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The Financial Department is prepared to furnish information regarding standard investment securities, but cannot undertake to advise the purchase of any specific security. It will give to inquirers facts of record or information resulting from expert investigation, and a nominal charge of one dollar per inquiry will be made for this special service. All letters of inquiry should be addressed to THE OUTLOOK FINANCIAL DEPARTMENT, 381 Fourth Avenue, New York.
SAFETY OR YIELD HERE are as many different kinds of investments as there of two thousand dollars a year, however, conditions would probare styles of women's hats. And just as one style of hat ably be reversed. Everything depends upon the circumstances
may be eminently suited to one woman and absolutely un- of the individual investor. There are so many kinds of investsuited to one another, so there are investments which fulfill some ments to be had, however, that there is no good reason apparent people's requirements and do not at all measure up to those of why every one should not get the right kind. others. A man with an income of a million dollars a year, for Take the man with a small salary, a family to support, and instance, would probably find it more to his advantage to in. scanty savings; he would be foolish to invest his meager capital vest his money in 4 per cent tax-free Government or municipal in a speculative mining or oil venture, where the chances of bonds than to buy 8 per cent bonds of a concern on which he loss outweigh the probabilities of gain by about a hundred to would have to pay the income tax. For a man with an income
The proper investment for him is something as safe as
Revitalizing the Arteries of Trade
"he Federal Government has
proposed to advance the railroads, on account of withheld compensation, and similar items, half a billion dollars within the next six months.
July 1, and is expected to save
Lower prices for coal, it is
These savings are being effected in two of the largest items of railroad expenditures-labor and fuel.
This should materially improve the financial position of the railroads and hasten the time when they can make much needed expenditures for maintenance, improvements, and expansion.
This should have a direct influence on various industries connected with transportation and facilitate the liquidation of a considerable volume of “frozen” credit, which should tend to stimulate business generally.
The recent decision of the Railroad Labor Board reducing railroad wages on an average of 12 per cent. went into effect on
During the first five months of this year the net operating income of the railroads was $90,380,000, as contrasted with $26,400,000 in the corresponding period of last year.
The railroads are the arteries of trade of this country. Their revitalizing is an important step toward the revival of business as a whole.
Guaranty Trust Company of New York
NEW ENGLAND extends an unusual invitation
to lose he cannot afford to take chances with it. So with a woman dependent upon her income; she has no business to take any chances with her capital and her investments should be selected with as much care as can humanly be exercised.
None of this is new. It has all been said thousands of times before, and it would seem as if it were unnecessary to repeat it again. Yet people apparently do not learn the most elementary lessons of investing; at any rate, they seem to ignore these lessons on every possible occasion. Perhaps it is due to the war. Prices are being deflated, money is being deflated, everything except people's ideas. As one man recently remarked, there is little chance that our business and every-day life will be straightened out until we realize that all of us are not entitled to own an automobile, a talking-machine, and a closet full of clothes; that we cannot go to theaters and cafés every evening and spend our summers at the seashore or in the moun. tains. While the war was
on, too many people became accustomed to these luxuries for our own good. Now they are not willing to admit to themselves that these things are of the past, and that the order of the present day is work and more work, followed by economy and saving. These are the things which will save the world in general and the United States in particular. Those people who are living as they were living three years ago and who seem to think some mysterious force is going to set things right can make up their minds that no such thing will happen. Thrift, like charity, begins at home.
Just as our ideas about living need deflating, so with our ideas of what constitutes a profitable investment. People who bought the "war babies" and doubled their money think an investment yielding 6 per cent is beneath their notice. Only a short time ago "everybody” was making money in the stock market. How many are making it now? As a matter of fact, few people are buying. Compare the recent transactions on the Stock Exchange with those of war days and just after the war. Of .late the number of shares dealt in has averaged in the neighborhood of three hundred thousand, which is dull business when a comparison is made with the million and a half and two million share days we had formerly. Dealings in “outside" stocks too have fallen off and the bond market has slumped. Is it because people are afraid to buy, because they have no money, or because they think it will be to their advantage to wait? All three of these considerations exert their influence, no doubt; but is any one of them the real reason? Is it not possible that people are still thinking about the profits of former days and are not content to take a fair and reasonable return on their money? In other words, their ideas about what they should get from an investment are not deflated.
