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cies; and when the necessity for action The King, with his high qualities and comes, he and his Ministers are of one flexibility of mind and method, has mind. His supremacy in foreign affairs unrivaled distinction and fascination. is complete, because he has broken There is no lack of either firmness or away from the conventional formalities power, and there is a characteristic of court life, and, without straining of charm which suffuses his personality as royal prerogative or any challenge to a smile softens and irradiates a face. Parliament or Ministry, is exercising It is a winsome rather than a commandmuch of the masterful authority of an ing personality. He is neither selfAmerican President.

opinionated, nor argumentative, nor The King's method is the art of man- domineering. He is tactful. considerate, aging men and regulating affairs by short and persuasive. He deals with matters talks, informal conferences, and quiet of state or of diplomacy with the light understandings. He writes fewer letters touch of a keen observer and a man of and state papers than Queen Victoria. the world. While not without sentiment When his reign comes to an end, his and ideals, since he has a lofty enthusidiplomatic correspondence may be as asm for peace-making, he is content with meager as hers was voluminous. This proving how useful the business of reignwill not be a proof of lack of industry or ing can be made. He does not exagneglect of public business. It will merely gerate the value of his services, nor mean that he was economical of his consider himself indispensable to the time, left the drudgery of correspondence Empire, nor encourage flatterers to talk to his secretaries, and found it easier about his mission in world politics. He and more effective to talk over matters does not love power for its own sake, of state and diplomacy with public men nor is he dogmatic respecting any order than to dictate or to revise letters, which of policy. If he lacks the German Emwould be exposed to critical examina- peror's artistic sensibility and eclectic tion. If he were a diplomatist with 'faculty for absorbing information, he inscrutable mysteries to conceal, like does not pose as a many-sided genius Napoleon III., this might be a dangerous who knows a good deal about everything, practice. His own methods are nor does he persist in taking the center straightforward and his motives so sin- of the stage and overshadowing rivals. cere that frankness is a safe resource. His knowledge is precise and at his He wants honest dealing among nations fingers' ends; his memory of details, and a peaceable solution of every ques- names, and faces is phenomenal. He tion, and his opinions are as candidly evades publicity, and prefers to work, so expressed to foreign Ambassadors as to far as possible, without observation. his own Ministers. He is an attentive His quickness in noticing petty things listener, and his unforced, businesslike like a misplaced decoration or a flaw in comments, while not brilliantly phrased, a court ceremonial has given place to are practical and to the point; and who mastery of great affairs. He labors ever hears them is impressed with the strenuously for high-minded ends, but reasonableness and unaffected good does not encourage heroics over his sense of his opinions. He brings to career. His is a personality that does every conference and discussion the not repel support by affectations of manspirit of good breeding and conciliation. ner or vagaries of mind. He attracts Without sacrifice of dignity or relaxation and hypnotizes men and nations by of etiquette, he blends distinction and communicating to them his own concilicordiality in charm of manner. The atory spirit. result is the same whether he is confer- The King's activities are not restricted ring with public men at English country- to foreign affairs. His Ministers are houses, or entertaining distinguished responsible agents of Crown administraEuropeans in Paris or Marienbad. He tion under the supervision of Parliabegins by setting them at their ease and ment; but he himself stands apart from ends by securing their co-operation and political groups and exercises a salusupport.

tary influence in facilitating solutions of

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national and Imperial questions. There widening sphere of activities, is adapted is no meddlesome activity, but there is to modern conditions and to world polidiplomatic use of the resources of his tics. Old ideas of diplomatic intrigue exalted station and social prestige. and racial aggression are passing away, Peace was made with the Boers on mag- and a new sense of community of innanimous terms, because he thought that terests is felt by progressive nations. the time had come for a suspension of Napoleon III, was a crowned intriguer; barren warfare. Under two administra- Gambetta was a tribune of democracy ; tions he has shown his faith in con- Cavour had an enthusiasm for national ciliatory processes in Ireland. Military unity ; Bismarck completed the work of reorganization was a miscalculated fail- Frederick the Great; Gladstone was the ure until he took it up; and it became world's most conscientious citizen. Eda definite policy when the report of ward VII. is an equally characteristic Lord Esher's commission was issued. man of his time. He represents the When Mr. Haldane's scheme for the modern idea of the responsibilities of creation of a new system of home defense power, and that is more potent than any was exciting only languid interest, it medieval theory of sovereignty by divine was the King who imparted a powerful right. He is the central figure of a system impulse to it by inviting the Lords Lieu- of social and political order, and he has tenant to a conference at Buckingham set an example of personal service for his Palace. The settlement of the railway country and for the world, of keeping faith controversy was due in no small degree with nations, and of promoting a neighto his personal influence with the Chair- borly feeling of peaceable fellowship man, brilliant as was Mr. Lloyd-George's outside the Empire as well as within it. management of a difficult affair ; and it He has increased the dignity and preswas not until the seven years' armistice tige of the Crown until the destinies of had been concluded that there was pub- nations are powerfully swayed by a single lic knowledge that he had been helpful will; and the Kingdom is not less settled in averting a calamitous struggle. He in its constitutional order from his silent stands behind his Ministers in grave activities, and a world pulsating with emergencies and assists them by timely the free competition of the progressive hints and judicious suggestions to the forces of Western civilization is more right men, and the reinforcement gen- peaceable, conciliatory, and reasonable erally proves irresistible. He cannot be in consequence of his diplomacy. He deprived of opportunities for free action knows that he has resources and opporby the settled order of constitutional tunities for supremely useful work, and, practice, and there is no risk of the recognizing moral obligation, he does it development of absolutism when his quietly and effectively. persistence is held under restraint and On the human side the King may be he is indifferent to the issues of party said to have been specially trained for politics. The King is able to work in this work, which has been inherited with his own way because he is screened from the Victorian traditions and is a portion observation. The cymbals are not of the practical business of reigning. sounded either at Court or in the press. His career is a study of the evolution of In place of self-advertisement and undis- character. While his mother was writcriminating laudation there is wise reti- ing state papers in seclusion he touched cence. Etiquette protects him against the world on every side and became thoughtless discussion, and it is not con- intensely human. In place of the Tailor sidered good form in society to talk King, preoccupied with etiquette and about him. The newspapers are dis- ceremonial, there is a master workman creetly silent, and there is no dazzling in a progressive world; and so human glamour from publicity to blind his sub- is he that he can confer Knighthood jects. They trust him, and no safeguard upon a workingman and invite sturdy is needed against irresponsible power. John Burns to Windsor as an honored

