Evening star., 1924-09-13
EVERYMAN'S
INVESTMENTS
BY GEORGE r. HUGHES.
Sixty.Ninth Article.
DEALING WITH PEOPLE WHO
MAKE GOOD.

Didn't tell you to buy French SIS
for me when they went below a GER
tain figure? Did you-no, you needn't
answer, | know you didn't. and now
they're above l02. I'm through with
you people-lost confidence in you"
wait a minute. please-let me
check up on your order" pause of a
few minutes; then the telephone con-
versa tion renewed with. I've checked
on your order for French Ss. Our
broker, through some oversight, did
not execute It, We are buying them
Immediately at the advanced price.
They will be billed to you at the
lower price at which they could have
been bought. as you ordered some
time ago. This house or the broker
will take the loss"
Deal With Reliable Firms.
The foregoing represents an actual
conversation recently between an
irate investor and q bond salesman in
an investment banking house. The
investor. customer of the house. had
ordered the house to buy for him a
certain amount of French government
bonds, commonly referred to as
French Ss, when the market price of
the bonds reached a certain price, L
believe it was 10l, or $1O1 for every
500 face value of the bonds. These
French SIS were issued some time ago,
and had long been in the hands OF In
vestors when this customer gave MS
order. Consequently the investment
banking house had to go out IN tne
market to buy the bonds.
Some investment banking houses
! also do a brokerage business. and
have a regular brokerage depart
ment with seats on the New YORK.
Chicago and other stock exchanges.
But this investment banking house
had no brokerage department. IL
passed the order on to broker.
Through some oversight the proher
failed to execute the order. At once
the investment banking house, on re-
ceiving the customers complaint
came back on the broker. The broker,
who had as high sense of his own
| responsibility as had the investment
banking house. Immediately bougn.
the bonds at the higher price anu
paid the difference himself.
Anxious to Aid Investors.
That's what it means to deal with
RESPONSIBLE firms in making invest
ments. They not only can make gooo'
but they are eager to make gooo.
When an investment banking mouse
or a broker receives an oroer ior
bonds that it must go into the open
market to fill, it is called market
order. On such market orders the
broker receives a commission OF $l.oo
sometimes only Is cents-for eacn
s.. 900 in bonds. That's all he gets
| out of it and there's whole lot OF
| work attached to earning that $i.So,
or IS cents. In the instance Described
above the investment banking mouse
did not make a cent. The broker re-
ceiyed the commission. The invest
| ment banking house simply engaged
him to execute the market order
knowing that he was thoroughly reli-
| able, although he did do the very un-
| usual thing of forgetting to execute
this one order However. he willingly
paid the price for his mistake.
! Everybody has heard 1t repeatedly
dinned about, to deal only with re-
| sponsible investment dealers and
! brokers, people who can and Will
make good in delivering the best
they have in honesty and investment
| service. That advice cannot be made
| too strong. That's why 1t Is repeat
ed here in the form OF q little. true
| story.