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This paper develops a geometrical model for the analysis of the collective decision process known as general fund financing. The model is used to compare the outcomes produced under general fund financing and simple majority voting and to explore the comparative statics properties of general fund financing. The major conclusion is that general fund financing often produces unpredictable and paradoxical outcomes. For example, a change in the preferences of voters which would lead to increased outputs of each of two public goods under simple majority voting can produce reduced outputs of both public goods under general fund financing.

A number of schemes have recently been proposed all of which wish to channel funds into industry. One such scheme was Mr. Jack Jones's plan to form a £2 billion companies' investment fund, which, in liaison with the National Enterprise Board would channel funds into new investment. The scheme which, unfortunately, has not been published in detail has already been attacked by both Government and Opposition on the grounds that public bodies are not competent to make investment decisions, and a plan of this nature would necessitate major changes in the financing pattern of industry.

(1970). Mutual Fund Performance and Cash Inflows. Applied Economics: Vol. 2, No. 2, pp. 141-145.

(1972). Measurement and Forecasting of Mutual Fund Performance: Choosing an Investment Strategy. Financial Analysts Journal: Vol. 28, No. 6, pp. 78-84.

How effective are marketing concepts and tools when applied to a nonbusiness enterprise? The authors sought to determine the answer to this question through the application of marketing techniques to a charitable fund drive. They found that careful marketing analysis and planning produced the first net increase in donations the fund had experienced in twelve years.

A THEORY of human capital is in the process of formulation. The primary question is "What is the contribution of changes in the quality of people to economic growth?" The academic economists first raised the question after their research showed that production in developed economies had been increasing much faster than could be explained by inputs of physical capital and additions to the labor force. But the wide interest which the question has aroused indicates much more than academic curiosity. It reflects the desires and aspirations of people throughout the world-people anxious to add weight to their demands for action against disease and illiteracy by showing that such action is not only humanitarian, but will make a major contribution to economic growth as well. Though research on the return to investment in people is barely getting started, even the most tentative conclusions have been widely quoted. Preliminary indications that the rate of return on investment in people is high have been seized upon in a growing number of countries as justification for in

This paper attempts to set out some of the points of detail in the administration of a privately administered pension fund based on the practical experience of a large fund. The solutions offered to the problems arising have necessarily been reached in the context of a particular fund and do not claim to be the only, or even the best, answers for other funds; indeed the very problems may be different in other funds, particularly in smaller ones.It seems essential, therefore, to describe the main features of the fund in question.

(1962). Growth of the Mutual Fund Industry. Financial Analysts Journal: Vol. 18, No. 1, pp. 31-38.

IF ANYONE here needs reassurance from the title, let it be said immediately that the economist will never be a substitute for the analyst. He can be a complement to the analyst, although he has not really aided the analyst to date. Let's be blunt: the investment community to date has not received full value from economics. The blame for this lack of use lies solely with economists because they are centered in a GNP world which by itself has virtually no relationship to investment decisions. To ma.intain their union standing, economists must always make forecasts. The author offers the following forecast: If the decade of the sixties was characterized by investment analysis based on stories and company visits, to the same extent the decade of the seventies will see analysis based on statistical techniques and economic models. To support this forecast, the reader is offered a leading indicator: The younger analysts who are developing most rapidly are predominantly economics and statistics oriented. The author's criterion for measuring the contribution of economics to investment analysis is very simple. Are portfolio decisions based in part upon economic inputs better than portfolio decisions without such inputs? He is convinced that they are and that analysts and money managers are reaching for the tool of economic analysis because they see it can pay off. However, his view is that most research departments should not have an economist, at least not one with purely academic credentials. In other words, if the economist in an investment management organization cannot relate to investment policy-and contribute to it-he should be fired. Every research department and money management operation should, however, have an economic analyst. The author believes strongly that the economics work described in this paper should be assigned to one analyst, call him economist or not, who will be responsible for this type of investment analysis. Even a small shop will profit by allocating part of one person's time to this type of analysis. The subject then is how economic analysis can contribute to the investment decisions of a research department or a money management operation. An analyst or a portfolio manager needs to make assessments at three levels: (1) future developments in every financial market, including the stock market, where investment alternatives are possible; (2) the outlook for particular industries; and (3) the opportunities in individual securities. Economic analysis can contribute at each of these three levels.

