For Banks, Trustees, Corporations THE 1. Each issue offered by The Baltimore 2. Under the investment standards es- 3. Each mortgage is guaranteed as to 4. Each mortgage is guaranteed as to Company (resources over $16,000,000) 5. Mortgages on all single-use build- 6. The Baltimore Trust Company, or 7. $500 and $1,000 bonds of any avail- 8. All issues provide for the refund of FACTS FOR INVESTORS The Outlook's Financial Service Department is at The Outlook Financial Service Department must also pay a Federal and a Sta transfer tax, which in this case amou to $4. The total of these expenses p interest make $67.34. As dividends two months are $100, the net profit the transaction is $32.66, or about cents a share! Is the hope of getting such a profit prime motive of the trader or specula in purchasing stocks? According to theory, it should be. According to facts, it is not; and according to the tle expense account just given, if it is is a very foolish and short-sighted m tive. With bonds, as the authors do r point out, the situation is entirely diff Bonds do not respond to the e ent. and flow of call money, but, being p marily interest obligations, they do sh a close connection with interest rates. This book leaves unanswered the p haps unanswerable question, What is t cause or what are the causes of increas and decreases in stock prices? It su gests, however, a cause to take the pla of the one thus discarded. It is thi Not cheap call money with conseque small profit from the spread between c rates and dividend rates, but the hop the belief, sometimes the conviction, th prices will materially appreciate, dete mines the volume of stock speculatio and hence, in a measure, the increase stock prices. A man who borrows mon to buy a stock is after a profit from t rise in the stock. If he can make a litt in the event of no rise, so much to t good. But what really motivates him the expectation of a five, ten, fifteen, higher-point profit. He may not get but that is what drives him to go after W. L. S. From Inquiring Reader ECAUSE this department is attempt to concentrate on standard Ame can investments we have been unable analyze certain European investme situations for our readers, as we wo like to do.. For the benefit of those have been solicited by firms or indiv uals distributing Deutsche Handelsha stock, however, we reproduce here p of a bulletin issued by the Better B ness Bureau of New York City telling a preliminary injunction by the Supre Court against H. and B. Wolf & Inc., 20 Broad Street: This company, "the business of whi reached an estimated total of $1,000,0 during the year, has been barred f Pennsylvania and has also been the i THE OUTLOOK, 120 East 16th Street, New York City ject of a warning issued by the Ameri Chamber of Commerce in Germany. In writing to the above advertisers, please mention The Outlook he business in America of H. and B. Volf & Co., Inc., was done on a countryide scale. It was conducted almost enrely by mail, so that the collection of idence was slower than where pubshed advertisements and verbal reprentations to investors are employed. arious German securities of uncertain lue were offered, among them shares of e Deutsche Handelsbank, Frankfort-Main." This bank stock was sold to the merican public at $2.50 a share as ainst the reported price, in Germany, 2 cents. The profits, even assuming gh costs, must have been very fair. YURIOSITY, professional or otherwise, is always whetted at the possibility knowing what somebody else owns. 'e candidly confess that this is one of e delights in being a financial editor. rsonal curiosity has nothing to do with e interest thus excited, because we ver meet our inquiring readers, and ey never meet us. We discuss matters the broad and safe ground of theory d practice. Among the most interesting letters reived lately is one from a gentleman, r. A. F. B., whose wife has inherited estate which, at the prices prevailing the time it came to her, September, 24, stood as follows: erican Locomotive preferred, 119, erican Steel Foundries preferred, 105, erican Tel. and Tel., 1272, erican Tobacco preferred, 105, erican Woolen preferred, 1002, hison, 1042, hison preferred, 922, tral Leather preferred, 49, cago and N. W. Ry., 62, eral Mining and Smelting preferred, 0, F. Goodrich preferred, 80, dyear preferred, 58, at Northern Ry. preferred, 662, Lois Central, 1101⁄2, ✓ York Central, 108, thern Pacific, 652, ific Oil, 47, nsylvania R. R., 4434, on Pacific preferred, 761⁄2, 1 no case is there more than 26 es of any one stock; in none, less three. The total is nearly 225 es. At present prices, as the owner ts out, "everything shows a profit ot American Woolen preferred." ow for the problem. Evidently the In writing to the above advertiser, please mention The Outlook Offices in more than 50 leading cities throughout the world 84 Shrewd Investors NAME ADDRESS S interest rates con Atinue their gradual decline investors en- In greater numbers, far- aldwell & Company has Cald been recognized for many years by experienced individual and institutional investors as a primary source of high grade securities underwritten in accordance with the most conservative safeguards, and distributed at liberal interest rates reflecting the demand for capital in the substantial development of the South. owner is not dependent on these stocks Our answer, which may interest others, "We have carefully examined the list of securities submitted, and would consider them to be, on the whole, good securities and well diversified. "Federal Mining and Smelting is not a dividend-paying stock at this time and is not earning very much. "Pacific Oil and Lead we cannot get much information about. "Replying more specifically to your questions: "1. We would not consider that there are too many rails on the list in view of their quality. "2. The total amount of rubber stock in this list is not large, but it should always be remembered that this industry is subject to vagaries which make it sometimes a little disquieting to hold rubber stock. "3. As to Federal Mining and Smelting, I think it is a good principle not to hold on to something which does not pay dividends, and about which little information is available. Since you can sell it at a profit, why not do so? "4. Outside of the stocks you mention "“5. Should you sell some of your wider diversification. "We would like to call your attention "American Telephone and Telegraph We have reported this little excursion into investment analysis at some length because it interested us exceedingly. We trust it will interest and profit others. A NOTHER Stock-selling game has be stopped by the New York Sta authorities, acting under the Mart Act. The Supreme Court has signed a order directing the Parker Axle a Products Company, Parker Axles, In and the National Safety Brake Corpor tion to show cause why their stock-selli activities should not halt and alleg fraudulent practices be stopped. The New York Better Business B reau reviews the case thus: "In 1920 the Parker Axle and Pro ucts Company was organized in N York with a capital stock of 300,0 shares preferred and 300,000 common $10 par value. It was licensed to man facture 'multiple disc axles' under pater said to have been obtained by Parker 1919. Over $300,000 was realized stock sales, the Attorney-General alleg "After a year, in 1921, Parker Ax Inc., a Delaware corporation, was orga ized. It took over the patent righ The capitalization consisted of $3,00 000 of preferred and $9,000,000 of co mon stock, par value $10. Sales of sto under this incorporation are alleged have been over $125,000. "Parker was president of both of th companies. They were followed by National Safety Brake Corporation, Delaware, on June 27, 1924. The inv tor was engineer of this company, wh authorized the issuance of 100.0 shares of no par value. He transfer the manufacturing license to it. Ab $50,000 of stock was sold, no commer production was made, and again license was withdrawn. At this point active interest of the Attorney-Gene was enlisted in these operations." N this department on November we told the story of a man w through failure to make a will, indired after his death involved his estate in c siderable difficulty. Commenting on paragraph, Mr. C. P. Mayfield, of Fidelity Mutual Life Insurance Co pany, makes this suggestion, which pass on as solid food for thought: "How much simpler the whole mat would have been if Mr. A and Mr. had had an agreement drawn and posited with the stock in a safe-dep box. Suppose that agreement had b an absolute contract of sale, empower the survivor to transfer that stock to own account at the death of the ot for a fixed consideration. "And then suppose those two should have each been insured by corporation to cover their liability for purchase of the stock under the ag ment. Each one could then by will In writing to the above advertiser, please mention The Outlook ose of his estate as he saw fit. The idow, in any case, would have cash. he survivor would have complete conol of the business, with the stock as an set rather than as a liability. "All this could have been accomplished tomatically by the death of Mr. A. o lawyers would have been necessary, > executors would be required, and the st would have been just as much a part that firm's overhead as its fire insurice or any production charge. "That is the modern way and the mesge we are trying to spread, not for delity Mutual, not even for insurance general, but for hard-working business. en-yes, and widows." OME one in Chicago was curious to know why the Colorado Fuel and on 5s of 1943 are selling around 90, hile Colorado Industrial Company 5s of 34 are around 83, "when the former arantees the latter both as to interest d principal." We endeavored to exain as follows: "In the first place, a guaranteed nd is never as good as a first-mortge bond." (There are exceptions, of urse.) "In this case the Colorado dustrial Company's