Otto H. Kahn

“ None too well trained, none too experienced, with the pleasure-loving qualities of youth, we have suddenly, by a world tragedy, been made heir to the greatest estate of opportunity that imagination ever pictured."
America is in a period which for good or ill is a turning point in her history. Her duty and her responsibility are equally as great as her opportunity. ”

“ The Speculator's business is to discern and take advantage of immediate situations, his outlook is for tomorrow, or anyhow for the early future; he must indeed be able at times to disregard intrinsic values.
The temperamental and mental qualifications of the Banker and Speculator are fundamentally conflicting and it hardly ever happens that these qualifications are successfully combined in one and the same person. The Banker as a stock market factor is vastly and strangely over-estimated, even by the Stock Exchange fraternity itself. ”

“ One of the reasons for London's financial world position is that its American opportunity for foreign tradeStock Exchange affords a market for all kinds of securities of all kinds of countries. The English Stock Broker's outlook and general or detailed information range over the entire inhabited globe. It is largely through him that the investing or speculative public is kept advised as to opportunities for placing funds in foreign countries. He is an active and valuable force in gathering and spreading information and in enlisting British capital on its world-wide mission. ”

“ We hear or read from time to time about the public being fleeced. There is a good deal of smoke. Isn't there some fire?
Answer:
If people do get "fleeced," the fault lies mainly with outside promoters or unscrupulous financiers, over whom the Stock Exchange has no effective control. Some people imagine themselves "fleeced," when the real trouble was their own get-rich-quick greed in buying highly speculative or unsound securities, or having gone into the market beyond their depth, or having exercised poor judgment as to the time of buying and selling. ”

“ The viewpoint of the average American investor is as yet rather a narrow one. Investment in foreign countries is not much to his liking. The regions too far removed from Broadway do not greatly appeal to him as fields for financial fructification.
Yet, if America is to avail herself fully of the opportunities for her trade which the world offers, she must be prepared to open her markets to foreign securities, both bonds and stocks. ”

“ Can we honestly say that we are doing our full share to bring about such contact and to get ourselves and what we believe in properly understood, believe in not only because it happens to be our job in life and our self-interest, but because in the general scheme of things it serves a legitimate and useful and necessary function for our country? ”

“ Perhaps the Stock Exchange authorities are not always alert enough and thorough enough in running down and punishing deliberate wreckers of values and spreaders of evil omen; perhaps there is altogether not enough energy and determination in dealing with the grave and dangerousShort selling Is it justifiable? evil of rumor mongering on the Stock Exchange and in brokers' offices. But after all even Congress, with the machinery of almost unlimited power at its hand, does not always seem to find it quite easy to hunt the wicked rumor-mongers to their lairs and subject them to adequate punishment. ”

“ My recent observation of and contact with Congressmen and others in Washington have once more fortified my belief that the men by and large whom the country sends to Washington to represent it, desire and are endeavoring, honestly and painstakingly, to do their duty according to their light and conscience, and that, making reasonable allowance for the element of party considerations, they represent very fairly the views and sentiments of the average American. ”

“ No dignity is worth having or merited or capable of being long preserved which cannot hold its own in the market place.
Democracy wants "to be shown." It is no longer sufficient for the successful man to claim that he has won his place by hard work, energy, foresight and integrity. ”

“ Without such a market, without such a trading and distributing centre, wide and active and enterprising, corporate activity could not exist.
If the Stock Exchange were ever to grow unmindful of the public character of its functions and of its national duty, if throughIs the Exchange merely a private institution? inefficiency or for any other reason it should ever become inadequate or untrustworthy to render to the country the services with constitute its raison d'être, it would not only be the right, but the duty of the authorities, State or Federal, to step in. ”

“ The fluctuations of the stock market represent the views, the judgment and the conditions of thousands of people all over the country, and indeed, in normal times, all over the world.
The current which sends market prices up or down is far stronger than any man or combination of men. It would sweep any man or men aside like driftwood if they stood in its way or attempted to deflect it.
True, men at times discern the approach of that current from afar offDo "big men" put the market up or down? ”

“ Such a law would be analogous in its purpose and function to the Pure Food Law, Any, let us call it, "anti-fleecing" law which went beyond that purpose and function would overshoot the mark. The Pure Food LawDoes the public get fleeced? does not pretend to prescribe how much a man should eat, when he should eat or what is good or bad for him to eat, but it does prescribe that the ingredients of what is sold to him as food must be honestly and publicly stated. The same principle should prevail in respect of the offering and sale of securities. ”

