Evening star., 1924-08-13
EYES OF INVESTORS
0N[ONDON SESSION:
Easy Money Here Cause ,of'
Closer Watch for Fine In
vestments Abroad.
BY J. C. ROYLE.


NEW YORK. August 13.-Hundreds
Of thousands OF Americans have been
watching the progress OF the London
conference. not as a result of a gen.
eral or academic interest, but from
the point Of view Of personal invest
ment OF funds. At present there Is
tremendous volume Of money and
easy credit available. This has been
shown in the easing Of the money
rates.
1t has tended toward the expansion
OF business operations and the under
taking OF new business and Industrial
enterprises. In the last month sos
good sized new enterprises were
started. with a capitalization Of $572.-
100000. This was an increase in
capital outlay Of $177 o00, 900, as COM
pared with the corresponding period
Of last year.
All Eyes o. Europe.
The easiness Of the money market
has also bettered the demand for high
grade bonds. and since America en-
te-ed the war. the United States has
become a nation of bond balyers In
vesitors are scanning closely the condi-
tions which will dictate the loans to be
aoasted for the rehabilitation of Europe
If the London conference attains it's OBJ
ject. Their eyes have been on both
the fplacing of their own surplus money
and 'son the effect which European loans
may <have In stiffeninG rates on money
availa BILE for business enterprises.
The, investments Of the average Amer
lean have undergone a complete change
in theAlast 10 to Is years. Twenty years
ago tie re were proximately LOO houses
in the. country devoted to investment
bankina Most Of these had relatively
few large customers. such as Insurance
companies, estates and banks. A part
ner Of Sone Of the largest New York
bond hoalses said today that Is years
ago the unit OF sale Of his company
was around $4,000.
Swaepine Changes Noted.
In 1s2E their unit had declined to
$4,000. bu5 the total volume of busf-
ness had increased tremendously.
The wide spread distribution of lib
erty bonds changed the whole trend
of the boRi business. Prior to the
war. 80 per cent OF the people of this
country did not understand what a
bond was. but the sale of liberty
bonds, accom- panied by an educational
campaign, nude bonds popular with
the small investor. Bond houses have
multiplied and intensive sales methods
such as those used in life insurance
have come into use.
During the period of low interest
rates just after the war bond houses
became almost a., thick as corner
groceries, There was stampede to
get into the bond business. This re-
suited in unheaN by conditions and
unsound sales me thods. Many were
induced to buy bonds on the theory
that the securities would be sure to
go up in price and that an immediate
profit could be taken. In fact, there
was an orgy Of speculation in bonds.
Better Invest ments soakht.
That condition had to come to an
end and the reaction began in 1922
and lasted until the fall of 1928
Weak, unsound companies generally
were weeded out, and, with the shak-
ing-doWn process, investors secured
a more thorough knowledge Of bonds,
their value and the effect of their
flotation on the money markets of
the world and its relation to busi-
ness.
This knowledge has been strength
ened by the statistical and advisory
STATS of the successful houses which
survived. The modern investment
banker makes a specially of diagnos-
ing the situation. of the prospective
investor. analyzing his requirements
and explaining the ramifications of
the financial situation.
Hence, investors and business men
of every class ane deeply interested
at present in the prospective foreign
loans and Americas participation in
them, realizing that they have an in
innate bearing not only on future
foreign commerce and trade, but also
on the money situation which will
confront each business man when he
lays his plans for future development
before his own banker.