New-York tribune., 1921-01-31
AN INVESTMENT MESSAGE
A bit Of history the lesson Of which is
Trade Inflated Dollars Into Debated Investment Sece.

preclated value OF money we are
apt to judge money solely by what it
will buy: Let's judge it by what it
will rent form other words, by what
it will earn. There never was time,
except during short panics, when the
rental value Of money was SO high.
If you try to rent money you either
get itnow as favor or you pay twice
as much as you paid in prewar days.
If money has been so cheap why
has it been so hard to get? And why
has it commanded such high interest
rates? Speaking in a general way,
and UP to only few days ago, the
commercial banks would loan money
only to their own customers
even their own customers were put on
strict rations. Things have improved
somewhat, but money, real money, in
the financial world is still king. No
matter hcw little it's purchasing power
may have been, or still is, in the COM
modify markets it never before has
had such high purchasing power in
the nv ment markets.
y On d cember 20 we first published
this inves tment message:
Perhaps never again will
there oe such bargains in in
W. IN ent securities as the
mark now offers, and so we
say to all, and this means you,
scrape together all the money
you can without borrowing
and buy investment securi-
ties-and buy them now"
We liza We published it many times
since. If you have not needed it yet
you sho' 4 do so now.
Trace back every widespread dis
tl1rpance in the financial markets, 60
ing back if you Like as far as authentic
financial history goes, and see if you
are not impressed with three facts
the first being that long period of
abnormal interest rates is bound to
produce a period of sub-norma] in
terest 1Ates. The second fact which
will impress you is the rapidity with
which + oney rates go from abnormal
to norm i, or even to sub-normal. 1t
is first the call money rates that go
down. and then the time money rates.
Watch and see how long it will be
before call money will be loaning on
Wall Street at go or less.
The third, and the most i'm
portant, fact which will inn
press you is the high market
values reached by investment
securities after such period
as we have just passed
til ough.
There is nothing in history which
entir ly parallels our present situa-
tion, but many preceding periods
throw light on many features of it.
More can probably be learned from
the period between 1890 and 1900
than any similar period. Overconfi-
dence in speculation had been de-
veloping preceding this period
which did not run it's usual course
for the unexpected reason that rela-
lively small troubles if small and re-
mote communities brought here and
there strains on some Of the big Eng
]ish banking houses. In the fall of
1890 it became known that the great
banking house of Barring Brothers
uvas in trouble. Few of the younger
men of this generation know now, or
would even be able to comprehend the
standing and influence of this house
at that time. Time and time again
they had tided whole nations over
during the period of financial stress.
In fact, it was their effort to tide over
the Argentine situation which brought
on their troubles. Taking the world
over, from the summer of 1890 to the
end of 1893, it was series of troubles.
Our own panic, which ended in a
financial collapse, came during the