astrous loss. If, however, he purchases a Call or a Put as the case may be, on a block of stock, he knows that he can rest assured that if he is wrong his greatest possible loss, as before pointed out, is absolutely limited to the amount which he has paid for his option, while if he is right, his profits, less the price paid for his option, will be the same as if he had taken a firm position in the market.

The foregoing are probably the chief advantages which recommend the purchase of options, and the more that people over here in recent years have become educated and accustomed to dealing in them, the more it is generally acknowledged that the arguments in their favor are sound and that by means of their use a very much safer way is found to speculate in the market.

PUTS AND CALLS1

THIRTY-SIX-YEAR-OLD “CALL" BY JAY GOULD-WALL STREET MEMORIES REVIVED

"Put" Sold by Daniel Drew in 1874 Also Unearthed, Recalling Early Trading Days

Reminiscences of Wall Street's "good old days" were revived yesterday with the unearthing of two "privileges," one sold by Jay Gould and the other by Daniel Drew. The New York American was handed these interesting documents for reproduction.

The privilege sold by Jay Gould was a "call" on 200 shares of Western Union Telegraph Company stock at 74. It was dated February 21, 1876, and expired at 1:45 P.M. March 22. Last night Western Union closed at 831.

The other privilege was a "put" sold by Daniel Drew on 100 shares of Chicago & Northwestern stock at 401. It was dated November 18, 1874, and expired in sixty days, which was January 17, 1875. The same stock was traded in at 144 yesterday, a rise of more than 100 points.

Puts and calls often play a prominent part in campaigns in stocks.

1 From New York American, April 5, 1912.

Russell Sage made millions out of the sale of these privileges. It is the general belief in Wall Street that Jay Gould carried on his campaigns in the Gould shares without the use of puts and calls, but the call on Western Union shows that he sold them at times.

One of the oldest market operators in the Street, upon being shown the privileges here photographed, said:

"Mr. Gould very rarely did anything in puts and calls except as part of a campaign in the stock market. When he was conducting his campaign in Union Pacific he sold probably the largest number of puts that were ever sold on any stock in Wall Street. He did this to encourage trading in the shares, and at one time the number of puts he had outstanding was estimated to equal the total amount of the capital stock of the company.

"During his campaign in Union Pacific he sold so many puts that the number of people trading in the issue increased materially. These puts insured possible buyers of Union Pacific against heavy losses, and because of this resulted in the greatest market Union Pacific ever had. It also caused a very big rise in the price of the stock."

Jay Gould at one time bought Union Pacific as low as 14 cents on the dollar. The Union Pacific puts were issued after Gould had consolidated the road with others and began the boom in its securities, which increased his wealth by many millions.

The call on Western Union is believed to have been issued shortly after Gould acquired that company and was making a market for its securities. The amount of privileges sold by Gould on Western Union

is said to have been very small compared with the volume put out on Union Pacific.

The put issued by Daniel Drew on Chicago & Northwestern is believed to have been sold by him at the time he received a bad "squeezing" in the stock. The actual signature of Drew also caused the followers of the tape to remember him as an example of how a man can succeed with practically no education. Drew was considered one of the shrewdest stock market operators in Wall Street, and at one time was estimated to be worth about $13,000,000. He was known as "Uncle Daniel," and made most of his money out of his manipulation of Erie stock.

Just about the time Jay Gould began climbing the ladder of fame Daniel Drew began descending, and kept going down until he died ruined and broken hearted.

Russell Sage was the largest seller of puts and calls that Wall Street has ever known. He made his fortune out of these privileges, and since his death no one has taken his place.

Conditions existing in Wall Street when Jay Gould and Daniel Drew were breaking stock markets are fully described in Henry Clews's book, "Fifty Years in Wall Street."

LEGAL INVESTMENTS FOR TRUSTEES 1

A trustee or other person holding trust funds for investment may invest the same in the same kind of securities as those in which savings banks of this State are by law authorized to invest the money deposited therein, and the income derived therefrom, and in bonds and mortgages on unencumbered real property in this State worth fifty per centum more than the amount loaned thereon. A trustee or other person holding trust funds may require such personal bonds or guaranties of payment to accompany investments as may seem prudent, and all premiums paid on such guaranties may be charged to or paid out of income, providing that such charge or payment be not more than at the rate of one-half of one per centum per annum on the par value of such investments. But no trustee shall purchase securities hereunder from himself.

Investment of Trust Funds.2-All investments of money received by any such corporation, and by any trust company chartered by special act, prior to May 18, 1892, as executor, administrator, guardian, personal or testamentary trustee, receiver, committee or depositary, shall be absolutely liable, unless the investments are such as are proper when made by an individual acting as trustee, executor, administrator, guardian, receiver, committee, depositary, or such as are permitted in and by the instrument or words creating or defining the trust.

Interest. On all sums of money not less than one hundred dollars, which shall be collected and received by a trust company acting as executor, administrator, guardian, trustee, receiver or committee under the appointment of any court or officer, or in any fiduciary capacity under such appointment, or as a depositary of moneys paid into court, interest shall be allowed by such trust company at not less than the rate of two per centum per annum until the moneys so received shall be duly expended or distributed. If such interest moneys, or any part thereof, shall not annually be expended or distributed pursuant to the terms or provisions of the trust under which such moneys are held, the amount thereof not so expended or distributed shall be accumulated by such trust company for the benefit of the parties interested in such trust fund, and shall be added to the principal to constitute a new principal upon which interest shall thereafter be computed.

1 From the New York Personal Property Law, Section 21.

2 From the New York Banking Law of 1914.

SAVINGS BANKS 1

Since all trustees may invest in securities which are legal for savings banks, it is necessary to set forth the provisions of the new banking law relating to investment by such banks.

Investments of Deposits and Guaranty Funds and Restrictions Thereon. A savings bank may invest the moneys deposited therein, the sums credited to the guaranty fund thereof and the income derived therefrom, subject to the following restrictions:

1. The stocks or bonds or interest-bearing notes or obligations of the United States, or those for which the faith of the United States is pledged to provide for the payment of the interest and principal, including the bonds of the District of Columbia.

2. The stocks or bonds or interest-bearing obligations of this state, issued pursuant to the authority of any law of the state.

3. The stocks, bonds or interest-bearing obligations of any state of the United States, upon which there is no default and upon which there has been no default for more than ninety days; provided that within ten years immediately preceding the investment such state has not been in default for more than ninety days in the payment of any part of principal or interest of any debt duly authorized by the legislature of such state to be contracted by such state since the first day of January, eighteen hundred and seventy-eight.

4. The stocks, bonds, interest-bearing obligations, or revenue notes sold at a discount, of any city, county, town, village, school district, union free school district or poor district in this state, provided that they were issued pursuant to law and that the faith and credit of the municipality or district that issued them are pledged for their payment.

5. The stocks or bonds of any incorporated city situated in one of the states of the United States which was admitted to statehood prior to January first, eighteen hundred and ninety-six, and which since January first, eighteen hundred and sixty-one, has not repudiated or defaulted in the payment of any part of the principal or interest of any debt authorized by the legislature of any such state. to be contracted, provided said city has a population, as shown by the federal census next preceding said investment, of not less than forty-five thousand inhabitants, and was incorporated as a city at least twenty-five years prior to the making of said investment, and has not, since January first, eighteen hundred seventy-eight, defaulted for more than ninety days in the payment of any part either of principal or interest, of any bond, note or other evidence of indebtedness,

1 Quoted from New York Banking Law by Frank C. McKinney in his Legal Investments for Trust Funds.