The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1916-05-18
WHY STOCK IS OFFERED
TO SMALL INVESTORS
LARGE CAPITALISTS GENERALLY
HAVE NUMEROUS HOLDINGS
AND LITTLE IDLE CASH.
Investing for Profit.)


Persons who have not had the OPP
portunity to learn the Fundamental
principles that underlay the employ
ment of capital often wonder why
shares in corporation are offered
them.
Particularly do they wonder why all
such shares are not taken by large
capitalists instead VI being offered to
sa-called small investors.
BY analysing the following facts
the answer will be made quite appar-
emit:
In round numbers, our wealth Is now
about $150,O0O,OO0,O 900.
Our money amounts to about $3,-
100000, 900.
Our population is about 1O0,000,OOo
We have therefore, about $500 of
wealth to each person.
We have about $35 in money to each
person.
Las the answer neen suggested
It must he clear that we have but
very little money in comparison with
our wealth
Also that we create wealth faster
than we create money.
And that money is more liquid
circulates fore freely-than other
wealth.
The tendency of the possession of
money is ephemeral; of other pro-
perty continual.
Most persons have approximately
their share of money, but very few
have their share of other property.
Therefore, some persons have more
than their share of other property,
but not proportionate share of mon
ey.
The large capitalists are the ones
who have more than their share of
other property, but not proportionate
share of money.
The Millionaire and His Money.
The millionaire does not carry
million dollars around with him;
neither does he have it where he can
lay his hands on it.
He has it invested in property, in
companies, where it is working and
earning more money for him, which In
turn he puts at work in a similar way
to earn still more money.
Did he not do so. a very small hand
full Of men would have all the money,
and the rest of us only fragments of
property.
The big capitalist is not therefore,
always in a position to invest heavily
in an enterprise, no matter how good
it may be-.
Were the capitalists able to invest in
new industries, as popular opinion has
it, there would be few shareholders in
companies, and these few would be
the capitalists.
The capitalists are shareholders in
practically all companies, but they are
seldom heavy shareholders They have
their investments scattered in many
companies.
Usually when q rich man dies and
an inventory of his wealth is printed,
it contains a long list of companies of
all kinds in which he was a share
holder--a few shares here, few hum
dred there a few thousand elsewhere
These shares have been acquired from
time to time as he had liquid wealth
money-with which to acquire them
There was, perhaps, no time at which
he could have bought all the shares
or majority Of them, in any company,
no matter how much he may have de-
sired to do so.
When a new company is formed to
conduct an enterprise, it needs money
whatever else it needs to conduct its
business, it must have money.
A part of its shares may be given
in exchange for property to be used
in its business but it must have mon
ey. and to get this offers it's shares to
the public.
We have often seen that the bulk
of our money is in the hands of small
holders.
To get money, therefore, it is logical
that the company should offer its
shares to the small holders of money,
to small investors; and when it comes
to furnishing actual money, the capt.
talists are of this class also. They are
long on other property, but usually
quite shore on ready money.
Notable Examples.
The Standard Oil company is per-
haps the best paying company in our
country, and Mr.. Rockefeller our rich
est man. Yet he owns but small part
of Standard Oil. When he set out to
swing that concern into the saddle of
success he did not have enough money
to do it, and had to let others have
shares in his company. The result is
deems to be for the best interests of
the said city, (taking into considera-