How to Invest

Head of the great Manhattan Co., possessing a fortune of at least $50,000,000, perhaps more than $100,000,000, it was natural that the late Paul Moritz Warburg was skilled in the art of handling money. When last week his will was filed it was found to contain rigid rules. In these lay the foundation for his investment policy, but only the foundation. For no rules can tell when to buy or sell. Absolute discretion in that was given to his four executors (widow, daughter, son, brother).

The six ways in which Banker Warburg wished his funds invested were:

1) In any security legal for savings banks and trustees.

2) In New York City first mortgages. But no investment in one mortgage is to exceed 5% of the total estate.

3) In obligations of the U. S., of States and of cities of over 100,000 population provided the State or city has not defaulted for at least ten years before the investment. Investments in any single State or city bonds except New York State and New York City must be limited to 5% of the total.

4) In the obligations of foreign governments and cities with the provision that no single one of these investments will total more than 5% of the total estate and that the entire grouping shall not exceed 25%.

5) In bonds and preferred stocks of any U. S. or Canadian railroad that has paid full preferred dividends for the preceding ten years and that has also paid dividends of at least 4% on an amount of common stock equal to the amount of preferred stock then outstanding. Only 5% of the total estate may be invested in any one railroad and only 2 1/2% in any one type of that road's securities. However, the whole 5% may be invested in legal railroad mortgage bonds. The total investment in preferred railroad stocks is confined to 15% of the estate.

6) In any securities, including common stocks, of any sort of corporation not included in the above groupings provided they do not total more than 20% of the total estate at the time they are bought.

Except for $40,500 willed to 19 employes and servants, the entire estate was left to Mrs. Nina Loeb Warburg for her lifetime, then to be divided between her son and daughter. Son James Paul Warburg, 35, is vice chairman of Manhattan Co. (TIME, Feb. 15). Daughter Bettina Warburg, 32, practices medicine.

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