FORMAN GEORG How $30,000,000 was During our 32 years in business we have invested $30,000,000 for our clients in 5% to 6%% farm mortgages, their investments ranging from $200 to $3,500,000. Not a dollar of principal or interest has been lost through any investment negotiated by us. There are three distinct operations in the Forman method of making farm. mortgages: 1. Approval of loan territory as to moisture, fertility, etc. 2. Exhaustive examination, in approved loan territory, of local real estate laws, land values, responsibility of local correspondents, etc. 3. Investigation of individual applications, and granting of loans to acceptable borrowers. In a 28-page booklet we explain the Forman method of conducting each of these three operations, which has produced such satisfactory results for inWrite for this booklet. vestors. Financial World, continued from page 75 and provide against future charges such as pensions for disabled soldiers. OUT he also intimated that the Entente B Allies, because of their large war in debtedness to America, will be handicapped or crippled in the future race for financial rehabilitation. This view of the case, if correct, would doubtless bear on the question how Economical Germany's good or bad an investment Future would our loans to those coun tries turn out to be. It logically leads to the further inquiry: Is the German doctrine sound, that Germany is fortified for the economic future as her European enemies are not, because she has fed her own people and raised her own war loans solely at home? First, it should be observed that, however much of value Germany may attach to that policy theoretically, she certainly did not adopt it of choice. Beginning even before July 31, 1914, Germany has up to the present moment strained every conceivable facility to do exactly what the Entente Allies have done obtain access to the supplies of American producers. Shut off by the blockade from direct communication with over-seas markets, she has offered large inducements for contiguous neutral markets to perform the service for her. Even when Holland and Denmark and Norway were restrained from forwarding to Germany the precise consignments of food and merchandise which they, in their neutral capacity, had bought and imported from America, it still remained possible for such neutrals, after promising that the imported goods should not be sent along across the German border, to send in place of them the similar articles of their own production, filling the resultant void in home consumption by increased importations. Our own exports of merchandise to Sweden, during 1915, undoubtedly for this reason, increased six times over those of the year before the war; those to Norway five times, to Denmark four times. The actual increase in our exports to the three Scandinavian countries and Holland was no less than $187,000,000. Now the total value of our export trade with Germany during 1913 was $352,000,000. The German Government was at least using every effort to do exactly what it contends that its European enemies are ruining themselves by doing. This was so, even in outright borrowing of capital. When the Kaiser, in a private interview of 1916 with our ambassador at Berlin, querulously accused the United States of lending to the Entente Allies while refusing and promptly proved, that the German Government had placed a loan in the United States before any of its European enemies had done so. Wall Street was perfectly well aware that Germany would have borrowed more if American investors had been willing to take the loans. The reasons why her direct American borrowings were restricted to the $20,000,000 one-year notes of March, 1915, and May, 1916-nearly half of which were not paid at maturity, but merely "extended" was that Germany had been driven from the seas, that experienced financiers looked for her eventual failure in the war, and that the whole community's detestation of Germany's criminal practices in Belgium made even a usually unemotional investor ashamed to lend to her. Within the past few months Germany has made extravagant bids for advances of capital from Holland, and has virtually coerced Switzerland into lending, through refusing entry to certain Swiss merchandise unless the loan were granted. But if the Entente policy of buying and borrowing abroad was a policy of economic disaster, then why should imperial Berlin have solicited foreign capital from Amsterdam and Wall Street, and foreign merchandise from Scandinavia? The answer is obvious enough, from the practical point of view. Berlin recognized that in Germany's case also there were great and immediate advantages in obtaining both war material and war loans from the outside world. This does not, however, alter the fact that after the war the German Government's war loans will be held by its own people, whereas a very considerable part of the war loans of the Entente Allies will be held abroad. If all other things are equal, then the nation whose government has borrowed at home and pays the interest to its own citizens is economically better off than the government which has borrowed abroad and must send the interest money out of the country. Bargains in Railroad Well secured Railroad Mortgage equity following these Bonds, the Send for circular giving list of Bonds yielding an annual income, if held to maturity, of 6% to 10%. HARTSHORNE BATTELLE enormous foreign borrowings of the United States in the thirty years after 1865-on securities of its government, its railways, and its miscellaneous enterprises-were instances of the other. In each case the object was to conserve for necessary use at home the supply of domestic capital. Failing in this, the situation in the cases indicated would have presented the alternative either of economic stagnation because of exhausted capital or of eventual economic disaster because of recourse to paper-currency inflation or extravagant use of credit. The fact that all the loans were held at home could not have affected the dilemma. Germany has accepted this alternative. Compelled to raise her war loans entirely at home, and doubtful of her people's resources, her government at first refused entirely to increase the taxes and has even now increased them to a considerably less amount than the annual interest on her war loans. One result of this policy was that, by 1916, one-sixth to one-fifth of the proceeds of each war loan had to be used in paying interest, and that even with the subsequently increased taxes something like one-twelfth has still to be similarly obtained. This necessarily increases the burden of the debt itself. But a second result of the German situation has been the progress of the country's