Review;

              A REVIEW
EDITOR'S NOTE: The following is a condensation of an interesting
and informative two-part article, "Investment in Stocks and Shares,"
written by Mr. G.L.C. Touche for The Accountant, issues of
September 22 and 29, 1956, published in London, England. Mr.
Touche is senior partner in the firm of George A. Touche & Co.
* * *
INVESTMENT has its own universal tongue, but rarely is it as articu-late
or as readily comprehended as in the account presented by
our esteemed colleague, Mr G. L. C. Touche, for the British pub-lication
The Accountant.
In this remarkably incisive two-part article Mr. Touche points
out that it is impossible to divorce politics from the business of
investment today. Political risks, he believes, have replaced trade
risks as the determining factors in investing. He covers the broad
scope of investment facets discussing in turn the selection of
securities and sources of investment information; and he even
delves into the psychological foibles of placing money for gain.
Mr. Touche reveals his skill at diagnosing the ills of investment,
citing the pitfalls which, if avoided, can assure a healthier climate
for investments. For the accountant who is called upon to inform
clients on investments, he offers a thirteen-point guide list.
Although war is singled out by Mr. Touche as the number one
political risk, he also cites government action which can change
the entire economic picture of a country. In this latter classification
he enumerates nationalization, denationalization, and threatened
renationalization of industries; control of internal trade; control of
external trade; and the persecution of capital. Commercial risks
and market risks come in for a review by Mr. Touche.
Expressing definitive ideas on currency risks, Mr. Touche says
that "as intelligent investors, and particularly as accountants, we
should not be content with the profits on the books. . . . The steady
decline in the value of nearly all currencies is a major characteristic
of the age in which we live, and its bearing on investment policy
is profound."
Inflation he charges to "political ineptitude" saying that it is the
"automatic corrective of monetary mismanagement, and comes
from failure to resort to more positive cures. The financial mess
arises from excessive expenditure on unproductive projects, of
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