and extension and of financiering; but the running of its trains almost always behind time and the frequency of accidents have for many years been too great. Of course, the road has been overworked by the magical increase of travel and traffic in the South; but its operation also has been undisciplined and bad. A noteworthy fact of that sad accident was the wrecking of a day coach which was the fourth car from the rear of the train where the collision occurred, although Pullman cars between it and the rear escaped destruction. This day coach was "of lighter construction." New York which are now being electrified have ordered steel cars for their new equipment. The Southern Pacific Railroad and the Southern Railway itself have even built some ordinary passenger cars of steel. The new cars of the Philadelphia subway and elevated service are of steel, and the street cars of San Francisco and other places are made with steel frames. The awful fatality of railroad wrecks will be greatly reduced when the use of automatic safety devices and steel cars becomes general. In the best railroad practice, we are about JANUniversary of the to make another long stride in safety. For instance, a number of devices have already been put in use on the New York subway and the Boston elevated road, which will automatically stop a train before it can pass a signal set against it. Since these devices are accessible, it is inexcusable that two trains should collide in a block, or that any railroad should maintain the savage derailment device which plunges a whole train of passengers off the track as the penalty for the neglect of a careless engineer. The new safety system to be employed on the electrified zone of the New York Central marks the greatest advance that has been made in signal systems. All the signals will be operated by electricity and the lights supplied from the power-house. For trains running forty-five miles an hour, the blocks are 1,200 feet long; between forty-five and sixty miles an hour 2,500 feet long; and sixty miles an hour 3,000 feet long. Electric lights will be used. Automatic stops are provided to operate whenever a signal stands at "danger." On the New York, New Haven, and Hartford and the other electrified lines entering New York City, automatic devices will be used. The lines will be made as safe from collisions as all the machinery that human ingenuity has thus far created can make them. Steel cars, both freight and passenger, are being adopted more and more widely. Sideentrance steel cars were used on the Illinois Central Railroad in 1904 even before a few were used in the New York subway. Steel postal cars have been introduced on the Erie. Railroad, the Santa Fé, the Harriman lines, and many other roads. The Interborough Company, which operates the New York subway, has been severely criticized for not having all its cars of steel, for all the railroads entering THE CENTENARY OF GENERAL LEE ANUARY 19th is the one-hundredth anniversary of the birth of General Robert E. Lee. He was the most heroic figure of the Southern Confederacy and the only Southern man brought into prominence by the Civil War whose character has taken a permanent hold on the imagination and the admiration of the whole nation. There were other Confederate soldiers whose achievements won them military fame-"Stonewall" Jackson to a preeminent degree. But it is not only as a soldier that General Lee won a secure place in American history, nor perhaps chiefly as a soldier. There will, perhaps, forever be dispute whether he did right to resign from the United States army and take up arms against the Union; but no disputant now doubts his sincerity. It is difficult for this generation to understand the attitude of men in 1860 toward the States. In the minds of one great party, a man's state stood as first claimant on his loyalty, the United States next. It was in this school that General Lee was reared, as most other Virginians were. In a sense, he had no sympathy with the. Confederate movement. He was not an original "Secessionist." He knew at an early time, if not from the beginning, that the Union armies would win. His desperate fighting was of battles that he knew would at last end in defeat. But he regarded his duty to his state-his duty to Virginia-as his first duty; and in obedience to this he sacrificed a career that might have made him the principal military figure of the Union cause. Whatever difference of opinion men may hold about his decision, there has come since his death a settled judgment of him as a man. His conduct after defeat-his dignified and sincere acceptance of the result, his abstention from politics, his refusal to degrade his name. and fame for commercial profit, his giving his closing years to the training of youth, the high mind and dignity of the man shown by his bearing and conduct and revealed in his familiar letters-these things have peculiarly endeared him to the Southern people and made him the type, to all the world, of the best that Southern life produced. The very general celebration of the centenary of his birth is a fit acknowledgment of the force of great nobility of character. THE EARNINGS OF LIFE INSURANCE AGENTS N INQUIRY comes to THE WORLD'S times running them along fences. And all this went on while the Bell system was doubling the number of its patrons every few years. The number of telephones continues to increase. It is becoming almost a national characteristic to have one. And a significant fact is that this is not a contest between the Bell and the independent interests but that the American people have been keen enough to