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ure of the cotton crop may affect the cotton-mills of New England as well as the States where cotton is grown; but all the mills in New England are not cotton-mills, and it would take more than this one thing to cause serious concern for the whole manufacturing district. So, while the various sections of the United States are dependent upon one another in large degree, still they are not entirely so, and by investing in the securities of industries located at different geographical points it is possible for one to scatter his risk. Suppose, for example, a man were looking for railway securities; railways, as every one knows, are dependent upon freight for their principal source of revenue, and the character of the freight they carry depends upon the products of the districts they serve. In one case the freight may be largely wheat, in another cattle, or automobiles, or lumber, or coal. If business drops off in one of these districts, the volume of freight declines in proportion, and the result is lower earnings. This is plain enough, and the way to guard against such eventualities is to scatter the risk by a geographical distribution of investments.

SANTIAGO, CHILE

"Like the threads of a giant web ALL AMÉRICA CABLES radiate out from New York commercially enmeshing Central and South America.”

Now after the risk is scattered geographically it is possible to diversify it still further in a given area. In every geographical district there are enterprises of varying kinds; railways, for instance, public utilities, banks, concerns engaged in manufacturing, and of course there are the bonds issued by the States and municipalities in that district. Circumstances might develop which would embarrass the whole section, but the activities being carried on there would not all be affected in the same degree. Some would suffer more than others, and the man who owned securities of more than one concern would stand just that much better chance of not losing all he had. In other words, diversification of investments can be accomplished in a district just as in the country as a whole. Marketability is something to consider in this connection. Some securities have a broader market-are easier to sell-than others. And when there is a broad market for a security it usually sells at a higher price than one for which there is little demand. It therefore yields less, and return must as a rule be sacrificed for marketability. As

a general rule, however, it seems to us that a person with little money and liable to need that money at some unexpected time should consider only securities that are readily salable for his first investments. When the number and amount of his holdings have grown, he can, in all probability, afford to invest part of his capital in securities which he will never have to convert into cash. He can therefore scatter his risk among marketable securities and those difficult to sell, obtaining a much higher yield on the latter class than is probably possible in the case of the former. But every man should bear in mind that the day may come when he will need ready money, need it desperately perhaps, and he would do well, therefore, always to keep sufficient of his funds invested in securities on which coch may be realized

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ALL AMERICA CABLES

The

First National Bank of Boston

Transacts commercial banking business of every nature

Make it your New England Bank

Capital, Surplus and Profits $37,500,000

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The Successful Business Man

realizes the value of a connection
with a responsible investment house

THE DEMANDS of his own
business often preclude the
exhaustive study of bonds
necessary for discriminating
selection, yet his abilities in his
own field result in surplus
funds for investment, and his
good judgment dictates the
wisdom of placing at least
a part of these funds in the
securities of companies not
associated with his own.

Moreover, the successful
results of his own specialized
efforts suggest a connection
with an institution which

has made investments its par
ticular study.

We count among our clien
tele many successful business

men to whose success we
have contributed in no small
part through the safe and
conservative investment of
their surplus funds.

We could, no doubt, render
a like service to you. As a
preliminary may we send
you our booklet-"Choosing
Your Investment Banker,"
together with our current
list of bond offerings?

Ask for List OM-18-you will incur no obligation

HALSEY, STUART & CO.
Incorporated-Successors to N. W. Halsey & Co., Chicago

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FIRST FARM MORTGAGES
AND REAL ESTATE BONDS

Free from the Risks of Business

Netting 6%, 6% % and 7%

With business and finance confused by the aftermath of war, prudent people a e turning more and more to safe investments on food producing land. They know well-placed First Farm Mortgages are free from the perils and pitfalls that face business ventures.

For more than 37 years we have been handling these land secured investments, and our clients have never lost a dollar! Write for descriptive pamphlet "S" and list of offerings.

E. J. Lander & Co.

ESTABLISHED 1883

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PHILADELPHIA
MINNEAPOLIS

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BOSTON
MILWAUKEE

FINANCIAL DEPARTMENT

(Continued)

other thing: if a loan is to be negotiated. at the bank, far better terms can be had when marketable securities are offered as collateral than is possible when the collateral consists of securities for which there is little demand.

