound after his death that practically
lis whole estate consisted of the common
tocks of his own companies He had
un up heavy expenses and when the
ale of his assets was accomplished very
title was left for his estate. lie had
Practically no securities that were i'm
nune from his own business troubles.
That is an unsound principle Of in
estment as one can discover. The
yhole theory Of investment Is to put
money where the vicissitudes OF your
wn personal fortune will not. by them
elves. destroy the integrity of the in
= IL a man makes all his in
estment iH his own business. he should
over mis- investment with life insurance.
or his own death will go far toward
estroying his estate at the same time.
The amount of iron ore mined in the
United States last wear As offictally esti-