Bulletin HASKINS & SELLS 11
S C A R C E L Y a day passes of late that the
newspapers do not contain one or more
advertisements offering securities to the
public. It is a time of flotation.
The necessity for funds grows out of
the conditions resulting from the war and
other minor causes. The offerings are
mostly those of corporations. They are
varied in assortment and embrace bonds,
notes, debentures and stocks.
The public absorbs the securities. Sometimes
this happens quickly. It always happens
ultimately; at one figure or another.
The rapidity of absorption depends upon
how attractive is the offering.
The public is becoming more and more
discriminating. It is learning to demand
more facts concerning the company whose
securities are offered.
The prospective investor has a right to
and should ask certain questions. " W i l l my
money be safe?" "How much will it pay
me?" "Will it continue at a satisfactory
rate?" "Can I get my money out, if I
want it, at any time?"
The establishment or verification of the
facts from which these questions may be
answered depends upon the public accountant.
Safety of principal is a matter which
the balance sheet will disclose. Yield is a
matter of earnings and distribution of
profits. Continuity of yield may be judged
largely from the experience of the past.
Marketability in turn depends largely upon
safety of principal and yield.
Information concerning the history of
the company, the plans for future administration
and management, opportunities in
a particular field, the appraisal of the
property and legality of the issue are all
matters of interest and have their place in
the announcement of an offer. The name
of a well-known firm of public accountants
on the offering is needed to make it convincing
and give it strength.
Offerings of Securities