New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-12

~ by the thrifty These funds invested in securities
aid in thousand ways
For many years the investment business of the country
travelled deep of habit and prejudice 1t shrouded
in somewhat Of mystery and false dignity that did invite
direct cooperation the part of the general public.
The buying and selling of bonds is after all very simple
and easily understood business for the buying and selling of
these credit instruments just like the handling of articles
bought for every day
Bonds arc bought wholesale and sold retail and the
bankers and dealers who make specially of this class Of
business undertake build strong organizations
lasts who able anayze the relative of secur
tiles before they purchased for resale the public
Some large investment banking houses specialize in
making distribution through Dealers but as rule those
who buy bonds for resale have sales organizations like
other merchants The dealers and their representatives rem
der great service the nation by their preachment of
sound doctrines of thrift and investment Without these in
vestmen bankers the business machinery of the country
would be inuriousy affected for credit is the very life
blood of our business structure.
The carefully protected credit instrument for GEN
eral investment is bond.
Let consider bond in its simplest FORM borrower
needs large Of money and to obtain that money places
mortgage on his property. The involved is
too great to borrow from any individual 1t is needed
tor longer period than bank could loan it. Hence the
mortgage divided into let say hundred equal parts
and these hundred parts sold different investors who be-
the aggregate the ultimate lenders of the amount
needed.
AS protection to these investors title to the prop
erty on which the mortgage placed transferred to
trustee, usually national bank trust company as
pledge that the borrower will fulfill the terms of his mort
gage and the borrower issues separate pieces called bonds
representing the loan This elementary picture of
The creation of bond The larger the amount involved
the larger the number of parts into which the mort
gage divided Each holder of one of these parts looks
to the borrower for regular payment interest during the
lite OF the bond and for the payment the principal when
it becomes DUE
When the property has value greatly IN excess of the
first mortgage and the general credit the borrower war
rants, bonds sometimes secured bv second
mortgage, by collateral by the general credit of
the borrower alone
When nation, state city desires to borrow money #
offers security the taxing power of the community state
or nation instead of mortgage on property
Bonds usually carry coupons bearing fixed rate of in
teres IN most cases payable semiannuay although the
holders of certain issues receive their interest
quarterly
Creation of Bonds
III ERE is actual case In 81 there was great food
IN central Ohio, and Dayton and other cities in the
Miami Valley suffered Many lives were lost and property
valued at many millions utterly destroyed The future
OF the whole Miami Valley was at stake
Something had be done to assure the people and the