currency inflation and credit inflation at a pace matched nowhere else but in Russia. This The German economists themselves confess with singular frankness that those conditions must continue after war. They have endeavored to explain how Germany's sales to the outside world will be helped after return of peace by the depreciated currency and the very unfavorable foreign exchanges, because outside markets will thereby get the goods at lower prices. was hardly our own experience with the depreciated currency and adverse exchanges left by the Civil War inflation, when it was imports, not exports, which were abnormally stimulated, during the decade after the war, by those conditions. The president of the Reichsbank has produced yet another theory. It is that the German people will not have to bear the post-bellum burden of the war debt. The German Loan Bureaus (which have already issued $1,500,000,000 currency on the security of all sorts of personal property) "will make it their special business," during at least the four or five years after return of peace, to lend to citizens who "have subscribed to the war loan and need money." This, however, is nothing but paying off debt with new debt. It is Mr. Micawber, dealing in thousands of millions. THE HE problems which will confront all the belligerents when the war is over, of paying the interest on the war debt and providing for its redemption, will be serious enough. But the problem of dealing with the foreign war debt will Internain most respects be the least tional formidable, because that will Trade to be met through the familiar Settle international War Debts machinery of trade. So long as international trade continues-and it has always hitherto expanded enormously in the aftermath of a great war-the means of settling foreign obligations will continue to exist with every thrifty nation. The process will undoubtedly be a long one; it may be expedited by a new movement in the economic development of the world. What new situations may arise hereafter from the fact of governments being creditors of other governments on such a scalefor, as against our Treasury's present or prospective loans to our allies, the British Government has already made similar loans of $5,000,000,000 and the French Government of something like $800,000,000 -it is not easy to foresee. No such relations have ever before existed in political history. The natural policy would be to transfer these obligations in due course from the hands of governments to the hands of private investors-a policy for which provision was made in the statutes authorizing our Treasury's foreign loans. OUT the consideration as to which there BUT the considerationor dispute is the position which the United States will occupy in the economic field on return of peace. The statement of the new German Chancellor that "if the The SuEntente should win with Amerpreme Posiican help America would step tion of the into England's place," was no United States doubt colored by a wish for the displacement of England; but it showed how the situation impresses a German mind. It is true, on the other hand, that the United States has deeply involved itself in the political and economic outcome of the war. It is possible to argue that if we had held aloof, dismissed the European struggle as no concern of ours, and merely sold our foodstuffs and materials at the highest prices obtainable, we should have got into our own hands, before the war was over, a good part of the tangible wealth of the belligerent powers. The picture is not attractive. Realized, it would suggest not remotely the kind of profit accruing to a nation which might gain the whole world and lose its own soul. Your Insurance Premiums are many times invested in KANSAS AND OKLAHOMA FARM MORTGAGES and you know your policy will be paid in full when the company is called upon to do so. Life Insurance Companies are the largest investors in FARM MORTGAGES and they demand. SAFETY AND INCOME Profit by the example set by these large investors and invest your savings or surplus funds in some of our first mortgage 5%% and 6% farm loans. Our booklet, "Farm Mortgages as Investments," explains why farm mortgages are safe and is free for the asking. Write today-learn what a simple form of Investment the farm mortgage loan really is. THE FARM MORTGAGE CO. Ο INVESTOR BY S. P. HARMAN NE of the fundamental problems with which the investor, be he novice or expert, is confronted at the very outset of any financial venture is the choice of securities suited to his means and circumstances. In some cases, safety of principal and certainty of income are essential; in others, a higher return may properly be sought than is obtainable from investments of the most conservative sort. In order to make a proper selection, it is needful to bear clearly in mind the underlying distinctions between the various classes of securities; in the first place, between stocks and bonds, and next, between the several varieties of stocks and bonds. Perhaps the best way to arrive at a good understanding of these distinctions is briefly to survey the methods of a corporation which, in financial phrase, is about to "enter the money market." When a railroad, a company which furnishes gas or electricity to a city or to the public, a street railway, a manufacturing company, or almost any other corporate organization engaged in business for profit, wishes to raise funds to carry on or to extend its activities, there are usually two methods available to secure the needed money. It may issue stock, or it may sell bonds; in either case, it will probably market such an issue of stock or bonds through a banker or a group of bankers and bond houses organized as a syndicate. What is the essential form and content of a bond, and wherein does it differ from the stock which a corporation may sell in order to raise money? In a word, a bond is a promise to pay, of the same general purport as the promissory note of an individual who borrows from a bank or a friend. In the face, or text, of the bond there is set down the date when such repayment of principal will be made; the rate of interest and the dates, semiannual or quarterly, when it will be paid; a recital of the security on which the bond is based; and various other pertinent facts. A corporation, however, may be expected to earn more than the 4, 5, or 6 per cent interest which it promises to pay on its bonds. Investors would hesitate to buy the securities of a concern which could do no better than earn its interest charges. It is here that the stock issue comes in. A certificate of stock promises to repay nothing. It represents so many "shares, indicating that the owner has so many |