The King's personality, with its at- guest to meet the German Emperor. tractive charm, restrained force, and



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FIRST PAPER THE FIRST PRINCIPLES OF INVESTMENT O a very large majority of the inextinguishable spark of imagination

readers of this magazine there bethought him of the dried gourds that

arrives a day when it becomes hung upon vines here and there about necessary to decide upon the disposition the rocks. With a sharp stone he hacked of a surplus sum of money. Such sum off the neck of a gourd, and, filling it with may have accrued either from the labor water, he carried it up to his care. Ilis of brain or hand, or from inheritance. comrades examined the rude l'essel covThis surplus should not be allowed to etously, but were too stupid to imitate remain idle even for a single day. the craftsman. Next day he cut off the Wisely directed, it may prove a more neck of another gourd. The first, howpotent earner than its creator. Limited ever, was sufficient for his own wants. opportunity within the sphere with which Therefore he loaned the second gourd the latter is familiar makes it imperative to a neighbor, and as consideration for that he seek other fields wherein his the loan the latter agreed to fill both surplus may work and expand to his gourds and bring them up to the cave at further profit. For the workman is now nightfall. Soon this skillful workman the prospective investor. His mission had fitted out the entire tribe with water is to select that form of investment best gourds, exacting as interest upon

bis suited to his peculiar needs and expe- loans tribute of berries, fish, and roots. rience.

Presently the tribe, delighted with his There are to be found in the diction- cleverness, threw the reigning chieftain, ary few more significant words than the a foolish old fellow, over the cliffs and noun “investment.” It is fraught with elected the gourd man in his stead. The important meaning for the present gen- latter was probably the earliest type of eration and for posterity. An under- investor, or one who loans his surplus standing of the principles which underlie earnings to others for a considerathe science of investment has often tion. marked the line between poverty and To-day the investor is the fountainprosperity. The study of this science head of world development. He turns is fascinating as well as profitable. It the dream of the inventor into useful suggests a delightful play of the imagina- reality. He furnishes the sinews of tive faculties while at the same time material progress by helping with his demanding the exercise of shrewd prae- savings to shape and complete great ticality.

enterprises. This is the side of investThe business of investment dates back ment that must appeal to every person's to the first glimmer of intelligent thought imagination. But before he may exeramong human beings. Investors prob- cise that very pleasing faculty with wisably existed before the birth of intelli- dom and profit, he must for his own gible speech. In a now obsolete primer safety drill himself in the rudiments, at of political economy there used to be least, of investment value. It is his duty related this anecdote concerning a primi- towards himself and society at large to tive tribe of cliff-dwellers. At night, learn the rules whereby he may distinwithin the caves which they had scooped guish between good and bad investments, out of the rocks, these shaggy wild men and to adhere to these rules in their suffered from thirst. But they dared not selection. If he does not do this, the go down to the water-hole after dark man with a surplus is no longer an infor fear of savage beasts. Finally, one in restor, but has degenerated to the plane whom must have burned the divine and of the speculator who helps create noth


ing; who is, in fact, content to profit by increase in market value, under normal the actual destruction of value. Every conditions." business man is, of course, an investor, These principles are fundamental. since previously accumulated savings They should be applied to the selection are involved in his business. But to the of any form of investment whatsoever. management of that business he brings Yet they need not be regarded as absoa special knowledge. Thus equipped, lutely rigid, but,may, like the Constitution he may, in anticipation of relatively under present-day construction, be intergreater returns, legitimately assume risks preted to suit cases and circumstances. that should be shunned by one who for For instance, a security which could be the sake of a fixed income intrusts his purchased with wisdom by a shrewd and savings to the control of others.