IN THE spring of I943, sometime after the appointment of a new superintendent of banks, all the I25 savings banks in New York State not then insured with the Federal Deposit Insurance Corporation applied for such insurance. Previously, 9 others had either joined or had made application, and active discussion had occurred of the relative merits of the federal and the state plans. The latter plan had been set up in I934, when all but 2 of the New York savings banks which had joined the temporary system of federal deposit insurance had withdrawn therefrom. All but 3 of the I36 savings banks in existence in the state at that time had set up a Mutual Savings Banks Fund, of which the Savings Banks Trust Company (organized in I933 largely to hold their reserve balances and to lend to or purchase securities from them) had been named trustee. When F.D.I.C. membership was again considered by the New York savings banks in the winter of I942-43, it was first proposed not to abandon the Fund but to continue it as a "repair fund" for special purposes, such as taking care of possible deficiency in savings banks capital funds, although no further assessments were to be levied by it. But, after active discussion, the banks decided on September IO, I943, to liquidate the Fund. The savings banks plan had certain unique features which have been but little publicized. Underlying them was a conception of, and approach to, deposit insurance and a theory of the way in which it should operate that differed markedly from the current practice of the F.D.I.C. The plan thus affords an interesting chapter in the theory as well as in the history of banking. Deposit insurance as practiced by the F.D.I.C. embraces insurance and the supervision of risks incident thereto. It further implies broad diversification of risks and combines risks of different classes of banks in a single system. The Fund, however, was part of a plan for mutual self-help by a compact, homogeneous, and closely knit group of institutions. It was created, owned, and controlled by its participants and sought to round out a group of services rendered to them. Together, the Savings Banks Trust Company, the Institutional Securities Corporation (a mortgage bank which was set up in I933), and the Fund provided an organization to effect complete servicing of the needs of the New York mutual savings banks. They regarded the problems of the mutual savings bank as unique and sought through contact with their members to provide a coordinated or integrated mechanism to deal comprehensively and sympathetically with its problems. The three institutions worked with the superintendent of banks, who provided the formal supervision of the banks needed to reinforce the self-interest of the members in securing adequate management of the individual institution. As an insurance plan, the Fund sought to protect depositors by spreading over the entire system the losses which would otherwise be borne by depositors in particular banks. It provided a mechanism for redistributing losses incurred in banking operations. But deposit insurance, it has frequently been observed, although infrequently realized by bank depositors as a whole, implies more than mere insurance of deposits. In fact, the ramifications exceed in importance the objective just stated. I This article is based largely on unpublished material examined in connection with a report on deposit insurance prepared by the writer in I942-43 for a subcommittee of the Savings Banks Association of the State of New York. He is especially indebted to Dr. Irvin Bussing, economist of the Savings Banks Trust Company, for information as to the operations of the Fund.

(1968). Investment Goals: A Key to Measuring Performance of Pension Funds. Financial Analysts Journal: Vol. 24, No. 2, pp. 133-137.

EDITOR'S NOTE: The Financial Analysts Journal is proud to publish this presentation by Mr. James Balog, Vice President of Auerbach, Pollak & Richardson, Inc., and Mr. Donald P. Moriarty, Partner of William A. M. Burden & Co. It was given at the May 1967 Annual Conference of The Financial Analysts Federation in San Francisco. The text had been copyrighted by the authors and reserved for publication in the Journal. The Board of Editors extends to them its deep appreciation of their generous gesture.

(2) During the hearings preceding the passing of the Federal Securities Act, estimates were submitted that out of a total of some 50 billions of security flotations, as many as 25 billions either were fraudulent from the start or had since become worthless. The Federal Securities Act made good the Democratic campaign promise of legislation designed to safeguard the national savings from falling into the hands of fraudulent or ignorant promoters and security salesmen. The severity of the liability provisions of the act leaves nothing to be desired, but already the question is raised whether the new "caveat vendor" doctrine does not paralyze the initiative of the investment banker to such an extent as to

THE PURPOSE of this study is to measure the investment performance of French mutual funds, as examples of internationally-diversified portfolios. French mutual funds or SICAV differ from mutual funds in the United States in two important respects.' First, the great majority of SICAV hold both domestic and foreign securities, with the largest foreign positions in stocks and bonds listed on the New York Stock Exchange. Second, most SICAV have been established, marketed and managed by French banks, which may have both investment banking and commercial lending operations, a practice forbidden in the U.S. under the Glass-Steagall Banking Act of 1933.2 Relative to other investors in that domestic environment, many French banks enjoy substantial advantages in financial-analysis resources and access to current information on French firms. Measurement of the investment performance of the Frenchsecurities portion of these portfolios constitutes a "strong-form" test of capital market efficiency in France.3 The potential advantages of international diversification in common stock portfolios have received considerable attention in the mean-variance framework of Markowitz and Tobin.4 Papers by Grubel and by Levy and Sarnat demonstrated that efficient internationally-diversified portfolios, constructed from ex post returns and standard deviations of return on market indices, generally dominate the results for single nation market portfolios.5 In the

(1967). What’s Happening to Mutual Fund Management Companies? Financial Analysts Journal: Vol. 23, No. 5, pp. 75-82.