What should one get from an investment, anyway? Should he get large profits or a moderate return combined
to the vacationist this year. The principal Tercentenary celebrations, during July and August, will be of international interest and significance.
Opportunity is offered by New England for every form of wholesome recreation. Plan to spend at least a part
vacation visiting some of the scenes of early American history — Plymouth, Provincetown, Boston, Concord, Cambridge, Salem and Portsmouth, to mention only a few.
The Old Colony Trust Company can be of much practical assistance to those who decide to visit New England. You are cordially invited to make our office your temporary business headquarters and address. And during your stay, whether it be short or extended, we shall be glad to have you take full advantage of our banking, investment and trust services.
The facilities of our commercial Banking Department, in particular, are exceptionally complete, and assure the efficient handling of all matters of a general banking nature. A temporary checking account will afford you much convenience. Our three offices, two of which are in the heart of the Boston shopping district, may be used interchangeably by our depositors. Interest is paid on all daily balances and certificates of deposit in excess of $500.
Our numerous correspondents, including those in the important cities of New England, expedite collections in this Federal Reserve District.
Our modern trust company service is described in detail in our booklet “Your Financial Requirements." You will also find much of interest in our historical brochure entitled “New England-Old and New.” May we send you either or both of them? Address Dept. O
OLD COLONY TRUST COMPANY
Member Federal Reserve System
BROWN BROTHERS @ CO.
Established 1818 4th & Chestnut Sts.
60 State St. Philadelphia 59 Wall St., NEW YORK
A diversified investment at present attractive prices
U.S. Government Bonds
Public Utility Issues
of these securities.
tirely possible that in the long run the bondholder will make more than the stockholder. Which were the more profitable securities of the New Haven, the bonds or the shares of stock? Examples like this are well to bear in mind.
Whoever reads the financial pages nowadays must notice the large number of companies which are omitting their regular dividend payments. All sorts of reasons are given, but the plain truth is that earnings have not been of sufficient size to justify dividends. On the other hand, how many companies are failing to pay interest on their bond obligations?
Suppose you are a stockholder in the Blank Company, and suppose your nextdoor neighbor holds bonds of that company. During the war it was probable that your stock paid extra dividends and perhaps the regular rate was increased. You felt pretty prosperous and rather scorned your neighbor, who got only 5 per cent from his investment. Further, as a stockholder you were one of the owners of the business and entitled to a voice in its management. How are you feeling now? It may be that the Blank Company is not paying dividends any more, and possibly you are worried about the value of your shares. The chances are that your neighbor is not worrying, however, for ten to one his interest is being paid regularly and his bonds are absolutely safe. He bought safety and you purchased yield. You got yield for a time perhaps, but suppose you were to sell your stock now? Would the depreciation in the value of the shares amount to more or less than the dividends you have received? Whose investment is better over a period of years, yours or your neighbor's?
Safety and yield are difficult things to combine, and in most cases it is neces. sary to make a choice between the two. It is for the individual, who is familiar with his own circumstances and pros pects, to decide whether he is justified in risking safety in order to obtain yield or whether he must have safety at the cost of every other consideration. This decision made, it is fairly simple to get the advice of your banker concerning what to buy.
BROWN, SHIPLEY & COMPANY
Established 1810 Founders Court, Lothbury
Office for Travelers LONDON, E.C.
123 Pall Mall, LONDON, S.W.
(Continued) with safety of principal? In other words, which should a man with money to invest consider first, safety or yield? Investing is purely a business proposition and should be regarded as such, and the aim of most businesses is to make money for the persons managing them. On this basis, therefore, the choice between safety and yield should be made.
