Evening star., 1937-02-21

CODY OF CleS6 uiUIlCy .1CiluCIo V1tCii
gives the impression. without actually
saving so, that because the 50-cent
Zeppelins (or some other out-of-the-
ordinary issue) have gone up like .
sky-rocket In value. any one can make
his everlasting fortune simply by pur-
chasing mint U. S. stamps from the
philatelic agency.
ITO help the speculator to cash in
on this marvellous bonanza, the loan
company will generously advance him
30 per, cent of the face value OF his
purchases, keeping the stamps for col
lateral. and charging only IL per cent
per annum interest on the balance due.
(Only IL per centD This means that
the speculator Is able to buy on mar.
gin, as in the stock market. All he
has to do is put up 20 per cent of the
price and pay interest on the balance!
Or, In other words, 1t is made very
easy, so easy it Is almost inevitable.
for him to buy five times as many
stamps as he can properly afford.
Before being tempted into COM
mitment Of this kind, the dealer should
carefully consider the hazards. If. for
example, he puts up $3.50 and buys
$1,250 worth of stamps on margin, he
must remember that he has borrowed
thousand dollars at the interest rate
of IL per cent. Year in and year out,
SO long as he wishes to hold the
stamps, he must either put up the
balance due and pay for them OUT
right, or hand over $120 year for
interest.
Consider the approximate status Of
such speculation at the end of eight
years. BY that time, unless his hold
ings have doubled in liquidating value,
he will not even make enough to cover
interest payments. To realize an ade-
quate profit, he must sell for three
times the original cost To make a
really good profit, ne must sell at ap-
proximately four times the original
cost.
And suppose that for some reason
the stamps should fail to enjoy the
expected rise in value. If, for example,
the pressure of IL per cent interest
rate on hundred Of other margin
buyers keeps forcing the liquidation
OF similar holdings. with the resultant
depression in the price. the dealer
might possibly have to sell after eight
years at price which is close to face
value or original cost. In such case.
he will lose almost a thousand dollars
which he has paid out in INTEREST,"
mo doubt some stamps will more
than triple in value during the
next eight years; but it is Just
as probable than many will
not. And where is the man who
can pick the winning issue every time?
The speculator must expect to suffer
occasional or frequent losses, and these
will further offset any gains he may
achieve-not to mention losing the
use of the money in his own business
In the meantime
The foregoing remarks, as the
reader will already have realized,
are concerned entirely with the dealer
who withdraws essential working cap
ltal from his own business in order
TO engage in speculation. It is nat
urally different story for the dealer
who has plenty of idle money in the
bank and does not know what to do
with 1t. For him. speculating can be
an exciting and fascinating sideline,
lnaSmuch as he operates on a cash
basis. with surplus funds. Anticipated
pronts that fail to materialize will
neither hamper his business, destroy
his credit standing, nor inf1ict heavy
losses in interest payments.
We are writing. moreover, from the
long-term point of view. The stamp
speculator Eay profit handsomely for
while. when the bull market is
going at full tilt But that is beside
the point. We have never known
OF ans outstanding success. achieved
over period of years. by any dealer
who took to speculating with his
working capital.
When prices ease of from the swift
advance of boom periods, and the
spectators all begin unloading at
once. the final chapter of this story
Will be written. And at that time.
we believe, many an 'erstwhile specu-
lator will say to himself: How much
better II had devoted all this time,
thought and money to my own busi-
ness and concentrated on the safe
and sound policy of quick turnover
at fair profit"
Life Magazine last week kicked the
Illustrations regulations higher than
the proverbial kite. It pictures half
dozen letters addressed to the Duke
of Windsor. their stamps nakedly dis
played In utter disregard for the pro-
hibition against which collectors have
complained. justly and with abundant
reason, for years.
Meanwhile, the Governments own
stamp catalogue, announced to appear
soon after January l." remains bum
kered. The type has been set and the
cuts engraved, but not one single page
of the proposed booklet has been
printed.
No announcement has been author
lied, but it became known yesterday
that the Bureau Of Engraving and
Printing is overprinting existing
stocks Of Philippine Island stamps
with the word Commonwealth" in
two lines with hyphen between the
second and third syllables.
Stanley Phillips, editor of Gibbons
Stamp Monthly. London. has published
q scathing article on "Philately Gone
Mad" in which he holds up to ridicule
the current craze for f1rst-day covers
the quest for "ly-speck" flaws and
defects, "the curse of the souvenir
sheet and speculation.
Czechoslovakia will issue two stamps
for national philatelic exhibition at
Bratislava; commemorative for the
goth anniversary of the battle of
zborov and for the 150th anniversary
OF the birth Of DR.. J. E. Purkyne,
medical scientist, and child welfare
charity labels showing portraits Of
Bobena Mencova, novelist. and Mrs.
NtaA - r.