“ Short selling has a legitimate place in the scheme of things economic. It acts as a check on undue optimism, it tends to counteract the danger of an upward runaway market, it supplies a sustaining force in a heavily declining market at times of unexpected shock or panic. ”

“ As to "big men" meeting to determine the course of the stock market, that is one of those legends and superstitions inherited from olden days many years ago when conditions were totally different from what they are now, and when the scale of things and morals, too, were different, which it is hard to kill. ”

“ The outside market on the curb could not exist if it were not for the stringency of the requirements in the interest of the public which the Stock Exchange imposes in respect of the admission of securities to trading within its walls and jurisdiction. ”

“ Not a few politicians are still sounding the old battle cry, although the battle of the people for the regulation and supervision of corporations was fought to a finish years ago and won by the people, and although the people themselves of late, on the few occasions when a direct proposition has been put up to them, such as recently in Missouri, have indicated that they consider the punitive and probationary period at an end and want business to be given a fair chance and a square deal. ”

“ Democracy insists rightly that a part of every man's ability belongs to the community. Democracy watches more and more carefully from year to The use of the power that goes with successyear what use is being made of the rewards which are bestowed upon material success, and particularly whether the power which goes with success is used wisely and well, with due sense of responsibility and self-restraint, with due regard for the interests of the community. ”

“ The short seller who goes about like a raging lion [or bear] seeking whom he may devour; he who deliberately smashes values by dint of manipulation or artificially intensified selling amounting in effect to manipulation, or by spreading alarm through untrue reports or even through merely unverified rumors, does wrong and ought to be punished. ”

“ How many of us make an effort to come into personal relationship with people, both here and in the West, outside of our accustomed circles? Yet an ounce of personal relationship and personal talk is worth many pounds of speech making and publicity propaganda. ”

“ When you look a man in the face and talk to him and question him and realize in the end that he is sincere in his viewpoint, whether you share it or not, and that he is made of the same human stuff as you, "To be one of fifteen men around a table"and has neither horns nor claws nor hoofs, much animosity, many preconceived notions are apt to vanish and you are not so cocksure any longer that the other fellow is a destructive devil of radicalism or a bloated devil of capitalism, as the case may be. ”

“ Many in and out of Congress are still under the controlling impress of the stormy years when certain deplorable occurrences affectingThe vacuum cleaner of reform and regulation corporations and business men were brought to light, when it was demonstrated that certain abuses which had accumulated during well nigh two generations needed to be done away with for good and all, and when the people went through the ancient edifice of business with the vacuum cleaner of reform and regulation, using it very thoroughly, perhaps, in spots, a little too thoroughly. ”

“ If a drug contains water, the quantity or proportion must be shown on the label, so that a man cannot sell you a bottle filled with water when you think you are buying a tonic. In the same way the proportion of water in a stock issue should be plainly and publicly shown. ”

“ Business and business men must come out of their old time seclusion, they must vindicate their usefulness, they must prove their title, they must claim and defend their rights and stand up for their convictions. ”

“ The purchaser should not be permitted to be under the impression that he is buying a share in tangible assets when, as a matter of fact, he is buying expectations, earning capacity or goodwill. These may be, and often are, very valuable elements, but the purchaser ought to be enabled to judge as to that with the facts plainly and clearly before him. ”

“ May I add, in parenthesis, that a sharp line of demarcation existsDo "big men" put the market up or down? between the speculator and the gambler? The former has a useful and probably a necessary function, the latter is a parasite and a nuisance. He is only tolerated because it seems impossible to abolish him without at the same time doing damage to elements the preservation of which is of greater importance than the obliteration of the gambler. ”

“ In this country it is not so much a question of educating our masters, the people and the people's representatives [who, moreover, would resent and refuse to tolerate for a moment any such patronizing assumption] , as of getting them to know us and getting ourselves to know them. ”

“ The short seller contracts to deliver at a certain price a certainShort selling Is it justifiable? quantity of stocks which he does not own at the time, but which he expects the course of the market to permit him to buy at a profit. ”

“ On the contrary, in its own sphere it has ever endeavored to maintain an exemplary standard, and it has ever shown itself ready and willing to introduce better methods whenever experience showed them to be wise or suggestion showed them to be called for. ”

“ Most of them are men of moderate circumstances. Very few of them have had occasion to familiarize themselves with the laws, the history and the functionings of finance and trade; to come into relation to the big business affairs of the country, or to compare views with its active business men. ”

“ In its essence that is not very different from what every contractor and merchant does when in the usual course of business he undertakes to complete a job or to deliver goods without having first secured all of the materials entering into the work or the merchandise. ”