THE NEW MONTEREY North Asbury Park,N.J. The thrilling canyon of the Shoshone River IN Gardiner-OUT Cody IF you miss Gardiner Gateway and Cody Road you do not see Yellowstone! See them both on the complete tour of the park-on a Burlington-Northern Pacific Planned vacation. Enter at Gardiner; tour the park, then leave over Cody Road-words cannot describe it! No side trip, no extra cost for Cody Road and Buffalo Bill country. Also, for low price of round trip ticket to Yellowstone alone, you can go to Colorado, Denver-with side trip to Rocky Mountain (Estes) Park; then-the Pike's Peak region. Vacation costs are down FREE BOOK Everything you want 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 Guaranty Trust Company of New York NEW YORK LONDON PARIS BRUSSELS LIVERPOOL HAVRE ANTWERP CONSTANTINOPLE 1 Were it otherwise, life would be unendurable. Some one has said that "we live under a sentence of death with an indefinite reprieve," and if we knew what would be our condition to-morrow or a year hence we would be utterly miserable. Our misery would probably be increased if we had the power to arrange the future as we saw fit, for, we would be forever rearranging it, and those affected by our change of plans would curse us bitterly. Those who write letters to editors must realize this, and yet there are thousands of people who not only attach importance to prophecies of the future but are willing to pay large fees to financial soothsayers (note the word) who claim a "soothing" gift of scientific foresight. This claim they often try to vindicate by elaborate historical studies and charts or diagrams which it is the present fashion to call "graphs." Some of these self-constituted seers have really deceived themselves, for of all the fallacies by which men are deluded the greatest is probably the one that is expressed in the statement that "history repeats itself." History cannot repeat itself, for it is a kaleidoscope in which the bits of colored glass that make up human experience are never identically arranged, and it is manifestly illogical to assume that present conditions will produce the effect formerly caused by those which were different. To argue, for instance, that certain financial conditions will now have the same result that they produced before the Federal Reserve Banks were established is manifestly absurd; but gallons of ink, have been wasted and hundreds of "graphs" have been prepared in an effort to support such conclusions. There is not the remotest analogy between the fiscal condition in which the more important governments find themselves to-day and their pre-war position, but many people are nevertheless busy studying the financial history of Napoleon's time in an effort to determine what may now be expected. That such studies are fascinating is admitted, for it is easy to generalize with regard to human nature and to deduce half-truths that seem to be new discoveries from our generalizations. But hundreds of philosophers and thousands of speculators (who are, in a sense, would-be philosophers) have been wrecked upon the rock of a half-truth, and the Latin phrase post hoc propter hoc describes a seemingly truthful fallacy that is responsible for the errors of many scientists, the mistakes of many physicians, and the bankruptcies of many merchants. If from the numerous letters that have The Strength of AMERICA Reflected in Washington To Washington, the O Washington, the Nation's Capital, flows a steady stream of visitors from all the States in the Union. They come to see the Government buildings, the national memorials and the many points of historical and patriotic interest. They return home impressed and inspired, not only by the magnificence of what they have seen, but also by the manner in which the Capital City reflects the strength and permanence of America, and cf its institutions and ideals. Where else, if not in Washington, would you expect The name of The F. H. Smith Company has been linked with First Mortgage Investments in Washington since 1873. We have sold our offerings to conservative investors throughout the country on our record of no loss to any investor in 49 years. 79 The THE COLLECTOR and the ART CRITIC. The Collector may FINANCIAL DEPARTMENT (Continued) come to me recently I may construct a cross-section of the public mind, I should say that men are especially curious now First, As to the future of the American stock market. Second, As to the probability of a general business revival in the United States. Third, As to whether the foreign trade that we enjoyed during the war and until recently is permanently lost to us. Fourth, As to whether the foreign securities now being offered in the United States will be permanently safe investments for American capital; and Fifth, last, and generally, As to whether the revival of speculative activity now discernible presages the return of an enduring prosperity. The questions asked are generally more specific, but most of them will fit in one of these categories. I have grouped them accordingly that I may reply to them, but there is a difference between an answer and a reply, and I shall not stultify myself by at Art of Judging HE SECURITIES brought to your sic value. First, As to the stock market, I will reply, as always, by pointing out that there are in the United States over 320,000 private corporations and thousands of political communities, States, cities, counties, school districts, road districts, irrigation districts, etc., all of which issue stocks or bonds or both. To express an opinion that is worth anything about any one of these securities or any particular group or class of stocks and bonds presupposes a special study that can be expected only of a specialist, and to him those who seek reliable information in regard to intrinsic values should repair. No one can say whether the stock market as a whole is going up or down. As a rule, it reflects the condition of the money market and the psychological state of the public mind. Money is generally cheap when and because business is dull and people are depressed. If it is ever safe to buy the speculative counters that go up and down on the Stock Exchange, that is the time, for when interest rates are low stocks can be carried cheaply, and because hope springs eternal in the human breast elation has never yet failed to follow depression. There are, however, but very few who can detach themselves from the crowd or resist its psychological contagion. This is why most speculators go broke or quit losers. It is emotionally impossible for them to buy when most people are selling or sell when the crowd is buying. The exceptional superman can do this, but the average man will be better off and happier if he confines himself to the investments which an honest and experienced banker recommends. Both he and the banker will make mistakes, but they won't be ruinous. Second, As to a general business revival, all that can be said is that we have 110,000,000 people in the United States, but few of whom are working at anything like capacity. Most of them can produce more, and thereby increase their purchasing power. Business means the distribution of goods, and it is increased by an enlargement of production at low prices rather than by reduced production at high prices. The continuous introduction of labor-saving machinery to some extent offsets the pres ent unwillingness of most Americans to work up to capacity, but, while the volume of money changing hands may be increased by advancing prices, the volume of goods produced and consumedor business-will be increased only by harder work. A real revival of business is not, therefore, to be expected unless men become willing to work harder. Many are loafing now because by working part of the time they can make enough to live all the time, and a reduction in wages would seem to be the only cure for the present laziness and frivolity. Third, As to our foreign trade, the indications are that we shall lose much of it. In a previous article I have already pointed out that we could prosper if we had no foreign trade at all, and, while we may suffer temporary distress in adjusting ourselves to a self-imposed commercial isolation, the probability is that the adjustment will be necessary.' Commerce is an exchange of goods for money, credit, or other goods. Europe has no money to pay us for what we have to sell. We grant her credit grudgingly and are preparing to insist upon the repayment of the loans made to the Allied Governments during the war. Our foreign commerce, therefore, depends upon our ability to exchange goods for goods, and this is seemingly to be made almost impossible by the erection of a tariff wall so high that it will exclude most European products. It is a great adventure in protection, but it remains to be seen whether it will not destroy more than it will protect. Fourth, As to the permanent value and ultimate repayment of the foreign obligations now being offered to American investors I am confused. There is no precedent upon which to base an opinion. In an address I delivered recently I said that we were in the "fourth dimension" of credit. The mathematicians can prove that matter has a fourth or "nth" dimension in addition to the three admitted and comprehensible dimensions of length, breadth, and height. But neither they nor any one else can as yet visualize this fourth dimension as a concrete thing. So it is with the outstanding public debt and paper money of the world's various governments. They reach a total that is utterly beyond human comprehension. Certainly they cannot be paid off during the present generation. Whether they will ever be paid is a question which cannot be answered without considering the possibility of war in the future and the ability of the debtor governments to collect taxes far higher than have ever previously been borne. Some of the foreign bonds now being |