of this fact the outside broker flourishes exceedingly, as he is prepared to execute all kinds of orders, small and great; sometimes he is an honest man, sometimes he is not, and the same may be said of the inside broker. The question of getting into touch with the right kind of a man is therefore all-important.

Ability to Read the Financial News Necessary.-The next thing is that the investor should be able to read intelli gently the news published in the financial columns of the. daily press. This is explained in the Financial Guides, to be obtained at the book-stores.

A Knowledge of the Guiding Principles Necessary.-Having secured the right kind of a man and learned how to read the financial news, the next thing should be a mastery of certain guiding principles.

The small investor should not touch mines of any kind; he should confine himself to industrial schemes, and in so doing give his attention to the man and the figures. The directorate of a company is exceedingly important. He should ascertain all he can about their past history in connection with business, and especially the capacity of the managing director for his special duties. The great secret of the success of some of the industrial companies has been the expert management from beginning to end. Study of Accounts Necessary.-Next the investor should study the accounts, going through the balance sheets for various years. He may say that he has not time, and perhaps not an eye for figures, in which case he will have to trust to the judgment of others, and that is where the services of a really good broker are invaluable.

All these necessary features of sound investment go to show that you cannot make money in this way without working hard; but money can be made by watchfulness and care. The investor should so train his own judgment that he need not be obliged to follow the advice of "friends" nor the ipsi dixit of the broker.

Established Principles.-The following are some of the established principles of investment which are well worthy of attention: (1) Don't buy shares in a company which is about to pay big dividends. (2) Don't be led away by showy prospectuses, big names, and a lot of advertising. Know the man, the class of business, and the trade conditions. (3) Don't invest in a company with a bad history, however attractive the new regime may be. Follow lucky men and companies with good records. (4) Ask: Is there a demand for the products this company deals in? That'a a question which determines good investments from mero speculations. (5) Note the startling changes in prices and trace them to their origin; in a word, know what you are doing."

TRADE AND SPECULATION

The Principles Underlying Business Success.

Trade is the business of buying and selling for gain or profit in the ordinary course of traffic.

Speculation is buying and selling, not in the ordinary course of traffic for the continuous marketing of commodities, but to hold in the expectation of selling at a profit upon a change in values or market rates.

In order to be thoroughly successful in business a merchant must have a fair knowledge of the basic principles of both trade and speculation.

Basic Principles of Successful Trade.

1. A knowledge or judgment of the value of goods is necessary. Without such knowledge it is impossible for one to do justice to his customers and to himself.

2. Cash Capital To Start With Is Required. No one is justified in commencing a business without the moderate capital usually required to carry it on, trusting to accommodations and credit for success. It is asserted by some authorities that four-fifths of the men who are wealthy commenced business on borrowed capital. This may be true, but it was actually capital, borrowed for no definite period, but for such length of time that it could be paid out of the profits of the business and not from the sales of stock. No one who has tried doing a business without a suitable capital, even if he has succeeded, will advise another to attempt it. It involves an amount of anxiety, a degree of labor, embarrassment, and hazard, which is painful to reflect upon. To do a business altogether on credit requires a fortunate combination of circumstances to make it successful, that no prudent man would predict.

The amount of credit that will be issued to a prospective merchant depends upon the amount of capital he has to invest. The greatest mistake a beginner could make would be to tie himself up with an overstock or with an abnormal expense for fixtures and other opening incidents which would prevent him from buying his merchandise on & cash basis, or, to be more explicit, to do anything that would prevent him from taking his cash discount promptly and regularly.

3. The selection of the right location is important. In a city or town it usually is best to choose a location in the midst of those engaged in the same business. There is

where customers expect to find such trade, and there the mass of them will go to buy. "A poor location," says recent writer on this subject, "can bring about disaster quicker than can anything else. The biggest concern (shoe store) in State Street (Chicago) found the sledding extremely tough when they first opened. They did practically no business. One day they realized they had started in on the wrong side of the street. They moved to the opposite side and the difference in location was noticeable from the start. Business grew by leaps and bounds. Today these people are representative of the retail shoe business in Chicago. A few months on the wrong side would have driven them into the bankruptcy court."