recognize, as no other people have, the social and economic power of the telephone and to demand its universal introduction. THE PRESIDENT AND THE CANAL WORK whether the earnings of life. insurance agents are likely again to be as large YOU doubtless read in your newspaper as they formerly were. No. In the first place, so far as the New York companies are concerned, the amended law forbids the payment of commissions to agents on the former very generous basis. Under the old system the agents were paid in proportion to the yearly premium. Under the new law, their commissions are a percentage of the face of the policy. For this reason, those kinds of policies which yielded the largest commissions the various forms of endowment policies with their high yearly premiums are not likely at any early time, if ever again, to enjoy their old forced popularity. The insurance agent of the future will have the insured man for his client, rather than the insurance company; and, while he will have an opportunity to earn a fair income, he will hardly make a large fortune, as many a one did during the period of the popularity of endowment insurance. The business will be more reputable and less lucrative. ΤΗ THE TELEPHONE A NATIONAL HABIT HE history of the telephone in the United States points plainly to the fact that our people put a higher value on their time and convenience than any other people in the world. When the Bell patents expired, telephone companies were organized all over the country. These independent companies competed with the Bell system in many cities, and supplied service to towns which had had no telephone at all before. They were responsible for the introduction of the automatic central, or, as they call it, the "cussless, waitless, out-of-order-less, girl-less telephone." Companies of farmers. and ranchmen strung wires to keep themselves in touch with each other and the world, some something like this when President Roosevelt came home from Panama: "There was a feeling of relief when he reached Washington in safety." Yet you cannot point out any danger that Mr. Roosevelt encountered on that journey one whit greater than the dangers that surround him every day in Washington; and a warship is safer than a railroad train, and Panama than a hundred crowded American cities that he has visited. It was a very sensible thing to do for the President to go and inspect with his own eyes the most important physical work that the Government is doing during his administration. His presence gave a stimulus to the men who are doing the job and his visit gave authority and earnestness to whatever he has said and may hereafter say about it. He has regarded the great undertaking with the utmost seriousness and made the supervision of it as nearly his personal work as possible. The President has also concentrated responsibility by making Mr. Shonts the head of all the work and by giving the heads of departments under him the greatest power possible. This means in effect the taking of the task out of the hands of a large commission-a change that Mr. Roosevelt wished long ago to make in form as well as in effect, but which Congress did not then assent to. By going to the Isthmus, Mr. Roosevelt did an unprecedented thing, but the Canal itself is an unprecedented thing; and the people have the greater confidence in the prosecution of the work because of his direct personal interest in it. But there is no denying the prodigious difficulties, the enormous cost, and the long time that will be required to complete it. The people will have to use a long patience before ships ever go through it. D MINING BOOM URING the last few months there has been a new outbreak of the craze for mining stocks. On the "curb" market in New York, on the markets of Toronto, Denver, San Francisco, Goldfield, Nev., and several other centres, there has been wild speculation in these stocks; new high prices have been made for many of the securities that have been in existence for some time, and hundreds of new stocks have come to light to cater to the extraordinary demand of the people for mining stocks. The WORLD'S WORK has been beset with queries from investors, asking for advice with regard to the purchase of these stocks. To one and all, the reply has been that the small investor should by no means purchase mining stocks. These stocks are to be regarded as utterly unfit for the investment of savings. We shall make no exception to this statement. It applies with almost as vital significance to the stocks of the Anaconda, Calumet & Hecla, and Amalgamated Copper as to the thousand new, glittering, alluring prospects that parade themselves day by day in the advertising columns of the press. This judgment will stand until such time as the mining industry puts off forever the "wildcat" character under which it lives at present and has lived in this country since its beginning. That there are good mines, no one can deny. That there are golden fortunes to be gathered from the purchase of mining stocks at present, is extremely probable. The investor must forget this, and must shun the chance for such fortune for the reason that less than one per cent. of the so-called mines which parade themselves in the public prints will ever return one cent of the money put into them, let alone pay dividends to their stockholders. On this point there is abundance of testimony. In a recent editorial the Wall Street Journal said: "Eighteen new mining stocks appeared on the "curb" one day this week. The par value of the mining stocks authorized in the United States and Canada this year has been estimated as high as $900,000,000. Inasmuch