D URING THE 1942-1946 BULL MARKET, a security analyst for a New York brokerage firm who acted in a part-time capacity as an oil industry field expert for a mutual investment fund, submitted a particularly glowing report on one of the oil-producing companies. Departing from usual practice, he strongly urged that its stock be acquired. The mutual fund's investment staff, largely on the strength of the analyst's recommendation, passed up five other issues of similar quality under consideration at the time and purchased a sizable block of the stock. In less than a year it increased in value from $20 to $30 a share. The analyst was elated and at the first opportunity called the results of his astuteness to the attention of the fund's officials. They were far from enthusiastic. They pointed out that, although it was true that the stock had appreciated 50% in value since it had been purchased, 36 of the 42 stocks in the fund portfolio had shown greater appreciation for the same period. Furthermore, the average increase for all 42 issues was 68%.

Keywords: Access; Awareness; Information; Investment; Stock MarketDOI: http://dx.doi.org/10.3126/bj.v2i1.5702Banking Journal 2012; 2(1): 1-15

I SHOULD LIKE TO REPORT on our European trip from the viewpoint of the institutional investor, specifically the pension fund. My comments will center almost entirely on the five countries we visited. These were the United Kingdom, France, Italy, Germany, and the Netherlands. I shall mention a number of problems I believe the potential institutional investor must consider and call attention to several factors of general economic importance in investing in these countries.

There are several ways in which one can judge what the Fund has accomplished. The first is to see how the world economy has fared under the Bretton Woods system. There has been an unprecedented growth of international trade and investment; and the world has been very prosperous, at least in the large industrial countries. Without directly attributing this to the Fund, we can imply that it could not have occurred without Bretton Woods — which maybe true to a limited extent.

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A problem confronting all individuals who have accumulated funds is that of investment management. Sound initial selection and careful supervision are essential in order to conserve the principal and gain a satisfactory return. The traditional idea of "permanent investment" has resulted for decades in losses of considerable portions of accumulated funds. We live in a dynamic economic world and investment values may rapidly change. The question of investment management is not only one of how to do it but also one of who should do it. At one time or another thousands of individuals who have investment funds place them in trust with trust institutions for supervision. While there is a paucity of data on the aggregate amount of individual trust property being administered by trust institutions,1 there is evidence that the volume totals many billions of dollars. It constitutes a vital part of the investment fund of the nation. The use to which they put it is of major economic significance. The direction they give the huge amount of capital under their supervision will affect the opportunity and progress of enterprises. It is impossible to obtain more than fragmentary data on personal trust business of trust institutions. With the exception of some data published in, a few states, the volume of trust business carried by trust companies and state commercial banks is not reported. Rather adequate information is published relative to personal trust business of national banks. There is also a paucity of statistics on the investment of trust property. These data are reported for a few states. To get an idea how trust institutions invest trust property we have to use the general statistics of national banks, Massachusetts trust institutions, or mere samples of individual institutions. Specific data on the investments of individual trusts are reported to probate courts in some states. The information, however, is hard to obtain and frequently is in such a form as to make it very difficult to assemble or use. This survey of trust investments is primarily devoted to institutional holdings. This limitation is a matter of expediency because there are far more data on invest* A.B., 1922, West Virginia University; A.M., I926, Ph.D., 1934, Columbia University. Assistant Professor of Finance, The Ohio State University. Author of The Investment Policy of Trust Institutions (Business Publications, Inc., Chicago, 1934). '"Trust institution" means any incorporated institution-trust company, national bank, or other corporation-empowered to accept and execute trusts.

Institutional investors have come to play an increasingly important role in the American capital or long-term investment fund market. Over the past 30 years, the combined resources of life and property insurance companies, mutual savings banks, and savings and loan associations, together with the investments of the commercial banking system, increased from 30 billion to 225 billion dollars. During this same period, the proportion of total public and private real estate mortgage and long-term corporate debt held by these institutions rose to one-half from somewhat less than one-third. If public and private self-insured pension and retirement funds and trust departments of commercial banks are also included, the proportion of public and long-term private debt held at the present time by institutional, as contrasted with individual, investors is even greater. Social and economic developments since I920 have encouraged the growth of institutional investors to the point where they now represent a dominant force in the capital market. By accepting funds from numerous individuals, including those who save only very modest amounts, institutional investors have established a sizable pool of long-term investment funds into which new savings are continually being added and through which funds obtained from the repayment of outstanding loans flow into new investment outlets. While the nation-wide operations of many of these institutional investors have imparted a mobility to investment funds that has gone far toward offsetting excess demand in some areas of the country against over-supply in others, statutory and supervisory restrictions to which most of these institutions are subject have largely limited long-term financing to various forms of debt, as contrasted with equity, capital. At the same time, institutional investors have taken the initiative for de