Page:Popular Science Monthly Volume 28.djvu/77

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69
THE ART OF INVESTING.

abuses exist everywhere? What great wrongs can exist there, in a colony exposed to all eyes, where ten thousand inhabitants are directly or indirectly interested in its good reputation? The colony has been developing for centuries. Let the modifications in detail suggested by science, by experience, by the desire to increase the safety and comfort of the patients, be applied to it. Nothing can be better or more humane than that; but such improvements need not touch the principle of family treatment.—Translated for the Popular Science Monthly from the Revue des Deux Mondes.


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THE ART OF INVESTING.

By JOHN F. HUME.

"HOW can I invest my money to make it pay a fair interest, and at the same time insure its safety?" is a question daily asked by thousands. With the multiplication, consequent upon the growth of wealth among us, of that class of persons who want to live by their means, without care or labor, the number of anxious inquirers on that point is constantly increasing. It would seem, when reference is had to the many securities, both bonds and shares, that are offered, often at temptingly low prices, to be a question very easily answered. The truth is, there is none more difficult. The ordinary investor who goes about the work of converting his cash into paper combining the two elements of value spoken of, finding himself hopelessly embarrassed by the seeming richness of the market, soon gives up in despair, and turns the job over to some banker or broker who works for a commission. Experience shows that even then he is too often the victim of defective judgment or misplaced confidence.

A history of investment securities would furnish a most interesting study. In no other department of business have there been greater changes. The time has been, within the memory of many now living, when the man who had money to put at usury, generally loaned on personal indorsement, the borrower relying on his neighbor or other good friend to "back" his paper for him. The mortgage on real estate, of course, was known; but, owing to the short intervals for which loans were usually made, was not often resorted to. The shares of banking, turnpike, canal, railway and other incorporated companies after a while began to absorb the money of people who wanted to realize more than current rates of interest, and were willing to take corresponding risks.

The war of the rebellion popularized the coupon bond, in consequence of its adoption by the Government, and made it the favorite form of investment paper. Railroad and other corporations lost no