as the vast majority of these mining propositions are mere prospects, at the best exploration schemes, the character of this speculation is disclosed. It would be remarkable indeed if 5 per cent. of these stocks should turn out paying investments. "A high-class mining engineer said three years ago to the writer: "There are just two classes of persons who are entitled to enter into mining enterprises: (1) The practical miner who makes mining his life business; and (2) The rich capitalist who can afford to take extraordinary risks. For everybody else, mining is a perilous gamble.'" Almost at the same time, Mr. Daniel Guggenheim, president of the American Smelting & Refining Company, made this remarkable statement: "Even where there are undoubtedly surface indications of ore values, it should be borne in mind that I in 300 is a conservative estimate of the proportion of prospects that eventually fulfill their promise. The two hundred and ninetynine failures are forgotten in the one success, and that one is made the bait with which the public is tempted to three hundred more ventures." It is as well to state categorically the reasons why the public, or at any rate that part of the public which has only small savings to invest, should not under any circumstances purchase mining stocks. These reasons follow: (1) Out of every hundred mining stocks that are advertised for sale, not more than five represent mines which are actually producing gold, silver, or copper; and out of these five, not more than one or two will ever produce enough to pay dividends on stocks or give any permanent value to those stocks. (2) The laws of the states in which 99 per cent. of these companies operate are not sufficiently strict against actual fraud, against the issue of stocks on alleged mines which do not exist at all. Hundreds of stocks are created every year, and sold as mining stocks, with no mining property behind them at all. (3) In ninety-nine cases out of a hundred, these stocks must be bought almost entirely on the "say-so" of promoters themselves interested in the stock, and without the chance of an actual personal investigation of the property represented. Even if such examination be possible, the non-expert can learn nothing whatever from the investigation of a mining claim, or even an open mine. (4) When mining stock booms occur, they are inevitably led by new stocks. The small stocks which you bought in the boom of 1900 were hardly heard of in the boom of 1906. The "popular" list of 1900 on the Colorado Springs Exchange is now showing prices from 50 per cent. to 99 per cent. lower than in 1900. (5) The whole business of promoting mining stocks is on a moral plane extremely low. The old adage that a Western mine is "a hole in the ground with a liar at the top" holds good in a remarkably large proportion of cases. (6) Emotion plays too large a part in the business of mining stocks. Enthusiasm, lust for gain, gullibility are the real bases of this trading. The sober common-sense of the intelligent business man has no part in such investment. (7) If you buy a prospect which turns out well, the chances are still against your ever enjoying the fruit of this success. In a large majority of cases, the people whose money first opened up the great successful mines of Montana, Arizona, Colorado, and Rossland were "shaken out" as soon as possible after the promoters of the mines discovered that the mines were really rich in copper, gold, or silver. You, as a small stockholder, cannot know whether the mine be successful except as the officers are willing to tell you. In three cases out of four they will not tell you of success until they have "gathered in" as much of the stocks as they can induce you to sell. (8) The information contained in the prosspectus of a mining company is generally all the information you will ever get. Out of a list of ten stocks largely advertised for sale in one New York daily paper in the boom of 1900, it is now impossible to find a trace of eight stocks. One of the others is listed as a "fake." The stock of the tenth is selling at two cents per share. It was sold to the public in 1900 at a dollar. These reasons are the result of a careful study of this business as carried on in Wall Street during the last five years. The first of them is said to be recognized by mining men as one of the cardinal truths of the business. It arises out of the very nature of the mining industry. Out of every five mines that start from the surface rich in gold, silver, or copper, four will disappear before ore in paying quantity is produced. At a recent mining conference in Colorado, Governor Pardee, of California, framed a law which should go on the statute books of every state. It makes it a felony to publish in a book, prospectus, notice, or report any statement false or wilfully exaggerated and tending to give a false value to properties or securities. Such a law is very badly needed. The honest leaders of the mining properties in Colorado and California endorsed the belief of Governor Pardee that the business of mining is debauched and degraded by the fraudulent practices of the unprincipled promoters, and endorsed this intended law. Until it is in existence, the mining business will continue to be permeated with fraud. The third reason is clear enough. As to the value of a non-expert examination of a mine, it is perhaps enough to point out that hundreds of millions of dollars of English money were tempted into Colorado mines not so many years ago by inviting examination. When the examining "experts" arrived, the mines were "salted" for their inspection