The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1943-11-12
BY ROGER BABSON

NEW YORK CITY.-First let me
speak a good word for the trust
companies and other banks which
are taking care of trust funds. So
far as the law permits they are
doing a good job. Many more par
ents and grandparents should es-
tablish trust funds for those who
are to follow. ''Shrouds do not
have pockets. To die without
will is a calamity. Leave your
children something outright; but
also be sure to put something in
trust for them. Do it today.
People fail to realize how the
market is being cleaned up of good
bond issues. Outstanding bond is
sues are being redeemed or re-
duced rapidly and very few new
bond isues are being put out. This
accounts for the rapid increase in
prices of preferred stocks, while
common stocks are remaining
stagnant. Trustees are being fore
ed either to buy stocks or else
government bonds for their bene-
ficiaries. Certainly there is no
sense of paying banks to invest in
government bonds! A few W Sc
trustees are hedging by buying in
vestment trust securities, fire in
surance stocks and chain store
company preferreds.
My appeal today, however, is not
so much to the banks and trustees
as to my readers, who should get
busy to get state laws changed.
The fact is that the banks may
be tied down too much by state
laws regarding the investment of
trust funds. In view of impending
initiation, instead of all these laws
protecting widows, and orphans,
some of them may be penaGzing
these deserving beneficiaries. Sure
ly, if we are going into a period
of initiation, certain stocks may
be safer than the very best of
bonds. " @H sFs s'!AH@
Another thing: Trust funds are
growing at a tremendous rate. So
far as the beneficiaries are con-
cerned, this is a good thing; but
is it good for the community? Ow-
ing to state laws regarding trust
funds, trustees are frightened of
their shadows. Hence, they put no
money into new enterprises to help
the community or the nation. This
is bad practice. A dog cannot live
indefinitely by chewing his own
tail. A country cannot survive
without continually putting e W
money into new enterprises. State
laws should compel trustees to put
10 per cent of their money into
venture capital''.
We should encourage thrift and
the best way to encourage thrift
is to give fair interest rate TO
those who will save. Interest is
merely wage paid for sacrifice
and saving. The Administration at
Washington, however. is apparent
ly following a direct opposite pro-
gram. 1t has forbidden banks to
pay interest on current deposits;
and it has beaten down the interest
rates on government bonds. The
high tax rates have forced the
prices of municipal bonds to sky
high figures so that thrifty people
can no longer afford to buy these.
While the farmers are demanding
a floor for farm prices, the widows
and orphans of the country should
have lobby and get floor under
| interest rates.
The most honest and safe meth
cd of getting security for old age
is by saving money and taking
care of it either directly oneself
or by putting it into a revokable
trust fund. The present Social Sc
curity program of the U. S. Gov
eminent is questionable. Why? Be-
cause the money which is taken
out of your pay envelope every
week is not saved for you by
| Washington. but is spent by the
government which gives you only