Shoshone journal. [volume] (Shoshone, Idaho) 1884-1931, 1922-07-07
REVIEW OF FINANCIAL cok0i-
TON
(By Robert E. Smith, President, Lum-
bermens Trust Company Bank, Port
land, Oregon-)

Politicians may come and go, schools
of different political thought may wax
and wane, but the economic law works
on and on slowly as grind the mills
of the gods, and not less inexorably-
One of the fundamentals of this law
is summed up in the familiar phrase
supply and demand.
Never before in the history Of the
country has there been SO mucn mon
ey available for investment-not only
is it available, it is demanding invest
ment; hence the supply Of investment
securities which are being constantly
distributed Indications are that this
distribution is de-spread among
nriyate and individual investors, and'
-s;nce MANY of the securities offered
are those issued by public utilities,
industrial and building corporations,
this fact entails closer relationship
between individuals and large busi-
ness corporations. and therefore
saner outlook on the part of indMid-
uals upon corporate inuuences on and
in affairs.
Investors are constantly searching
for securities which will bear all their
investigation and emerge triumphant
worthy Of being labeled with both OF
the adiectives: safe" and ''remunera-
tive. Care should be taken first of all
by investors that the distributing
house through which they deal has
we'll founded reputation for conserva-
tism and that it possesses a stainless
history as regards the securities It has
dealt in and distributed in the past.
A house with s1ch reputation and his
tory will not lightly jeopardize them
by offering doubtful bonds. Then the
prospective investor should estimate
before purchasing the nature and kind
of enterprises back of the bonds and
their place in the industrial world,
their real and potential value as in
tegers and the principles which pre-
vail in their present conduct as well !
as their past management. If he can
establish to his own satisfaction that
the new issue" is not necessitated by
past errors of judgment or manage
ment, then he is justified in looking
ahead and deciding whether or not the
enterprise is facing a consistent and
uourishing future. If he finds this to
be the case, he may lay aside worry
over such investment and may also
enjoy the consciousness of having con-
tributed through his investment to the
public good.
hotels. office buildings and apartment
houses, offers a fertile field for the
floating of securities. Houses which !
make a business OF underwriting this |
class Of security must be experienced
in correctly estimating values; they |
must make no mistake In their pro-
visions for correct and continuous
amortization and in their safeguard
ing OF investors against probable and
even only possible contingencies which
time may develope. The wisdom re-
sulting from experience should count
for much In this sort Of financing and
should be one OF the elements to be
by investigating investors.
Many OF the current new issues deal
is, the service they offer is to the gen.
eral public-such as the gas and cleo
trio companies, the street traction
and the like. They and
their products are necessities in city
life as it is lived today; they grow as
the community grows. and if the con-
sumers of their products are the pur-
chasers of their bonds for improve
ments and capital extensions there is
benefit all around. The bondholder,
10 be sure, takes no direct part in the
mana agement OF the corporation. but ,
)n the other hand, he is free from it's
liabilities also. lie receives a fixed ,
-eturn on his investment and the own ,
srs of the corporate stocks make the q
gains or bear the losses above or be- 4
ow this line. Meeting in such cor {
,oration, capital and labor call a truce I
IN their perpetual warfare and come 4
,lmost into harmony The many bond 4
lolders furnish the capital az reason 4
'ble rates OF interest and thus insure q
continuous employment of labor and 4
tabilize conditions under which 9na 4
" which labor exists and "a me same a
ime make possible p just return ~ b
part % ihe profits 10 these same
workers, who may buy and own bonds
they Ylll 4he movement cannot
pi enFendeF p more wholesome pop
Ilar feeling foYalds thp corporation %
peesIeq feYeg Dressings penf
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