with ore obtained from other mines. On their favorable reports their clients invested heavily. If even the most competent expert can be fooled so simply, of what value is the layman's examination? All that can be seen in the case of a "prospect" is the surface. The odds, as pointed out above, are at least four to one against even the real expert correctly reading the surface indications. A lesser danger, of the same character, is the matter of title. Only a month or so ago, the Guggenheims of New York, probably the most deeply experienced mining firm in the United States, took an option on a large amount of the stock of the Nipissing mines at $25 per share. They had sent their expert, Mr. John Hays Hammond, to that region to report, and on his report had taken this option and put up about $1,750,000 for the first installment of the price. A couple of weeks later, questions arose as to the title covering the property. The Guggenheims asked thirty days in which to investigate. The sellers refused. The New York firm thereupon sacrificed the $1,750,000, and refused to make a second payment. The stock of the Nipissing Company collapsed from $33 per share to $15 and lower. If the Guggenheims can be caught this way, what chance has the average outsider? On the fourth reason, the following list of stocks is taken from the New York Herald quotations of November, 1900, to show that the boom of 1906 has not brought back the faded fortunes of those who bought Colorado stocks in 1900. Similar lists can be obtained covering other markets for the same period: Elkton Pinnacle 1906 1900 190 53 58 05 20 336 ΙΟ 12 Portland N. Haven Acacia 42 C. C. & M. Isabella Golden Age Work Findley. 72 03 27 161 02 190 decline in the prices of copper-the metaland the latter to the swift rise in that price, coupled with wonderful new discoveries in the Anaconda mine. Even so, the result is the same. There is no real publicity in mining literature. Annual reports are extremely rare. Perhaps a dozen companies can be named, out of thousands, which give to the stockholders even a pretense at such reports. The alleged statements that have come from the Amalgamated Copper Company, the Anaconda, the Greene Consolidated, and others do not give to the 02 analyst enough information to form an intelligent opinion. Of its very nature, the minooing industry cannot be outlined in reports. The future is too intangible. The reports can barely outline the past and hope for the future. 02 09 24 22 794 the This list is partial, but it contains all of 1900 list for which ready comparison is obtainable. Some of the 1900 stocks have been "consolidated," some have disappeared from trading, others have dropped entirely out of sight. It may also be interesting to note that in the boom of 1900 Mr. Thomas W. Lawson, of Boston, gave the public a rare chance to buy Trinity Copper at $25 per share. It is now quoted around $11. The reason for this seems to be that when a mining boom springs up it is generally based upon discoveries of metal in some new region. The boom of 1906 follows the discovery of gold in Nevada and silver and cobalt at Cobalt, Ontario. The 1900 boom was probably started from the Rossland excitement, more than anything else. Le Roi stock, representing a gold mine in Rossland, sold at $50. People have since been glad to get a few cents for it. The seventh reason should be carefully borne in mind at all times. To illustrate it, the history of Amalgamated Copper since 1900 will do as well as anything. The wild enthusiasm of the subscription, the 8 per cent. dividends following that public participation, were in turn followed by a long period of decline which "shook out" the public stock at prices from $10 to $60 below the first subscription price. The "inside interests" bought huge amounts of the stock at low prices. Then came recovery, until at last the old 8 per cent. dividends were resumed, and the stock sold higher than ever before. Of course, the decline and the rally are to be ascribed to natural causes, the former to the This subject can hardly be dropped without a passing reference to the hundreds of "Dogs," "Queens," "Coins," "Crowns" and other peculiar things that are advertising themselves in the Sunday papers, the cheap magazines, the mining sheets, and by millions of circulars sent out on the odd chance" to the public. If they are copper prospects, they are free to confess themselves "another United Verde," or "another Calumet & Hecla." If gold or silver risks, they parade their chances of becoming another Tonopah, or, just now, another Nipissing. They tell you that their property is "on the same vein" with the United Verde, the Tonopah, or the Nipissing. Avoid them. In nine cases out of ten they are the merest prospects, gambles of the most insidious kind. If you are tempted to indulge in the luxury of fliers in these stocks, buy a copy of one of the Denver mining papers. Read it through as a matter of curiosity. Then turn back to the editorial page. In the November issue of the Financial Bulletin, of Denver, is a list of companies about which the editor is asked to make reports. The list contains 118 names. The letters that asked about these concerns were so many "agony calls," representing in many cases the tears of those who had "invested" their money in the stocks of the companies listed. Such letters come in thousands to the editor of every financial publication every year. From experience, we can say that in over 90 per cent of the replies concerning the stocks of small companies the anxious inquirer is told that the stock is "worthless," or that the company "cannot be found." |