Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1915-07-09
HOW TO INVEST FIVE
HUNDRED DOLLARS
Scores of Hard-working People Lose
Their Savings Because They Buy
Stocks That the Banks Reject.
They Need Expert Advice.
BY W. YoRKE STEVENSON

A YOUNG immigrant got a Job as n bell
II boy In a downtown hotel not many
years ago. Tic decided that he would not re-
main a bellboy TIL he was gray haired. So
he devoted his spare time to study. lie was
kept so busy that he could not go to school,
and had TO get his instruction by cor
respondenco with an institution established
for the benent, among others, Of such as he.
lie is progressing fayorabiy with his educa-
tlon.
The boy sought to fill his pockets as well as
his head, and he saved his money. He had
accumulated $500 when the agent Of n cor
poratlon whose securities are not listed on
the Stock Exchange persuaded him to buy
four shares at s125 each. This was in Feb
ruary or March. A few weeks later the COM
pany passed its dividends, and at the present
moment It is so near the brink Of bankruptcy
that It is liable to topple over any moment
The boy viii be fortunate II he ever recovers
q dollar.
1t was a cynic or n promoter who said that
fool is born every minute, but It would be
unchartable to call this youth q fool. lie
was trustful, but he was not foolish, or he
would not have saved $500. II he had sought
the advice of experts before investing he
would have been richer today.
When n man sets out to buy horse he
usually takes an expert or veterinary along
with him. When he wishes to purchase an
automobile he is apt to seek tho advice OF a
friend familiar with the various makes Of
machines 1t is the same with the purchaser
Of a boat, a cow-almost any kind Of property
with which he is unaccustomcd Why is IT,
then, that so many people, otherwise well
bn1 xti1I
years when buying securities or real estate?
Tho answer probably lies in mans ever
present gambling instinct and tho hope of
getting rich quick"
Almost daily the newspapers recount the
failures of ny-by-night concerns mining
companies, oil companies, lumber companies
and tho like, with the consequent wiping out
Of the ncsteggs of many little stockholders.
The lures are frequently set out with an
ingenuity worthy Of a better cause. one COM
pany employed Julian Hawthorne as press
expert to use his genius with the pen in de-
scrlbing with gllttering sentences the for
tunes to be made through the purchase of
the stock Of this second Calumet and Hecla."
The business OF the promoters of the COM
pany was to sell shares and not to mine gold.
The fraud soon became apparent and they
and their press agent were committed and
sent to the Federal Pententiary at Atlanta
but their incarceration and the exposure of
the fraud did not restore their savings to
thousands
Sucker Lists" Used by Crooks
It is rare that people in the conservative
financial and business world are involved in
such catastrophes. The list of the feeced is
usually made up of the poorest classes. 1t is
the little dressmakers the ministers, the sun
day-school superntendents, the bell boys, the
servant girls the bootblacks, who fall victims
to the lure In fact. it may not generally be
known, but Is none the less true, that lengthy
lists of tho names and addresses Of persons
who have once purchased shares or bonds of
fake concerns exist and are passed around
among the crooked fraternity, which fattens
off the widow and the orphan These Sucker
lists" are actually rented out at regularly
fixed schedules of prices. 1t is astonishing
that so many persons with $500 to invest
should fall victims to these sChemers, when 1t
Is only necessary to step into any reputable
banking or brokerage establishment and OBJ
tain the best financial advice free OF any cost
whatsoever. Many firms maintain special
statistical departments for the benefit Of in
vestors. In fact, the average banker is only
too glad to guide the footsteps of the small
investor clear of the many traps and pit
falls allurIngly set for him through adver-
tisements. pamphlets and the ubiquitous
prospectus,
1t is obviously to the conservative bankers
advantage TO do this because the stigma of
a failure. no matter how obscure, is apt to
attach to the entire financial community in
the minds of the ignorant. The same holds
good in the real estate field Time was when
the small investor found difficulty in placing
his funds In high-grade bonds because their
denominations were rarely less than $1,000,
but in recent years many OF the great rail-
roads and Industrial concerns, as well as
some municipalities, have made 1t point to
reach the little fellow by issuing bonds in
denominations as low as 800. Foreign Gov
ernments have gone even further during the
present war and are Issuing securities in
blocks as small as $40 With such oppor-
tunites on every side for the safe investment
OF funds there is no longer any excuse for
the tremendous aggregate OF losses yearly
through the fake concerns
At the present time, too, the interest Yield
on high-grade securities Is unusually large,
ranging from 4 per cent. to over per cent.
in numerous issues regarded as gllt-edged
When the return rises above 8 per cent.
bankers are inclined to advise caution as the
bonds or stocks yielding such rates begin to
enter the speculative class. But, as pointed
out at the beginning Of this article, all the
would-be investor need do with regard to
the purchase OF perfectly safe stock or bond
Is TO treat it as he would horse or a boat
and obtain expert advice
A FUTILE HOPE
From the Indianapolis News
one would think that ambitious chauneurs