Evening star., 1924-11-22
ny ROGER w. BABsoN.
Special DIspa tch to The Star.

Special DIspat tch to The Star.
WELLESLEY HILLS, Mass, No
vember 22.-The ability of the in
vestment market to absorb a tre-
mendous and almost continuous
stream of new issues has puzzled
many students Of finance. There Is
at least one good reason for this ap-
parently Unsuitable appetite for
bonds--and more bonds.
We are rapidly becoming a nation
of investors. New bond issues are
very largely put out in 500 and $500
as well as larger denominations in
order that they may have a more
widespread appeal. The fiotations Of
recent years have reached truly ex-
traordinary proportions and the ease
with which new bond issues have
market for investment securities has
by no means reached even q tempo
rary saturation point.
Small Investors' New Status.
Years ago investment by the
masses was carried on through
relatively indirect route. A number
savings bank. The bank then in
vested these combined funds in bonds.
This same procedure Is, of course,
going on today. More and more,
however, the increased attention
given to the small investor is result
ing in direct sales and the JOY of
clipping coupons is today by no
means confined to the man whose
large income puts him in the surtax
group.
The situation brought about by war
conditions must be given credit for
supplying the greatest impetus to
bond buying among the lower
salaried and laboring classes. For
tens. IL not hundreds. of thousands
of residents in the United States
Liberty bonds constituted the first
investment purchase. The sales cam
paigns of 1917 and 1918 in connec-
tion with financing of the war almost
overnight added tremendously to the
number OF prospects for investment
houses. No other method Of educa-
ton in finance could have given any
thing approaching the impetus to
bond buying received through the
Liberty bond campaigns.
statesmen Learn Lesson.
Today American industry in its
ability to obtain readily funds for
improvements and extensions is reap
ing the benefit of this teaching. Bond
syndicates have learned that the
small investor of today Is the big
III diiu SdludDle customer OF TO-
morrow and every effort IL made to
appeal to the man with limited funds
as well as to the wealthy Individual.
insurance company, banking institu-
ton and trustees OF estates.
An interesting experiment has re-
Gently been inaugurated in one Of the
largest cities of the country. A store
for bonds. similar to a store for pro-
visions, dry goods, furniture or any
other product. has been opened. The
man on the street is invited, through
advertisements and window displays,
to come In and buy any bond Of any
denomination that he may desire.
The salesman behind the counter is
prepared to. show his wares and ex-
plain the worth of his offering.
Naturally the goods on display must
be relatively limited. but the Gus
toner can express his desires for
fill his order.
Help to Industry.
Such developments, coupled with
the plan of customer ownership SO
largely used by utility companies in
connection with preferred stock Of
ferings. cannot but have q salutary
influence on investments as well as
on industry. In spite Of the mouth
ings OF certain soap box orators, It
is difficult to dissociate the ordi-
nary individual from some form of
capitalism. The man with a 500
savings deposit inevitably owns a
500 bond In a railroad. utility or
industrial concern or, more exactly
has fractional interest in hun
dreds of such companies. By that
very fact he is just SO much more
interested in political and social de-
velopmentS calculated to safeguard
his investment.
The course of investment 'securi-
ties since 1920 has been most en-
couraging to the novitiate. The old
time bond buyer or financial student
will recognize that the security and
yield of his bond and not the market
fiuctuation is the important factor.
The newcomer in the ranks, how
ever. is as yet unduly influenced by
temporary market fluctuations. The
fact that such fluctuations have re-
Gently been greatly in his favor en-
courages him to add steadily to his
investment holdings. Through Au-
gust the year 1924 has seen almost
steady advance in bond prices.
While the market has shown no ad-
vance since, neither has it declined.
1t has simply been marking time.
Extreme Ease in Money.
Extreme ease In money Is an en-
couraging factor to the man who
has been delaying purchase because
Of question as to possible reaction.
In this connection there are such
factors to be considered as heavy
prospective flotations of foreign
bonds in our market, transfer of GER
tain funds from investment to busi-
ness channels in case Of any worth
while business recovery, and gold ex-
portations. 1t does not appear, how
ever, that any OF these matters will
go to such extremes as to worry the
bond buyer. The man with funds
available should put them to work
earning an income. Aside from any
temporary movement, he can feel as
sured that the progress Of invest
ment conditions over q period of
years will be in his favor.
The path Of the small investor Is
not wholly free from thorns. OBJ
viously there are bad, as we'll as
good bonds. Attempt to get more
than conservative yield, now
around $50 per cent to 500 per cent,
inevitably means acceptance of risk.
It is folly for the sake OF or 2
per cent extra return to jeopardize
safety Of principal. It Is not in
bonds, however, to any such degree
as in stocks that the greatest danger
faces the buyer.
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