Page:Hints About Investments (1926).pdf/261

 likely to be set forth at understated values; when directors are of the other kind the values will be overstated; they could only be right by a miracle, because nobody knows what the real figure is, and even the appraisement of an expert valuer is only a guess.

We have seen also that in all securities there is an element of risk. The example of Germany and Prussia has shown us that the obligations even of a populous, wealthy country, humming with prosperous industry, may be made worthless by bad politics and worse finance; while all industrial securities depend on the successful management of an enterprise that may be hit or even ruined by a new discovery or a change in the consuming habits of the community. Railways, that looked so solid an investment to our Victorian ancestors, made the roads of England into lines of desert; and now the roads are busy winning back traffic from the railways; and Mr. H. G. Wells, a prophet with a large number of bull's eyes to his credit, has ventured to predict that the latter may be scrapped, and "probably will be scrapped within another half century, as slow and wasteful."