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Business

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Parent Issue
Day
13
Month
January
Year
1881
Copyright
Public Domain
OCR Text

Lust year an oíd colored woman in San Francisco, who rnakes lier living a.s a ladies' hair-dresser, and had out of her earnings sa ved severa! thousand dollars, came to some of her patroneases for advice about the investnient of lier littl(j fortune. Her bavings had been luid by in small sums from time totime, and were deposited in a savings-bank, whi(-h had been paying from nine toseven per cent. inli](!sf, and as reputed absolutely .sound. Öéing conducted on the mutual benefit plan, every depositor was ;i stork-holder, and receivcd his or her share ol' the earnings, the rate of interest varying with t!ie prospenty ot the concern, fust then, owing tu a period of commercial depressioii and politica] disturbance, the Imsiïiess of tlie bank was so atfeeted that the directora at tlieir half-yearly meeting redaced the dividend to tbe rat e of six per cent. This tact, coupled vyjth the warning croakings oï sevei-al frienda who had lost their savinga in "stucks," and had jid Uuik-liooks, inucli upsetthemind of old Deborah, an,d shc di'tcnniiied to witlidraw a portiou 6Í her mouey, and hivcst it in mime, other Hccinity, for, as she slirewdly remarked, siie. "(üd net wish to havo all her egga in the sanie ha.sket." The councillors in whom she had molt faith u iscd her tobuy United States bohds, urging as reasons that they were the least tnmlesoiïie investnient for a lone woman to hold, not beiag taxable; that the interest conld be drawn regularly ev.ery thre montas ju the simpleat utanner; tbat altliough tho return was símil, it was sure; anti that if she deaired ut any time to j)ut her nioiiey into cash again, United States bonds were more readily cnnverted 'than any otlier prterty she could own. I)í.'l)orih apparently understood the advantages of such a puichase, and cided to withdraw half of her money i'roni the bank, and buy some four per cents., cedeemable in 1907. The father of one óf her advisers bought föt her two $1060 bonds. They were dulj delivered; the purpose of' the coupons and their niitniier oi' redeiiiptioii were explained;ahe was shown which one to cuiofftodraw the (juarterly interest due in a few weeks, and departed, to all appeanuices satislicd wtth her linancial operation. Subséquènt questiöriinjis of, -Well, J)eborali, how are the bonds? Have you cashed any coupons?" only elicited the response that they were safely stowed away wliere no thief ceuld ünd them, and that she did Dot wish her coupons turnedintomoney. ■'J'hev vvoiüd beapodany time., wouliin't theyV" Sonic eight montlis aiter the purchase Deborah oame to the lady throHgh whose assistance she had become a Imndhcildcr, and said, "They teil me uiy Imnds are wortli inore than I paid; i's thattrue" Yus, yon eould sell them for more tliaiiyou gave; but doyou want k? 1 thought you wisfaeda safe Jnvestinenl, to pay yon a sure ineome." "Sof did - so I did; but, Miss Lily, the lionds don't pay a dividend. Wliy, when all the coupons are ent off, what'll I have left ? Xot a penny. Ho tlie gpvernment can keep the mony vet awhile." Here"Vas evidently an erroneous hnpression of tlie government's part in the transaction, which required to t e set rigiit; to the astonishment of tlie expounder of the simplest of financia! principies, Deborah unfokled the state of her mimi in the matter of bonds, and the depth of her faith in the solveney of the governnient. lier friends in her own imiublephere had told her that in buyimg the bonds she had lont the government that amount of money, with wlioin, of course, it was pertectly safe; that tlie coupons authorized her every three months to draw that proportioa oí her principal, and that when they were all cashed, having received back ininstallmentsthesuinloaned, she would have nothing inore duc her. In other words, she looked lipdn the government as a voluminous okl stocking, in vvhose capacious depths It was emhiently wise for unprotected wonien to dcposit their earnings, and receive them lack in allotted sums. When the truth linally broke in on the old woman, and she understood that she could every tliree months draw $20, and still at anv time get back tke f2000 which she had parted vvith for those two big pieces of paper, her delight was great. and her good opinión of the business capticity and knowledge of her instructress iii United States bond values Lncreased immensely. Uut her naive ignorance became the subject of mtich philosophical criticiuin and amusement ainone her more educated friends, and thev wondered ■liovv any one couldhavesueh funny ándfoolish ideas aboutmónèy mattere." Fosaibly tlieir amazéinent lias ceased, and their jestB over tlieir oíd gervitor's nnsophistieated views of the nature oí bonds nul coupons been quenched in the light of a subsequent instáiice of ast on nd ing business credullty displayed by educated white women in the most enlightened State ia the -wilhiii the very "Hnb" itself. Probably no failure.theresuït oí financia) chicanery, has ever happened which should so amuse irotnen interested in the tnie' education of tlieir sex as the late disgracefulcollapse of the "Ladies' Deposit ('onipany" in Boston. Other swindles have oceurred, more infcricate in' their inceptíoo and bronder in their action, aud the eonsequences of which have been more disaetrous and wide-spread, but the circmnstaneew of the case now liefore us were go unnsual thal it deiimndseonsideiation. The very BUOOesa of the barefaced plot depended on the ealculated btteinets ignorance of aclass of women of average intelligenee, and certainly more than grammar-school education, whose pecuniai7 condition made them feel witli peculiar keenness the inevitable resulta of tlieir