The three main points to keep in mind, therefore, when the risk is to be scattered by a diversification of investments are: first, geographical distribution; second, distribution among various industries in a given area; and, third, marketability. A woman recently sent us a list of her investment holdings and asked our opinion regarding additional purchases. She had quite an enviable list of bonds, but they were all of the same kind; not of the same corporation, but of corporations all engaged in the same kind of business. Her risk was scattered geographically, but it was, after all, more or less the same risk wherever it was. And as it happened, this class of corporations were all subject to the same influences, which affected them practically alike.

Like most good things, diversification may be carried to an extreme. The objection of all the eggs in one basket would scarcely apply to the United States Government bonds, for example, and yet one of our readers wrote us that he did not think he ought to buy any more Liberty Bonds because he wanted to scatter his risk. These bonds are the obligation of the whole United States, not any one part of it; they are themselves probably as diversified a risk as it is possible to obtain, and if the whole country should go to smash United States Government bonds would be the last obligations to default.

Sums can also be divided into unnecessarily small units. If a man has $1,000 to invest, for instance, and puts it into the $100 bonds of ten different companies, he has ten companies' financial affairs to watch. One-hundred-dollar bonds usually sell higher than the larger pieces, too, and for this reason he may sacrifice a considerable return if he favors them too frequently in preference to the larger denominations. Not that $100 bonds are bad things. On the

Write this Booklet contrary, it is difficult to conceive of

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any better investments for the beginner or the man of moderate means.

There is little difference of opinion about the advisability of scattering investment risk in this way, and certainly most people practice it who are accustomed to buying securities. It is very common to hear a man say, in reference to some bond or stock, "Yes. I know it's good, but I've got some already and don't think I ought to put any more money into that particular thing." The objection may be made that the chances of gain are lessened by diversifying one's investments, just as are the risks of loss. This may pos sibly be true; but the aim of investing is not to speculate for profit, but to guard against possible loss. And in the long run the latter course is almost universally the more profitable.

JUDGED BY HIS CABINET

EPORTS are daily more frequent that

R the President-elect will put in his

Cabinet men whose sole claim to office is service to the party, regardless of their fitness for the positions.

Does this mean that we are to see Messrs. Root, Wood, and Hoover passed over-three statesmen supreme in their respective spheres-and the posts of Secretary of State, War, and Interior given as a reward to those who swung à pivotal State or delivered a delegation to Mr. Harding? Is a man to be made Attorney-General whose single claim to the position is that his cynical predicion came true that the selection of the Republican candidate would be made, not by the rank and file of the party, out by a little group of professional politicians sitting in a smoke-laden room in the Blackstone Hotel in Chiago at 2:11 A.M.?

No one knows the international sitution better than Mr. Root, no one has ad more practical experience in foreign ffairs. No one is more fitted to direct he War Department than General Wood. And who has shown such contructive ability and sane understanding of the country's economic needs as Mr. Hoover?

The objection is raised: "The politiians do not want these men."

Are we, for that reason, to bow down our heads in silence?

1912, 1916, 1920-thrice the leaders of reaction have been blind. To-day hey take to themselves the credit of Mr. Harding's victory, thinking it was ue to their sagacity and their skill, whereas in point of fact it was due to The silent sick man in Washington.

Failure to give the country the benefit f the services of Messrs. Root, Wood, nd Hoover will mean that Mr. Harding will lose the confidence of the great mass of the Republican party before ven he takes the oath of office.

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THE OUTLOOK'S

BOOK STALL

We shall be glad to purchase for you any book that is in print. If you know the names of the author and publisher, please state them. If you do not, please write the title of the book clearly and we shall make every effort to secure the book for you. Books ordered will be sent as promptly as possible upon receipt of the publisher's price plus 10c for postage. If the price is not known it will be ascertained for you upon inquiry.

THE OUTLOOK'S BOOK STALL 381 Fourth Avenue New York City

A BROAD VISION OF

THE COMMERCIAL FIELD

The volume of commercial business carried on here as well as the years of experience we have had in serving the banking requirements of those engaged in trade and industry, have given us a clear understanding of their needs and a broad vision of the commercial field. Mercantile and industrial concerns, whether large or small, will find us readily helpful in matters of trade and credit information, thorough and consistent in counsel and adequately equipped to conduct all banking transactions involved in their business.

You are cordially invited

to consult with us.

