Evening star., 1927-04-25
MEN AND MONEY
BY NJ. S. Rukeyser.
tCouyright. 1897

| and years springs, in part, from the
fact that the Treasury is releasing
| funds-first, by cutting down the ma
| tional debt. and, secondly, as compared
with peak postwar rates, by reducing
| the tax bill Of the average investor,
| After five years of rising bond quo.
| tations, financiers are beginning to
ask whether the upward surge has
gone far enough. A veteran invest
ment house attempted. to answer the
| question by reprinting an advertise.
ment of its own which originally ran
| in 1901, and quoted bond prices far
above present levels
In spite of the large production in
the mills which grind out new bond
issues, some classes of bonds are at
tanning a scarcity value,
United States Government issues, as
a result of the Treasury policy OF
gradual retirement. are in this class.
and will become increasingly scarce
through the years.
Not Being Augmented.
Underlying railroad bonds, though
not being curtailed in volume, are not
being augmented, and the supply is
not, therefore, keeping apace of the
growth of the country and the eXpan-
banks and trustees, for whom they
are legal investments. This restricted
supply helps to explain the campaign
in New York State and in other COM
wealths to make public utility issues
legal for investment for trust funds.
On the basis of strict investment merit
the best power and light and telephone
bonds compare favorably with rail-
road issues. AS a matter of fact, a
few of the choicest industrials, such
as United States Steel sinking fund
5s, rank with most railroad issues, but
it would be difficult to draw UP a gen.
eral law covering industrials without
the danger Of admitting speculative
issues.
The comparative scarcity and low
yield OF so-called legal investments Is
driving the savings banks and trust
funds increasingly into real estate
mortgages, and there is a tendency
to get somewhat overloaded with this
type of investment.
Facing this problem, George w.
Wickersham attempted to invest part
of the trust funds of Gloria Laura
Morgan Vanderbilt, a miner of whom
he is guardian, in endowment insur-
ance policies, but Surrogate Foley of
New York, acting on the restrictive
legislation covering trust funds, inter-
vened, holding that only legal bonds
and first mortgages could be pur-
chased.
Bonds, which are legal investments
for savings banks and trustees, get an
artificial value, and tend to sell at a
premium over non-legal securities of
equal n1erit-from the standpoint of
safety of principal and assured regu.
larity of income. individuals without
trust funds to invest will therefore
find it in general wise to eschew
legal bonds.
Success Secret Quest Eternal.
The quest for the secret of success
is eternal.
Isaac Gimbel, head of the Ginbel
chain of department stores which his
family has been developing for IS
years, at { iebration in Philadelphia
sought to explain the tremendous ex-
pansion.
IF were asked" he declared. "to
define the thing that helped us crafty
our ambitions, l believe that I could
say that the chief thing was obserya-
ton, and III tell you just what I
mean.
Il was taught, and have been
preaching ever since to my sons and
associates and co-workers, the treas
ur' that lies within the covers of
newspaper. Within the covers of
newspapers of this land or Europe.
which could be bought for a few pen.
MES, | found the answer to my anabi-
tions.
I'VE stored these observations up
In our mind to be used when the op-
portunity offered. We were taught
and have practiced to this day, and
will, we hope, ever continue to prac-
tlce, the use of observation, not limited
to stores, but every line of activity.
so that we might learn from the sue
cessful operation of others
Wen edited newspapers and maga-
zines always are on the bargain coun-
Ter. They are the only commodities
that are regularly marketed for less
than the cost of production. The
revenue from advertising makes It
feasible to sell periodicals to readers
for less than cost.
Two Financial Capitals.
The self-styled worlds greatest
newspaper" asserts that there are two
American financial capitals-La Sale
street and Wall street, Chicago and
New York.
Unquestfonably, Chicago is a great
and growing money center, One of
the large independent oil companies.
which naturally in the ordinary course
of events would have sought capital in
Wall street, recently sold a bond issue
to a Chicago syndicate. availing itself
OF better terms.
Another Chicago newspaper--the
Daily News-has compiled list of
the 10 richest men in Americas Sec
ond city. Julius Rosenwald, chairman
OF Sears-Roebuck & Co., the worlds
largest mailorder house, is first, with
an estimated personal fortune of
S11O,00O,000. The other nine are:
William Wrigley, jr., $50 900 900;
Richard T. Crane, jr., $50 900 900:
Samuel insult. $4,000, 900; Marshall
Field, Sd, S50000,000; Louis F. Swift,
$50, 100000; John J. Mitchell, $780,
000.0 900; Frank D. Stout, $25, 900 900:
John r. Thompson, SIS, 900 900; James
A. Patten, s12 900, OO0
From a world standpoint, there are
now two financial centers, whereas be-
fore the war there was only one-Lon-
don. Now New York has challenged
London for first place, and since the war
has been more active than London In
long-term bond financing. London,
however, particularly since the return
Of Great Britain to the gold standard
two years ago, PLAYS a prime role in
financing ordinary short-term foreign
trade. The London discount market,
where the bills of exchange based on
foreign trade are bought and sold, is
the most important market of it's kind
IN the world. Yet on Iong-term bond
issues New York plays role second
to none.