New-York tribune., 1922-05-07

q. N'tA"
.I.n,stter. The truth IS that many security
..,3;-~ widows and orphans are lett protected
"+... 1s. fortunes on the one hand and by wise
- o9or. an the other. Moreover the trust
arv has been abls.efectlVely TO retain IN
e'"'PI 49, .st.tes Of those wise enough not only
''', ,..vs property 10 their heirs but also to
h.n;nd p systematic process for admin
,stering tie estate
~. ware Garner, the small business man
+he individual OF whatever sex VINO
~r. slightlv more than living wage ana
1a,.s ;rteIljeently to conserve this dlfhcultly
I,~i.od eurolus-hs Is the small investor to
-, 4rs7ee has ar obligation and IN whose
'a+sras protective legislation should be passed
'',e,'. x, ..uso tba average investor does not
.-t.4 Investors, ike football players, diffef
among themselves IN thousand suoC'e ways,
90. the growing army Of individuals OF slnsH
means who are coming regularly 10 pace lui'0S
,n+o secnrities Is composed Of men ana women
,to ebere many characteristics IN common.
~. ,,,an investor wants 10 get the maximum
,.s,a consistent with safety, but he Is far more
'.,..~ne8 ,rf.h security than his critics admit.
4. eroncial editor Of The Tribune, the writer
.o.s t2 400 letters year from security buy
~. which give clew 70 the collective mind or
inyestors.
To be sure, the forces that tend TO frustrate
,is oorroses are internal as well IS external.
Ar,org The latter there are, first, political ele-
,.o7ts who would attack corporations for the
p,ero low Of doing 80 and, further along the
are n radicalAro, those who would abolish
nri,a+e 7ronertv. The Socialist, however, is
4L-,, Ao t>7yN
e.eer or the blue-sky promoter. AS matter
of fact. the chances are that the Socialist Of
the rarlor type derives the leisure which makes
il pcssble for him to discuss Socialism from
Ire fact that he himself "a q coupon clipper.
He would probably be among the first to Ell
gage expert counsel to defend any attack on
his immediate property rights under the pres
e7t system, though, Ike many others, he would
gladly and with sincerity relinquish his special
claims on society for the attainment Of Don
NarQuis's "Almost Parfect State"
] he bucketeer. who may or may not deal IN
lgb grade securities, is less menace than til.
blue-s1y promoter in times Of rising security
rciccs such as the present, The bucketeer is
9retcndcr who seemingly goes through the
various processes Of brokerage, but who In fact
only shams. The bucGeteer profits by taking
position in the market opposite his custom
ers He makes all that his clients lose, bu.
- co the ordinary security purchaser operarea
4 'inly on the theory that prices will rise thc
iuc&eteer withers and fades away during
bulI movement, That is q fundamental expla-
ration Of the great period Of alleged broker
age failures through whicn we have recently
YSssed though In the list Of uortalities soYne
collapsed for reasons whicn reflect more or
tae.r judgment than on their ethics
he blue sky promoter, on the other hand.
b. mes more dangerous as business improves.
? profits, about whic7 he speaks so freely,
/ me att2inaole. The bIue-sky promoter is
he business Of selling his fanciful dreanas
se builds great Industrial structures in his
il' glpatloa, and he sells stock certificates rep
ss ntjng part ownership in them TO strangers
rTA comprise the gullibIe public In exchange
for hard cash or legal tender he gives neatly
engraved certificates of stock To satisfy the
appetite for bargains he frequently sells shares
Yhch he calls preferred and gives in addition
common shares as bonus. His liberslity ap-
peels tremendously 70 the instincts Of xhoss
Who yearn 20 get something for nothing, but
the overhead cost Of the bonus stock involves
only slightly larger expense for printing.
The blue-sky promoter operates through? two
B pes Of statesmen, one consisting Of the printed
word and the other of individuals, who some
times in their naivete sctually believe what
Il y are taught to say to potential buyers Of
* ok
AS matter Of business experience, the
Chance Of getting securities that eventually
become good from stock salesman are slight
= worse than the opportunities for purchasing
eA.aaclous drugs from the rowing medicine man
"ho peddles his wares among those whom he
does not know.
b'ue-sky sales promotion is based on the
'nFory that, since the future Is to q large ex-
"''' 0nAnowable, any mans version of what
VIII happen may sound plausible. The blue-sky
promoter srticulates confidently about the
pioH1s that will accrue +if'-- The assump-
'''"S on which such arguments are based are
1AoAAy arbitrary. and in practice ordinarily
prove wholly misleading The security pur-
eraser can never base his calculations merely
"a tAe plausible. 1t is his business to seek out
tie truth.
'Ae unadulterated blue-sky promoter is one
VINO sells nothing but promises He Is easier
stamp out than more refined types who sell
g. sscomnlnation Of tangible property and IN
SaDls promises Thirty-nine states have