bonds are guaraned by the Colorado Fuel and Iron mpany, and are hence in a slightly aker position. In the second place, lorado Fuel and Iron bonds are seed by the first mortgage on over 000 acres of coal lands, including the y anthracite west of Pennsylvania, toher with coke ovens and yards in eral cities, as against the Industrial npany's bonds, which are secured by rst mortgage on 83,000 acres of minand frontage lands, in all likelihood so well developed, as well as by eholds and bonds. The difference in e which you mention is a little bit e, but to our minds not extraordiy." Ve might have added that bonds and ks often sell "out of line"-that is, either more or less than their real te, and that the reason for this pheenon is impossible to find. READER in Pennsylvania has asked us for a report about a certain nce company of which he holds a few es. In this particular case there was ⚫ that could be said beyond pointing that the success of such concerns deIs not only on the management but eneral business conditions, and pararly on the judgment exercised in ng commercial paper. We do not ider such a stock an investment for verage person, unless the concern is HE 6% Collateral Trust Bonds of the Security Bond & Mortgage Company are secured by first mortgages on which the payment of principal and interest is guaranteed unconditionally by the Maryland Casualty Company. Its certificate as Guarantor is endorsed on each bond. The Maryland Casualty Company is one of the largest and strongest surety companies in the world. Its last financial statement shows capital and surplus of $10,575,279 and total resources of $36,208,124. The guaranteed first mortgages are deposited with the Maryland Trust Company, which is the Trustee for each issue of SECURITY BONDS. Its certificate as Trustee is endorsed on each bond. Security Bonds are eligible as investments for National Banks. Denominations $1,000, $500 and $100. Maturities one, two, three, four and five years. Write to any of the following investment bankers for Booklet No. 13. EVER before in the history of art has there been a more remarkable group of paintings collected in one volume. Here in a single book is the amazing story of the Old and New Testaments recreated as a glowing, pictured drama. Here are the beautiful Bible themes you love best-the romances, adventures, mysteries - all transformed into animated scenes of gripping reality by the magic touch of genius. And here, too, are the engrossing biographies of the world's master painters-men whose lives were not only filled with trials and bitter hardships, but were most colorful. and picturesque. Fiction cannot be made more interesting than these stories of tremendous efforts in the face of poverty, prejudice and the vast indifference of the mob, 224 pages. Printed by the new Aquatone process on a soft finish art paper, bound in beautiful Tyrian purple covers. Sent for 10 Days' Free Examination Harrison, Smith & Co. NEW YORK PHILADELPHIA In writing to the above advertisers, please mention The Outlook When you are looking for a hotel or a tour, real estate, stationery, a position or a worker, some unusual delicacy-or what School Information FREE FREE Catalogs of all Girls' or Boys' boarding schools (and camps) in U. S. Expert advice free. Relative standing. No fees. (Also catalogs of ALL Nurses' Training Schools) Write American Schools' Assoc., 1211-0 Times Bldg., New York, or 1204-0 Stevens Bldg., Chicago SCHOOLS AND COLLEGES District of Columbia You Can Manage a Tea Room Fortunes are being made in Tea Rooms, Motor Inns,and Coffee Shops everywhere. You can open one in your own home-and make money hand over fist, or manage one already going. Big salaries paid to trained managers; shortage acute. We teach you entire business in your spare time. Write for Free Book" Pouring Tea For Profits" LEWIS TEA ROOM INSTITUTE, Dept. N5828 Washington, D. C. Massachusetts SHORT-STORY WRITING Dr. Esenwein Dept. 58 New Jersey large and of proved experience and r sponsibility. Financing companies resemble bank in some particulars, but, unlike bank they are not subject to the regulatio and supervision imposed by law for th protection of customers and the publi In our general credit structure they a an important element, serve an impo tant field, and are by no means to b classed among the unnecessary, merel money-making schemes which confro us every day. But in such compani more than in many other types of ente prise there is a peculiar degree of ris which most of us do not care to share a stockholders-unless we are certain our ground. LBERT G. INGALLS is a write scientific articles and reviews numerous periodicals, the "Scien American" in particular. The e and through them the readers of are you looking for?-glance through VARICK SCHOOL Outlook have frequently been inde THE OUTLOOK'S CLASSIFIED ADVERTISING SECTION to him for information on scientifi velopments. In writing to the above advertisers, please mention The Outlook |