Investment

“ I have not written to establish any favorite theory, but simply to inculcate truth, and to aid in developing a most important branch of American industry, which, either directly or indirectly, involves the investment of a vast amount of capital, the aggregate profits of which depend so largely on your judgment and skill. ”

“ The capital of those who live on the interest of their own fortunes has generally sought and found some fixed investment, such as the public funds, mortgages, or the bonds of public companies, which investment, except under peculiar temptations or necessities, is not changed. ”

“ Investment is a pecuniary transaction, and its aim is pecuniary gain,—gain in terms of value and ownership. Invested wealth is capital, a pecuniary magnitude, measured in terms of value and determined in respect of its magnitude by a valuation which proceeds on an appraisement of the gain expected from the ownership of this invested wealth. In modern business practice, capital is distinguished into two coördinate categories of assets, [Pg 353] tangible and intangible. ”

“ We must reiterate that if, in the event of giving all to labor, there were no immediate falling off in the amount of capital, such falling off would nevertheless soon come about through mistaken investment, since the shrewd and enterprising, into whose hands capital now usually falls, are precisely those who are best qualified to discover the fields in which investments may be made to the best advantage; for it is by the utilization of such fields that the greatest amount and variety of productions are had, and most is added to the general wealth of the civilized world. ”

“ The capital investor — the individual who in industry loans and risks his capital or a part of it — receives for his capital a return in the form of interest; but he receives something more. As an investor, he becomes entitled to a voice in the control of the industry in which his investment is made. The life or labor investor — the worker who in industry loans and risks life, or gives to industry that part of it described as labor — 'receives for his labor, which is the use of his life and skill for the time in which labor is given, a return in the form of wages. ”

“ 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. ”

“ A person can but eat one dinner in the day; two or three coats are about all he needs for the outer man; he can but live in one house at a time; and, in short, after paying away all he needs to pay, he finds that he has not a little over for—investment. Since our young days, this word investment has come remarkably into use. All are looking for investments; and as supply ordinarily follows demand, up there rise, at periodical intervals, an amazing number of plans for the said investments—in plain English, relieving people of their money. ”

“ Under the head of investment of Capital will be considered stock of every description, all Implements of Husbandry, and other Articles which may be applicable to the purposes of pn>ductive industry, or which may be necessary for the establishment of the Settler on the Land where he is to be located. The amount of any Half-pay or Pension which the applicant may receive from Government, and which he may be prepared to invest as before mentioned, will also be considered as so much Capital. ”

“ Similar signs of progress and prosperity are to be found in the development of organized manufactures, in the increased investment of capital in commerce and industry, in dividends paid by various enterprises, in the extended use of the railways, the postoffice and the telegraph. ”

“ While the progress of science, applied to developing the resources of this country, has prodigiously increased its capital, the ratio of it offered for safe investment has increased at the same time. Savings-banks, trust companies, building associations, insurance companies diverse in type, afford, as it were, a thorough system of conduits to bring every tiny rill of saved earnings to some great reservoir of accumulation. ”

“ If human nature felt no temptation to take a chance, no satisfaction (profit apart) in constructing a factory, a railway, a mine or a farm, there might not be much investment merely as a result of cold calculation. ”

“ It is also argued that to determine whether it is better to manufacture or to buy goods in the open market, and whether it is better policy to manufacture by means of expensive machinery and other equipment or by manual labor, interest on investment must be considered. ”

“ The facilities which these Joint Stock Companies offer for the investment of capital, even of the smallest amount, the temptations which the prospect of large profits hold out, and the low interest obtained on national stock of every description, have attracted a vast body of capitalists, small and great, who have subscribed to these undertakings with the real intention of investment. ”

“ If the circumstances of society are such as to furnish a ready investment of disposable capital; (as for instance in London, where the public funds and other securities, of undoubted stability, and affording great advantages for receiving the interest without trouble and realizing the principal without difficulty when required, tempt all persons who have sums of importance lying idle, to invest them on their own account without the intervention of any middleman;) ”

“ He does this by force of his large holdings of capital at large, the weight of which he can shift from one point of investment to another as the relative efficiency—earning-capacity—of one and another line of investment may make it expedient; and at each move of this kind, in so far as it is effective for his ends, he cuts into and assimilates a fraction of the invested wealth involved, in that he cuts into and sequesters a fraction of the capital's earning-capacity in the given line. ”

“ Their holdings of investment securities are kept well within the limits set by their aggregate capital, surplus, and savings funds, and their method of handling commercial business, based as it is on accurate knowledge of their customer's operations and upon the lien upon produce heretofore described, prevents their acceptance, through ignorance, of investment securities under commercial disguise. ”

“ First, it shifts our emphasis in public and private spending from consumption to investment, initially by jumpstarting the economy in the short term and investing in our people, their jobs, and their incomes over the long run. ”

