Evening star., 1923-10-29
BETTER GUARDING
OF |NvESTORSA|M
Visiting Bankers Would Give
More Advice and Also Warn
Against Frauds.
By j. c. ROYLE.

{, There is plenty of money for in
States. That is the general consensus
of opinion among the delegates to the
convention Of the Investment Bank
crS' Association of American in ses-
sion here today. With that fact in
view. the convention is devoting Its
energies toward the safeguarding of
that money, through standardization
of practice among investment houses
and strict enforcement of the ethical
policies of the association.
More Protection Needed.
This purpose is not undertaken
from purely altruistic motives. In
vestment bankers have come to
realize fully that the investor must
he afforded protection from loss II
he is. to continue to he an investor,
and If the marketing OF bonds and
other investment securities Is to be
placed on sound profitable basis for
the originating and distributing
bond houses. Members of both the
outgoing and incoming administrI-
tions of the association declare tkat
the purchaser of investment securities
will be provided with more adequate
protection and more constructive ad-
vice than ever before, and that warn
ings against safe and fraudulent is
sues will be supplemented to the
public by sound basic information on
the principles of profitable investment.
One of the subjects uppermost In
the discussion of delegates is the
strict enforcement of syndicate agree
ments among both originating and
distributing bond houses. Such rigid
regulation: delegates said. would
serve to check the practice of "beat-
ing the gun" in offering issues to
clients and the cutting of syndicate
prices. 1t would also, delegates
claim, serve to obviate participation
poses and stabilize the bond markets Of
the country.
Think Market Firmer.
Many of the bankers expressed the
belief that the quick absorption of
the federal land bank and the Illinois
state issues had placed the invest
ment market on more. favorable
footing, and that there would be a
fairly wide movement in the near fu-
ture In municipal bonds. In this
connection the committee on muni-
Cipal securities went on record today
AS strongly urging that the maturity
Of obligations contracted by states
and their political subdivisions be
strictly limited to the reasonable life
of the Improvement. to provide which
the obligation was contracted. In
other words, the association favors
regulation by which the repayment
of such obligat ton will fall on the
voters who approve their issue.
rather than on future generations
Public utility financing also is COM
ing in for active attention. on the part
Of bankers, in view of the expected ac-
tivity in that investment division. The
changed attitude of the public toward
public utilities. they say. is making popu-
lar the financing of improvement pro-
grams and capital requirements Of util-
ity companies with the investors of the
communities where the utilities are
located, and this movement Is spread
ing widely throughout the country.
German Loan Vital Problem.
The representative bankers assem-
bled here show little apprehension of
the effect of foreign issues, although
it is conceded that such financing is
III prospect. a German loan, it is felt.
must wait on a determination of the
cXtent to which the assets of that
country are to be mortgaged by the
separations question. The fact that any
,oan TO Japan participated in by
american investors probably will pro-
Vide that the money so advanced shall
be spent here will tend to prevent the
sums involved from being removed from
circulation and reinvestment-
The expressions of the officers of
the association on international af-
fairs. however, made as they are in
the National Capital, are expected to
receive earnest consideration from
government officials. This is the case
also in regard to government financ-
ing and high officials of the govern
ment have already had extensive con-
terences with the bankers present
The attitude of the latter is some
what opposed o the issue of tax-free
securities.
Steady Business Expected.
Business In general. according to
men from widely separated sections,
may be expected to continue it's
steady march of progress unless in
rreased wage demands or price ad-
Vances raise hills which will slow it's
pace. The building movement, ac-
cording to President John A. Pres
Oft, has no reached it's peak unless
the wage and material costs have
distance below its apex. Methods of
zeal estate and building financing in
consequence are being vigorously de-
bated by the convention.