The CONTINENTAL and COMMERCIAL BANKS

CHICAGO

OVER $55,000,000 INVESTED CAPITAL

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BY THE WAY

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MERICAN parents often deplore the abruptness of their children's speech, but few American children would venture to address their parents in the incisive language sometimes used in the Gladstone family, as indicated in a recent book by Mary Drew, Mr. Gladstone's daughter. It bored Mr. Gladstone, she says, to hear people apologetically differ-"My dearest love, I really think you are wrong," etc. "He thought it more to the point to be short and sharp-'A lie!' It is impossible to forget Lord Morley's face," adds Mrs. Drew, "when he first heard one of us say to Mr. Gladstone-'A lie!"" This freedom of expression half startled and shocked guests at Hawarden, Mr. Gladstone's daughter observes, but it broke the seriousness of discussion and "put every one in good humor."

One of Mr. Gladstone's little granddaughters, Mrs. Drew relates in illustrating another aspect of the great statesman's character, had lost a pet robin and had given the bird a solemn funeral, finally laying a cross of flowers on the grave. On the same day came the news of President Carnot's assassination. In talking of the event with a visitor Mr. Gladstone asked with great earnestness, "Did he die a Christian?" The little girl, full of her own grief, whispered, "Does he mean the robin?"

The Central Branch of the Y. M. C. A. in Brooklyn is said to be now the largest Y. M. C. A. organization in the world. A recent membership drive brought its list of members up to 10,018.

"Terribly rough, isn't it?" said the stranger on the ocean liner, as reported in "Everybody's."

"Wal," replied the man from the farm who was going across for the first time, "'twouldn't be so rough if the cap'n would only keep in the furrows!"

How far should a writer of an article intended for popular consumption go in introducing unfamiliar words? Where is the line to be drawn between pedantry and exactness of expression? Does the really great writer demand an excursion to the dictionary at least once for every page? Readers of an entertaining and suggestive article on "Old Age" in the January "Atlantic" may find these questions presenting themselves as they strike such lingual snags, in the otherwise smooth current of their reading, as "gerontology," "paidology," "endocrine," "soma," "senectitude," "phyletic," and "goru."

A newspaper paragraph announces the death of "the last surviving participant in the famous race between the steamers Robert E. Lee and Natchez in 1870 from New Orleans to St. Louis." Mark Twain gives an interesting account of this race in his "Life on the Mississippi." The R. E. Lee, which won the race, went from New Orleans to Cairo, he says, in three days and

one hour. Seventeen years before, however, the Eclipse made the journey in three days three hours and twenty minutes-a faster trip than the Lee's, according to the humorist. He proves the assertion in this way: In the Eclipse's day the Mississippi's course between the two ports was 1,080 miles; her speed was therefore about 14% miles an hour. In the Lee's time the river had shortened its course to 1,030 miles; her speed was therefore only 14% miles an hour.

The races between the Mississippi steamers in the old days, says Mark Twain, were not always to the swift. Pilots, he maintains, were not all alike, and the smartest pilot would win the race. If one of the boats had a "lightning" pilot, with a genius for steering, he might send his craft in ahead of the better boat. Much depended, too, on the "stripping" of the boat-i. e., the ridding it of useless incumbrances. When the Eclipse ran its great race, says the humorist, it was asserted that pains were taken to scrape the gilding off the fanciful device that hung between the steamer's chimneys, and that for that one trip the captain left off his kid gloves and had his head shaved!

First Merchant (as reported in the New York "Trade Record")-"How's business?"

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There is an astonishing variety of dates, according to a new book on "Tropical and Sub-Tropical Fruits." Several thousand varieties of the fruit have been recognized. Those of commercial importance, however, are limited to a few score. The most widely sold are called "Halawi," but it is said these dates are not esteemed by the Arabs, who grow them for export. Many of the nomad tribes prefer a "dry" date, while the American market is accustomed only to "soft" or "wet" dates. Americans who have eaten good dry dates often prefer them, it is said, to the soft variety.

Arabia, it may be remarked in connection with the above paragraph, contains possibly the greatest tract of unexplored territory now existing in the world. According to one authority, no European traveler has penetrated more than a hundred miles from the coast, except at one or two points, in the vast southern half of the peninsula, where about 750,000 square miles of territory (largely desert) remain unexplored.

"My father," says the college joker as reported by the "Harvard Lampoon," "weighed only four pounds when he was born."

"Good heavens! Did he live?" says college joker No. 2.

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