“ Invested capital—that is, capital sunk in enterprises which society will recognise as belonging to the old order—will take the alarm and fall in value enormously, while, on the other hand, capital seeking investment will welcome an outlet which has long been its sorest need. Invested capital will in its opposition be further weakened by another consideration. ”

“ At some point in the system of investment and business extension will be found some branches of industry which have gradually lost what differential advantage they started out with when they entered on the era of prosperity ”

“ Capital then takes hold cheerfully; there is a market for the new securities and a proper basis for fresh commercial development, because investors and speculators have learned from the published daily quotations of these Stock Exchange securities that there is good warrant for the flow of capital into such channels, and that a reasonably safe return will follow an investment in them. ”

“ What the causes are which make the return to capital greater in one country than in another, and which, in certain circumstances, make it impossible for any additional capital to find investment unless at diminished returns, will appear clearly hereafter. ”

“ 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. ”

“ Such business cannot be included in the commercial affairs of the country, economically speaking, because they are essentially trust transactions, and the funds, generally, belong to the investment class. ”

“ There is room, therefore, for both policies to operate together;3⁄4to promote investment and, at the same time, to promote consumption, not merely to the level which with the existing propensity to consume would correspond to the increased investment, but to a higher level still. ”

“ 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. ”

“ Capital's contribution to industry is in the nature of material substance loaned by way of investment. Its possessor may be any kind of person, from a social parasite or ne'er-do-well, who is the inheritor of a fortune, to an infant totally incapable of any service to industry, and whose property is necessarily held in trust. ”

“ It is very common, for example, when he wishes to make a permanent investment and has no thought of reselling, to find him purchasing [16] securities which possess in a high degree the quality of convertibility. ”

“ The most obvious fact limiting the pecuniary gain secured by means of invested wealth is the sum invested. Therefore, capital limits the productiveness of industry; and the chief and indispensable condition to an advance in material well-being is the accumulation of invested wealth. In discussing the conditions of industrial improvement, it is usual to assume that "the state of the arts remains unchanged," which is, for all purposes but that of a doctrine of profits per cent., an exclusion of the main fact. Investments may, further, be transferred from one enterprise to another. ”

“ There is reason to believe that large amounts of capital, both at home and abroad, are ready to seek profitable investment in the advancement of this useful and most civilizing means of intercourse and correspondence. ”

“ It sets forth certain fundamental principles that apply broadly to all activities, but specifically to manufacturing and the means and methods that must be employed to win in the industrial conquest.
To the investor it provides the best measure by which he can estimate the economic soundness and prospects of an enterprise. It gives confidence in right projects, making money available for things that are right, and reducing the hazard of investments by eliminating the badly or indifferently managed organizations and those founded on unsound policies. ”

“ FINANCIAL LAND AND INVESTMENT COMPANIES. These companies are mostly formed for the purpose of employing their capital in the Colonies, where money commands a higher rate of interest, and can be more profitably employed than in this country. ”

“ When, however, the capital of the country increased, and men looked earnestly about them for new modes of investment, the profits and the principles of life assurance were anxiously investigated, its demands inquired into, its difficulties overcome ”

“ Firms, with numbers of clerks, exist in our day, who have forty, fifty, and as many sixty thousand names of people duly registered in their books, with their place of abode, duration of residences, means, style of living, trade, or profession, and other particulars, enabling a judgment to be formed of the kind of investment which is likely to suit them. ”

“ In times of continued business prosperity very high rates are demanded for the use of money, because the liquid capital of the country, to a large extent, has been converted into fixt forms, in the development of new mines, the building of new factories and railroads, and in the improvement and extension of existing properties. These high rates have the effect of reducing the price level of investment securities because people having such securities are apt to sell them in order to lend the money so released, thus maintaining the parity between the yields upon free and invested capital. ”

“ I expect to see the State, which is in a position to calculate the marginal efficiency of capital-goods on long views and on the basis of the general social advantage, taking an ever greater responsibility for directly organising investment; ”

“ With what do you purchase necessities and luxuries? We on Earth get the intensive desire to earn, and accumulate money or capital. This desire is a strong driving power which incites us to do good work or service, to invent new and necessary improvements, and to make scientific discoveries. We do all this for gain and profit in moneys and capital, which we save, invest on interest, in property, or in other profitable or risky enterprises, and even speculate with on the future development or increase in value of our investment. We even gamble on chances to win. ”

“ The premiums that shares in projects may bear in the market, are not even a shadow of criterion whereon to found a judgment for investment. This is well known to every discreet man who has an odd hundred to put out ”

“ Effects of Drawing Interest from Investments beyond the Social Boundary.—Not all of these are consumers' goods. Some capital goods are imported and, moreover, many consumers' goods are passed over to the group called HH ́ ́ ́ in our table,—the one that makes active instruments of production,—and in this indirect way the earnings of capital invested abroad add to the amount of capital at home. In the long run the exportation of funds for permanent investment may, by its other and more indirect effects, increase the supply of them at home. ”