The individual's circumstances are to be considered. As a general proposition it is proper to say that the more an investment yields the less safe it is, and the investor should decide whether he can afford to take risks with his money in order to increase its yield. Let him picture himself as having lost his money, and such a picture may help him to make his decision. If he can afford the loss, he is justified in taking risks, but not otherwise. Everyone has seen the terms “speculations," "business man's investment," "gilt-edged," and the others employed in describing different kinds of securities. Every one with money to invest should give careful attention to the kind suited to him.
Generally speaking, securities may be divided into two classes, safe and speculative. Broadly speaking, bonds are safe and stocks speculative. Of course there are varying degrees of safety in bonds and some stocks are high-grade investments, but if the man with little money will ignore stocks and buy bonds he will not go far wrong. Because bonds are safer than stocks they yield less, and on
this account many people pass them up in favor of stocks-often to their sorrow.
A bond is a direct obligation of the issuing company, secured by the pledge of definitely named property. Stock evidences a share in the business; if profits are large the stockholders benefit, but in case of loss the stockholders must bear it. Take the case of the New York, New Haven, and Hartford Railroad Company; as most people know, this great corporation nearly went to smash a few years ago.
Dividends have not been paid on the stock in years and the value of the shares tumbled precipitately, bringing suffering and loss to thousands of people. There seems little prospect of dividends being resumed for a long time. But what about the owners of the mortgage bonds of the New Haven road? They are receiving their interest regularly and are not worrying about their investments a bit. The interest rate on bonds is fixed, and the buyer of bonds can figure exactly what the yield on his investment will be; he never expects a "melon" to be cut for his benefit and he does not look forward to a share in any large profits which may be made. What he buys is safety. He does not expect to divide increased earnings, and, on the other hand, he does not expect to share in the losses. If his interest is not paid, he and his fellow-bondholders can sell the property and get their money. Still, if one will insist upon looking at investments from the standpoint of profit only, it is en
ULIAN STREET is one of the best-known ducted, your contest spirit is still func
He has tioning, we should be glad to have you
the reputation of writing not only ensuggest subjects for the remaining two
FOR THE CRITICS gagingly but truthfully. The story is that are still to be announced.
told that after he had published an unBY REGINALD WRIGHT KAUFFMAN
expurgated description of one of our Twould be as hard for The Outlook
7ou, who in majesty apart
Western cities the city authorities in to announce what it is going to do
Form and declare the Laws of Art: their wrath changed the name of the next year as for the New York "Times"
toughest street in the town to "Julian to forecast its plans very far in advance. How certainly you clip the palms
Street.” He was born in Chicago in That depends largely upon what hap
From Palestrina down to Brahms; 1879 and was educated in the Chicago pens in the world. And the most inti.
How lessen, with a shrug or cough, public schools and in Ridley College mate interpretations of important news developments are not always written by Now Chopin, now Rachmaninoff!
Preparatory School, at St. Catherine's,
Ontario. He has been a reporter on the people with famous names. As evidence,
They live or die upon your words.
New York "Mail and Express" (now the however, that The Outlook during the Please, that Composer's merits weigh
"Evening Mail"), on the staff of which past year has not been without its dis- Who, in some rude, uncultured day,
he was later dramatic critic. He is the tinguished contributors, it will be re- Wrote the brief songs of birds!
author of "My Enemy the Motor," "Paris called that there were articles by such
à la Carte," "Ship-Bored," "Welcome to American statesmen as Robert Lansing, Tell us how ranks (for who else knows?)
Our City," "Abroad at Home," and Calvin Coolidge, Will Hays, Theodore The lost Cellini of the rose;
"American Adventures"; he collaborated Roosevelt, Harold Knutson, and F. M. Or with what skill that Dorus spoke,
with Booth Tarkington on the comedy Davenport. There were feature articles The Architect who built the oak.
“The Country Cousin." Mr. Street by such eminent foreigners as Stéphane You codify and analyze
writes of old Japan as observed by VisLauzanne, P. W. Wilson, and Baron S. A.
Titians, Rembrandts, or Fragonards: count Shibusawa.
