Speculation Legitimate

No one respects the man who hangs around stock exchange offices and scalps quarters and eighths; no, not even for the man who buys stocks this week and sells them next week or even the next month. I, however, have great respect for the man who sells securities and who stores money when securities are in great demand and money is plenty; likewise for the man who exchanges money for securities when the reverse conditions exist. He performs the important function that the ice dealer performs. He cuts ice and stores it when it is a nuisance and every one is trying to get rid of it; but by so doing he has it on hand during the warm days of summer when we all long for it.

Here again, in accumulating money through investments, it is necessary that we should keep the real end in view, - namely, the good of the community, - and not become crazed over the desire for profits. Only those profits secured through investments which result in increased production or steadier conditions ever do a man or his family enduring good. As the Law of Action and Reaction applies to the investment market, so it also applies to our human lives. We receive enduring profits only in payment for service rendered. To have our investments endure, we must not only invest them in a way to render service, but we must secure them by rendering service. At least, this is what statistics show.

The Need Of Enduring Investments

This book is being written by one who has both had money and who has been closely associated with men of money. The last twenty years have been devoted by the writer to helping others secure and accumulate wealth. The Babson Organization has probably been influential in the investment of larger sums of money than any other institution of its kind in the world. Therefore, when I appeal to business men to side-step profits which do not make people truly happier, healthier, or more prosperous, it is with certain authority.

When buying bonds, buy only those which are developing the resources of the country. It may be a municipal bond which is issued for building a sewer or water system; it may be a state bond issued for building roads; it may be a railroad bond issued for lowering grades and replacing wooden bridges by steel structures; it may be a public utility bond, enabling the company to furnish more homes with heat, water, or gas; it may be an industrial bond, enabling some factory to increase its output.

When buying stocks we should have a similar point of view and - in the same way - analyze the situation. With the purchase of stocks, however, there is an additional responsibility when the proxy is received. Proxies should never be thrown in the waste basket. Most of the crimes of our corporations have been due to the fact that the great majority of us people owning the stock either do not use the proxies or else sign simply what is sent to us without investigation. Most of our large industries are controlled by church people. Whenever these church people exercise their present rights, the abuses of these corporations can be abolished, peace with labor can be established and honesty can rule in the markets of the world. Hence, the stockholder has a far greater responsibility than the bondholder. There is no need of additional legislation to bring about financial, industrial, or social reforms. When the churches, educational institutions, and "religious" people who own these companies realize their responsibilities, the evils will be eliminated.

Therefore, readers are urged also to check up their investments as well as their profits. We all should take account of stock, so to speak, and see where our money goes as well as whence our money comes. Let us seek only enduring investments, remembering that the most enduring investments of all are investments in human beings. It is good to loan money to a town to build sewerage systems or to a railroad company to eliminate a dangerous curve; and it is even better to loan money to an industrious boy to secure an education, or to give money to missionary, educational, and other enterprises which are teaching the fundamentals of righteousness. Investments in such institutions are really the most enduring of all investments. This is what Jesus must have had in mind when he advised against investing where moth and rust corrupt and where thieves break through and steal.

Finally let none of us think that piling up money will give us security and protection. Courage is the only thing which helps us attain security. Security is the most uncertain thing in life. It is one thing which can never be surely attained. If it were possible to obtain security, we would immediately have stagnation, and deterioration; and civilization would go to pieces. This applies both to life and to investments. Security is only a comparative term. Some investments are more secure than others, depending on their endurance. Hence, the ablest financiers talk of enduring investments rather than of secure investments.