well-informed business man might be The prime object of this and succeed- wholly unfit for a trust estate or ing articles is to aid by suggestion the woman. comparatively inexperienced investor to Having in mind the three cardinal distinguish between sound and unsound points to be considered in all investsecurities. To-day each provident citi- ments, i.c., safety of principal, readiness zen is offered countless chances to make of convertibility, and income, the investor his money work for him, or literally to will wisely go to his banker and, stating give it away to unscrupulor': promoters his own peculiar circumstances, will whose assets consist entirely of enticing consult the latter as to the advisability words. Each day his mail is filled with of his investing in bonds, or stocks, or advertisements and circulars setting mortgages. It is impossible for the forth the attractions of innumerable average investor to decide conclusively bonds, stocks, mortgages, home sites, upon all points of merit and demerit and mining ventures. In the attempt to without expert advice. He would not sort and classify this chaotic mass con- think of attempting to conduct a lawsuit fusion and bewilderment must necessa- unadvised, or to diagnose a disease. rily arise in a mind absorbed by habit in Perhaps it may be his first experience in some special field of work.

investment matters. The writer knows In a small Western town there lives a professional man, a teacher, who at the to-day a young widow whose husband, a age of thirty had never taken the trouble physician, died a { w years ago leaving to comprehend clearly the difference her a home and some $40,000 in life between bonds and stocks. He never insurance. It so chanced that this read a financial paper or report, and had young woman was wholly unfamiliar with not the remotest acquaintance with infinancial matters. A friend of her hus- vestment values or how to measure them. band, a man destined to become later a Because of his ignorance he missed a great financier and world-builder, called golden opportunity to increase his savings upon her. To him she confided her

materially by buying when substantial perplexities. Then this man, simply, and proven securities were low, as they as great men speak, made clear to her are to-day. He felt ashamed to learn the essential principles of investment. from his banker that a bond is a promise Doubtless he was all unconscious of to pay at a given date, the consideration laying down rules. Yet this is what he for the loan being a fixed rate of interest, said: “Mrs. Blank, you must place your while a stock represents the right to, or money where the safety of your prin- equity in, what remains of earnings and cipal is assured. That is the first assets after the claims of the bondholders consideration. You should also be able have been fully satisfied. to exercise control over your principal, It is purposed in this series of papers that is, to convert it, or at least a part of to discuss those classes of investments it, into cash with readiness should occa- open to moderate savings. These insion arise. Finally, we must find for clude steam railway bonds and stocks; you securities that will return the largest the bonds and stocks of public service possible income consistent with the first corporations, such as street railways, two requirements, and that promise to both urban and interurban, gas, electric


light, and water companies; National, and appraises his assets as to intrinsic State, and municipal bonds. No attempt value and marketability. If collateral is will be made to suggest the purchase of offered to secure the loan, it is scrutiany particular kind of investment as nized with the utmost care. Usually a being superior to another. . Final de promise is exacted that the margin of cision in such matters lies between the collateral over and above the sum adinvestor and his banker, or should do vanced be kept at an agreed level during

But there are points of difference the life of the loan. Should the latter that may be advantageously set forth. be unsecured by collateral, the banker It is sometimes far more difficult to usually demands that the note be indirect your idle money into the best and dorsed by one or more responsible permost profitable channels, compatible sons. Every possible effort is made to with safety, than it is to earn that money guard the principal. The question of by daily business operations with which return is entirely a secondary consideraone is entirely familiar. What to buy tion. Interest rate is determined by the and what to sell ? When to buy and relative security of the loan and condiwhen to sell ? And why? These are tions of the money market, just as in the questions which no man may presume to case of the yield on a bond for the answer positively. Yet experience has payment of which tangible corporate established beyond argument certain property is pledged. The banker is, of principles for the guidance of judgment course, acting in a fiduciary capacity in in the estimate of values.

that he is investing the money of his The care that should be exercised in depositors. The law compels him to choosing an investment may be well exercise care. Why should not the illustrated by the steps that a bank presi- individual investor do the same for his dent takes before making a loan. He children and himself ? inquire; into the borrower's general In a succeeding paper the general standing in his community, financial and differences between bonds and stocks otherwise. He examines his accounts of the investment class will be discussed.





OLEY, Indian Territory, is the search of “ better homes, larger opporyoungest, the most enterprising, tunities, and kindlier treatment.”

and in many ways the most inter- It is a striking evidence of the progesting of the negro towns in the United ress made in thirty years that the presStates. A rude, bustling, Western town, ent northward and westward movement it is a characteristic product of the negro of the negro people has brought into . immigration from the South and Middle these new lands, not helpless and ignoWest into the new lands of what is now rant horde of black people, but land-seekthe State of Oklahoma.

ers and home builders, men who have The large proportions of the north- come prepared to build up the country. ward and westward movement of the In the thirty years since the Kansas negro population recall the Kansas Exodus the Southern negroes have Exodus of thirty years ago, when within learned to build schools, to establish a few months more than forty thousand banks and conduct newspapers. They helpless and destitute negroes from the have recovered something of the knack country districts of Arkansas and Mis- for trade that their foreparents in Africa sissippi poured into eastern Kansas in were famous for. They have learned

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