MMA S.. YULE Julian Street, John Burroughs, George
writes of the Kennan, Bruce Barton, Isaac Don Le
of vine, and W. R. George. Men and
She has lived for ten women of letters included E. V. Lucas, How ranks in your enduring plan
years in the Orient. Brander Matthews, James Huneker, Ste
Christopher phen Leacock,
The unknown Phidias of man?
She is now Associate
lish Who, to encourage and console,
in the ColRinehart, Elsie Singmaster, Stewart Edward White, Emerson Hough, Ida M. Wrote odes to immortality
lege of Agriculture, University of
the Tarbell, Joseph C. Lincoln, Reginald Between the covers of the soul?
Philippines. She has Wright Kauffman, Gertrude Atherton,
done educational work in the State of Hermann Hagedorn, Aline Kilmer, and. Thumbs up or down? We bide your nod!
Washington and in Alaska.
She was Thomas L. Masson. The stuff of which Is it True Art, this work of God?
born in Iowa. The Outlook is to be made for the next fifty-two issues will be as carefully se
HARLES lected and as important.
ing close-ups of British royalty, was MIT the chatter about New York
formerly London correspondent for the O City theaters and the endless sucBY E. A. BUCHANAN, ASSISTANT SECRETARY
New York "Herald”; he has also served cession of plays, good, bad, and indiffer
the "Herald” in Rome, Paris, Spain, VOR
Berlin, and Cairo. He has contributed " given the
frequently to The Outlook. His article demands C. H. J. B., of Los Angeles, Society of New York City, for the use of
entitled “The French Civic Union" apCalifornia. "Delete all profanity from the girls, reduced fare to our houses.
peared in the July 20 issue of The Outlook. your columns. If in any case of delineaThis year one of the roads has refused
OLLY AMOS" is the pen-name of the tion of character or report of a conversa
author of "The Daniel Jazz and : tion it appears necessary to indicate to pay full fare for every girl who goes
the Rabbi." It appears from her sathat profanity was used, a simple dash to any of our places in Connecticut. We
tirical story that the wives of Christian is sufficient.” On the other hand, almost operate six houses there.
ministers are not alone in their tributhe same mail brought us a letter sub- On account of this extra expense, the
lations; the wives of rabbis do not necesmitted in Contest Number Three in Society will not be able to send as many
sarily always tread the primrose path which the contestant winds up with an girls as formerly unless the generous
either. There is no moral attached; but explosive "damn" and instructs us to public and our kind friends will come
some reflections induced by this "prible repeat the word until the length of his to our assistance. Owing to the excess
vate letter" appear on the editorial pages. letter reached the 600-word limit.
ive heat of the last few week's many
YMAN ABBOTT, the Editor-in-Chief, N the June 8 issue, I notice that a can't take them unless the money comes in.
brothers in his gallery of his contempo
raries. I am very familiar with) says that The Who will help us give these girls the Outlook does not appeal to him. I've rest and change they so much need?
EGINALD WRIGHT KAUFFMAN was forbeen reading The Outlook for quite a Forty dollars will pay board, traveling merly associate editor the few years, and I think that, if anything, expenses, and medical care for a month “Saturday Evening Post" and of the it has improved. My opinion seems to at Santa Clara, for a girl with tubercu- “Delineator.” During the World War prebe the existing one over at school (Car- lar tendency. Ten dollars will pay for he was a newspaper correspondent with negie Institute of Technology), if au- a vacation of two weeks, also traveling the French, Belgian, British, and Amerthority is wanted on international ques- expenses.
ican armies, after having enlisted for tions; if information for a debate is Contributions, large and small, may service in France and having been honneeded or if material for a theme is be sent to the office of the Society, 105 orably discharged on account of physiand desired, the English department refers East 22d Street, New York City. Checks cal disability. He is the author of "The us to The Outlook and to one or two should be drawn to Working Girls' Vaca- House of Bondage" and many other Fothers. They merely confirm the opin- tion Society
books. He lives in Columbia, Pennsylvania.
Cent's in this issue some interest
this privilege, and the Society is obliged "M
I gentleman from Suregon newhich stata