blind greed. A woinan named Howe, of whoae past life and training nothing was known, and les asked, ojiened a savingx-bank, which she called the "Ladies' Deposit Cornpany." Onlv women were eligible as depositors. and only working-woinen (working in the sense of being Belf-tíependent: Mis. Howe and her baokers had wit eoough to dread the inquisitorial mvestigations of nnen) were invited to intrust their hard-earned surplus to her fidiiciary uianipiüation. Xo deposit over $1000 wa rcivd, and all ïnoney was takeii "on cali." This thin veil haring been thrown over" the eyes of her expected Aaictims, she oiïei-ed the extvaordinay habit of eight per cent, a month, or ninety-six percent, ayéaj1, threemonths' interest, or twenty-four per cent., being paid in advance at the time an account was oponed. In otber words, out of everyllOOdepoBitedtheiHtbecile depositor was handed back 24, as an encQuraging earnest of what the future held in store Eor her. A certain puition of the later ileposils were kept to pay the interest aceruing on tlie earlier mes, as 1 1 meeting these obiigations suspicion Waa aïlayed, and Mrs. Howe c)iiUl áppropriáte and enjoy her share of the gains umnolested. Of eouise any woman who gravely hands over her money to a savings bank offering such interest will not allow het eyes to lic opened l ihe fata] nature of her Lnvestment until such niarvellou productiveness ceases: only the hard logic af facis eau tiicn teach a knowledge of the principies oí ordinanry flnance. In (lue timé the crash carne, aecusations, explanations, reeriminations, wen; indulged in, liut nothing ïemained save a cruel sense of having been inveigled into Landing one's puree to a pickpocket to take oare ol' in a crowd. Hul is mi lrsson to lx; learned from the expósüre of the flimsily eonstrttcted wébwhich How8& Co. sprfeadfor the inanariiig of these human fliesï Thepóssibility of a prolïer of tiinaty-six per cent. profit lieing eagerly aceepted by tlmnsaiiils öf vromen of the tnkUfle clas's sccinsto lui-o wIki arrainge system of education, and, Iikethe handwriting on the s all in I ln days of the extravagant. heedless Kuig ol Babyloti, ahould strike tothevery heartof a nation whleh bo loudly boasts of its universal intellïgence. "ïhou art weighedin the batanee, and found wannjüg." Where is the flsw? Is it in what we teach, oï vrhat we ïail to teach? in our matter, or our method? Probably most of our Boston depositors - certatnly the teachers amongst thein - had passed through the High and Normal schools, liad studied "i'ractions," "percentage," "in terest," "bankinfí," and soine of th( higher mathematica, and yet so utter was tlieir lack of comprehension rf the piactical lieiiringof nuniliers, of the relatioii of cajiital to interest, of the nature of botli, and their ])ossiljle legitímate mutual proportions under the ordinary cohdiliöns of business lift, that they believed that a financia! genius oi their ownsex -butof whose education and capacity they were generously uninquisitíve could reverse all the laws of trade, and cajole their capital into yielding ten times the inorase vvhicli ainidst the close and bitter competition oí' modero mercantile lile satisfles many a gray-haired veteran -'on 'change." The vastness of the ignoraneeof thetirst principies of politieal errmomy which is betrayed by tliis incident is atartling, and compela tlie attent ion of thinking woinen. Xo doubt boys grow up with quite as obscure ideas on questioiw of linanci', but the practical careeré whicli the wnjority are foïoed Luto st an earlv age soon supply theni with a necessarv stock of business maxiins fonnded on e-xperiance, and prevent them, :us a rule, Erom being swindled with their eyas open. In settled eoiniiiiiiiities it is an aeccptcd axiotn ttiat a higli rateof interest supposes an inereased risk, and whensuch is offered it is wal] understood tliat the in ves tm ent promising it partakes of the nature of a speculation, or a monopoly, and is therèfore undesirable for men and women who eau not u ell atford to lose what tliey put in. The speculation in ïniidng stocks which has extended to all parta of the country, and parttcülarly the unprecedented yield oí fche Bonanza in the Comstock Lode, have accustoiiied peo pie to hear of large returns on capital, without any ïcalization of the souree whence they were drawn. Knowing that hnge dividends have been, and to soine extent still art-, paid by certain Pacific coaat mines, unthinking and undiscriininativc iniiuls fuiled to be startledtoy au equally alluring prospect of imïnense interest from a sáving-bank, organized spocially to accomodate a class of the comtnunity who are not usuallv over considerad and cared for hy thé business world, Of ■oui-.se t lic least rertection' expended on the orígin of the dividcnds of ricli stocks would rci-;i] a tintura! acciimulation or reselS voir of hil lierto uutouched gold and silver, wbicli a roinparativelv moderate expende transforras into oew twentydollar pieces, and the rational expectatiou of the supplv beingstiU unexliausted, the stock will rotain a liigli quotation - :i quoted alm-, Itawevër, which rapidly and disastrously decreasea as soon as the dcj)ositsarcsu].)oscil to approach an end. The same analytical sèrutiny ap'plied to the modus operandi by wïuch Eowe & Co. proposed to pay a depositer 96 a year on every$100feceivedwouíd have proved the dishonèsf fallacy of tlio schciiic, and Baved inaiiy bliglitml hopes, and fuituiifs whose valué was in Inverse ratio, probablv, to tlirir size. It is hardly to be supposed that tl:c w men who flocked to the "Öegosfl Óompany" ilid mit know that their tnpney, to bear au increase, must lus leut to ofhers for use, and any thoügllt on their part would have led Uiem to ímmedlate distrust oí' the bonanza promised.

Article

Subjects
Old News
Ann Arbor Democrat