Small Saver is Social Saviour

NZ Truth, Issue 1017, 23 May 1925, Page 5

Small Saver is Social Saviour

"Spread Your Capital"

Popular Participation m Profits of Industrial Companies

Savings of People Would Soon Work a Mighty Change if their Investment Could be Guided

What the small farmsr is to the agrarian problem, the small shareholder might be to the general economic-social probI . . . ... An enlightened self-interest should lead the large capitalist to encourage the small, and to facilitate the spreading of the capital risks (and gains) of industry over a numerous body of investors instead of confining them to a favoured few. Anything that would help the owner of small savings when he makes his first uncertain steps along the pathway of investi ment would be a public as well as a private beneficence.

A man who has something to sell, writes Sir Leo Chiozza Money, is rarely ingenuous. To discover that fact did not need a statistician of Sir Leo's capacity; but he is useful m that he presents staggering figures of the amount of popular savings lost m the Old Country, because the ingenuous man of small means listened to the disingenuous salesman. In Australia and New Zealand • m these latter days, salesmanship pushes its plans far afield, into the remote baekbloeks. . Rural Australia is overflowing iwith wool and wheat money, and the seller of wild-cat shares, as well as the seller of almost everything else, is said to be busy m, the backblocks. • So much s,o that it is recorded that the Sydney Stock Exchange is advertising m the country districts of New South Wales, to tell the small investor of the countryside that, if he has money for shares, he is far safer m investing it after (not before) he has been advised 'by a member of the Exchange. Such advice is offered free of charge and as a check upon the representations of itinerant share-push-ers of unknown repute and responsibility. v . v Gullibility. There is no doubt, that the man m the country has had some very wildcattish propositions pushed on to him. In the -same way, he has .'been had by hawkers of all classes, m respect of all sorts of commodities, from an encyclopaedia to a potato-peeler. And that kind of misfortune he does not enjoy "on his own." City and suburban dwellers, even if they live alongside main street department stores, are just as likely to be taken down by door-to-door hawkers as is the coun-trv-sider. The mainspring of fraud is not rural environment; it is the common gullibility of human nature. The fact that there is less inducement to give value on the part of an itinerant stranger, than on the part of an established business, does not prevent the householder from being gulled So long as the merchant and the shopkeeper are not themselves infallible, people will find excuse for buying from irresponsibles; and not until the Stock Exchange sharebroker becomes a plaster saint (which sometimes'he isn't) will there be any possible end to the sort of peripatetic salesmanship that loads duffers on to credulous buyers. A ' V 1 ' v • All the same, any attempt to bring share-selling compaigners within the orbit of reputable authority is to be. valued. "A man who has something to sell is 'rarely, ingenuous;" but there is a better chance of fair dealing when reputation and responsibility enter into the transaction or into the advice on which the transaction is based. Most people have some chance of defending themselves against vendors of potato-peelers; .but they are more or less- helpless, m the hands of the shrewd and persuasive . share-seller, because % high finance— or- even y average finance— is Greek to them. Not even the bookmaker holds a heavier advantage than the vendor of; bad scripJ Not even the owner of the double-headed penny is deadlier. ; Social Value of Small Man. A*nd there are economic- social reasons why the small , savings of small people, seeking to enter the sharemarket, should not.be subverted. The spreading of ownership is one of the secrets of social contentment. The •doctrine of small ownership of rural, land has become a truism. But, under the modern company system, it would' be much easier to spread ownership through shares, and the prin-, ciple of share- owning is applicable to all forms of wealth and of production. Already this convenient form ■of wealth -distribution (which is powerdistribution) is reaching the multir

tude. All over the -world are examples of great businesses that recently belonged to a few 'big men, but now are shared 'among thousands — m some cases, { hundreds of thousands — of small men. The movement towards ownership of industries by the people, as shareholders, is one of the most significant of the Twentieth Century. Occasionally it. happens, that, almost before a man has ceased proclaiming that he is a communist, he finds himself a capitalist. If the tide of small investments 'could be guided, it would become an ocean that would- submerge the snags of social hate, and on which the ship of State could sail secure. Where capitalists are few, they carry — m every sense — a big risk. Surely their policy is to spread the risk. And the thing is ..happening, whether they will it or not. One great aid to the new capitalisation would be the inculcating of investment ideas as against financial garrotting. Every stock exchange renders lip-service to that principle. And a stock exchange that lives up to it is not impossible. Enlightened Self-interest. At this stage someone may interject: "If the man who has something to sell is rai-'ely ingenuous, how can you hope thafprlnciple (not principal) will rule?" The point is not the occurring of some miraculous enthronement of principle, but the employing of a system that, "because of enlightened selfinterest, is less likely to be dishonest. Enlightened self-interest is already telling the large capitalist that he needs the small capitalist. Equally; the small . capitalist needs the large capitalist; and the multiplication of the former points a way to stability. Reciprocity may not be selfless, but it is not a bad foundation to 'build on. Too many of our reform notions, says Henry Ford, "make the assumption of honesty araon?' mankind, to begin .with; and that, if course, is a prime defect. Even' our present sys-. tern would work splendidly if all men were honest. As a matter of fact; the whole money question is 95 per cent, human nature; and your successful , system must check human nature, not depend upon it.'