is happens
because he has violated the rule we have just stated; he has ventured
his savings in unfamiliar fields, ignorantly he has rushed in where the
better informed would have feared to tread. Such so-called investments
are in reality highly speculative. They involve risks which are unknown
and altogether to be avoided. Now no one speculates in his own
legitimate business, for there he is acquainted with the hazards which,
he has learned, require the best of knowledge and the greatest of
prudence. It is the allurement of the unknown that tempts him to seek
unearned profits through speculation in outside regions where, in the
nature of the case, the chances must be against him. Now speculation
has its proper place in business: there are certain inherent hazards
that must be undertaken, mainly to be found in the risk of the seasons
in the production of crops, and the risk of the future in undeveloped
enterprise. These risks must be carried by somebody, but clearly they
constitute an activity for specialists who study conditions, becoming
relatively expert in determining how and when to act. These specialists
are drawn principally from two classes: First, the professional
speculator, who knows his markets and makes a business of buying and
selling future risks; such men perform a great service in handling our
seasonal crops and in other directions, and are entitled to a
reasonable profit. Second, the man of wealth who may use part of his
surplus in the risks of undeveloped enterprise; although it is probable
that in the end his losses and expenses will outweigh his gains, he can
afford to take chances of such experiments in the hope that success
will follow in some of them; furthermore, he can regard the outlay as a
contribution to the advancement of mankind. For the rest of us,
however, outside of these two classes, it is our business to keep away
from speculation whether in oil wells, flying machines, in new
factories, or in real estate: in the long run, we cannot get something
for nothing and money-making efforts that are ethically valid thus
coincide with those that are selfishly desirable, namely, the efforts
to obtain the payment, the profit, that arises from a valuable service
performed or commodity produced. Too often men who follow this rule in
their regular occupation depart from it in the use of their saved
surplus funds. They feel that their savings ought to make them money,
as they say.

Now savings can b