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How to Invest Money   By:

How to Invest Money by George Garr Henry

First Page:

HOW TO INVEST MONEY

BY

GEORGE GARR HENRY

Vice President Guaranty Trust Company, of New York

[Illustration]

FUNK & WAGNALLS COMPANY NEW YORK AND LONDON 1908

COPYRIGHT, 1908, BY FUNK & WAGNALLS COMPANY [ Printed in the United States of America ] Published April, 1908

CONTENTS

PAGE

PREFACE 5

I. GENERAL PRINCIPLES OF INVESTMENT 7

II. RAILROAD MORTGAGE BONDS 23

III. RAILROAD EQUIPMENT BONDS 40

IV. REAL ESTATE MORTGAGES 51

V. INDUSTRIAL BONDS 63

VI. PUBLIC UTILITY BONDS 76

VII. MUNICIPAL BONDS 91

VIII. STOCKS 100

IX. MARKET MOVEMENTS OF SECURITIES 108

PREFACE

The aim of this book is to present in clear form the simple principles of investment, and to afford the reader a working knowledge of the various classes of securities which are available as investments and their relative adaptability to different needs. The book is an outgrowth of the writer's personal experience as an investment banker. Most of the matter which is presented has appeared in the pages of "System" Magazine, through the courtesy of whose editors it is now rearranged and consolidated for publication in book form.

G. G. H.

HOW TO INVEST MONEY

I

GENERAL PRINCIPLES OF INVESTMENT

With the immense increase in wealth in the United States during the last decade and its more general distribution, the problem of investment has assumed correspondingly greater importance. As long as the average business man was an habitual borrower of money and possest no private fortune outside of his interest in his business, he was not greatly concerned with investment problems. The surplus wealth of the country for a long time was in the hands of financial institutions and a few wealthy capitalists. These men, the officers and directors of banks, savings banks, and insurance companies, and the possessors of hereditary wealth, were thoroughly equipped by training and experience for the solving of investment problems and needed no help in the disposition of the funds under their control. During the last ten years, however, these conditions have been greatly altered. The number of business men to day in possession of funds in excess of their private wants and business requirements is far greater than it was ten years ago, and is constantly increasing. These men are confronted with a real investment problem.

While they have not always recognized it, the problem which they are called upon to solve is really twofold it concerns the safeguarding of their private fortune and the wise disposition of their business surplus. They have usually seen the first part of this problem, but not all have succeeded in clearly understanding the second. When the treatment of a man's business surplus is spoken of as an investment problem, it is meant, of course, not his working capital, which should be kept in liquid form for immediate needs, but that portion of his surplus which is set aside for emergencies. It is coming to be a recognized principle that every business enterprise of whatever kind or size should establish a reserve fund. It is felt that the possession of a reserve fund puts the business upon a secure foundation, adds to its financial strength and reputation, and greatly increases its credit and borrowing capacity. The recognition of this fact, combined with the ability to set aside a reserve fund, has brought many men to a consideration of the best way in which to dispose of it. It is obviously a waste of income to have the surplus in bank accounts; more than that, there would be a constant temptation to use it and to confuse it with working capital. Its best disposition is plainly in some safe interest bearing security, which can be readily sold, so that it will be available for use if necessity demands... Continue reading book >>




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