4. Locality Governs Stock Selection.—“The first thing to be considered in buying a stock of goods, writes Mr. W. F. Hypes, General Sales Manager for Marshall Field & Co., in The Workers' Magazine, "is the class of merchandise that will be in demand in the locality in which one expects to engage in business.

"There is a most appreciable variance in the different sections of the country as to the character of merchandise used by the consumer. Some articles that sell well in Ohio do not command any sale at all in Washington or Oregon. The young man who has clerked in a retail dry goods store and learned the business in a general way seldom realizes this. To him, for instance, lingerie is lingerie the world over and he figures that a bit of muslin should sell as well in the far west as it does in the middle states and in the east."

5. A reputation for dealing in the best lines of mer chandise procurable must be firmly established. This is the only policy that will build up a permanent trade. "To buy merchandise of a great number of houses," says the same authority, "is not a good business move, for even the merchant of many years' experience to make. Therefore, it is even more disadvantageous to the beginner to take such a step. He perhaps might save a few dollars in buying his stock indiscriminately, but in the long run he would find himself burdened with a badly assorted stock, and in a short time his shelves would present such

conglomerate mass of odds and ends that his stock, if forced to a sale for any reason, would bring a low price. In other words, the man who will establish certain lines and fill in on those lines as occasion demands, confining himself as closely as practicable to such a policy, always will have a representative stock in such good condition that he can in an emergency realize almost 100 cents on the dollar."

6. Display and Publicity are Absolutely Essential.— Every retail merchant should make an attractive display of his wares in his shop windows. Persons passing in the street may see just the articles they want to purchase and be reminded thereby of this want and become your customer at once, or they may be induced to seek within for what they want in the line displayed.

"The old habit of having merchandise tucked away under counters and in stock boxes long ago became obsolete. The great increase in the volume of sales enjoyed by merchants today is directly attributable to the effective displays in the windows of retails stores as well as to the educating of the buying public—especially the women contingent-has received through the medium of these displays and through reading the up-to-date fashion journals."

The Importance of Advertising. But the most efficient modern method of getting customers is by advertising. To the merchant or dealer who is sure of his ability to All orders on the most favorable terms, the attainment of an adequate publicity is the matter of primary concern. If his circle of trade is properly the county in which he lives, then he should take effectual measures to let every family in the county know what he sells, and on what conditions. It is idle to speak of the cost as an impediment. He might as well object to the cost of sheltering his goods from bad weather, protecting them from thieves, or dealing them out to customers. All the other cost of his business is incurred without adequate motive or return, so long as the essential element of his business is neglected or scrimped. If his location and his stock only entitle him to expect the custom of his own town

and neighborhood, then he should incur the expenses of fully informing that locality. Just so with the wholesale merchant who aspires to a custom co-extensive with his country. If he is prepared to satisfy so wide a demand on favorable terms, the expense of apprising those whom he desires for customers of the nature of his business, the character of his stock, the range of his prices, and the reasons why he should be dealt with, is one which he cannot refuse to incur without gross incompetency and ruinous prodigality. By thus refusing, he increases his expenses for rent, lights, fuel, assistance, etc., from onehalf per cent to three, five and in some cases ten per cent on his aggregate sales, and renders it morally impossible that he should sell at a profit, and at the same time sell as cheaply as his more enterprising and capable rivals. In effect, he confesses defeat and incapacity, and retreats to the rear rank of his vocation.

Some men who know they should advertise are yet so narrow as to confine their advertisements to journals of their own creed or party. If they do not choose to trade with any but men of like faith, this is wise; but if they desire to have the whole public for customers, it is otherwise.

1.

Basic Principles of Successful Speculation.

Fluctuations in values affect the interests of mer chants engaged in regular trade. It is necessary therefore, in order to be thoroughly successful in mercantile business, to study statistics and give note to important political and commercial changes. "Take a commodity," advises an experienced and successful merchant, "and find out the average price of a number of years, excluding from consideration extreme cases, and buy when the price has fallen below the average, or, in other words, when the commodity has become cheap. If the harvest after all be bad, you gain; if otherwise, it does not follow that you are to lose. Sell, and replace your old stock-buy

a new one."

"Everybody is aware," says Mr. Roderick H. Smith, in his masterly treatise on The Science of Business, "how