The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-02-21
Seeks Place Where an Income
Can Be Earned.
Our Financial Market Both
Great and Easy.
WEALTH LEAVES GREAT BRITAIN
Political Conditions in England
Similar to Those Here!
No Difficulty About Negotiating
Securities, Holland Says.

New York. Feb. 21-Otto Kahn. whose
intimate relation with one of the larg-
est of national banking houses qualities
him to speak on financial subjects, is
the first banker who has v'antured to
say for publication what he believes the
investment of American capital in Ger
man and Prussian loans now amounts
to. Mr.. Kahn is careful not to fix
maximum amount, but he did say
shortly after his arrival from Europe
that he felt certain that more than i
hundred millions of American money
had recently found investment in Ger
man loans.
In December various estimates were
made of the amounts of American
money which went to Germany. One or
two fixed the amount as high as a hun
dred and fifty millions. The estimate
most frequently heard was seventy-fve
millions. AS presume bly, Mr.. Kahn has
had unusually good facilities for learn
ing what the investment has been his
statement of a minimum amount of
hundred millions is accepted in financial
districts as accurate.
There are many surmises as to the
manner in which this money has been
invested A part of 1T, although pre-
sumably not a very large portion, has
gone into some long time investments
in the Prussian and imperial German
loans. Three million dollars is spoken
of as the aggregate amount of invest
ment of that kind
Some of the American banking houses
are investing large amounts of money
in Germany upon call. There have also
been heavy discounts of what are called
finance bills. A majority of the loans
made last summer were of this char
acter. Some of our bankers say that it
is rather unusual to lend money to for
eign banking institutions upon call;
that is a method usually reserved for
loans which brokers and spectators
make. Other bankers are persuaded
that loans of this kind have been made
in the past.
The magnitude OF the credits which
we have tablished in Europe has
made it possible to negotiate loans Of
this kind with Germany without in any
serious manner interfering with our
own money markets Some have
thought that this unusual, even unpre-
cedented, business of American capital
in great amount in Germany is a trans
action which should be carefully studied
by an investigating committee which is
animated by sincere purpose to OBJ
tain good information respecting pre-
vailing financial and monetary c6ndi-
lions.
The Flow of Capital.
Two reasons are given for this
movement of American money capital
to the continent of Europe One
which naturally suggests itself is the
magnitude of idle capital which is now
carried in the United States. It is
frequently said that we have become,
temporarily at least, the easiest and
the greatest money market in the
world. That is due to our great ac-
emulation of capital. So the bank
ers say that this capital is seeking
some investment which will make
some return in the way of income
Another Interpretation which is based
upon fundamental financial economics
70T-if.a toll =
tinid- Mr.. Kahn seems to have hint
ed at that when he spoke of an in
vestment of more than hundred
millions of American money in Ger
man loans at this time. He is quoted
as having said that capital won't
fight; capital can't fight; but it can run
away faster than any sprinting thing"
This definition sounds exactly like Mr..
Kahn. He frequently expresses sound
financial ideas in epigrams that have
a half humorous twist and as he thus
spoke of capital almost in the same
breath in which he spoke of the
American money to Germany. it has
been a fair inference that he has
thought that this feature of our finan-
cial activity reflects something of the |
of American capital so far as
inVestm ents in large amounts in Amer !
lean undertakings are concerned.
TiInid English Capital.
Many reports are received In this |
city to the effect that English capital |
by reason of political conditions in |
Great Britain and the prevailing dis
position very heavily to tax wealth, |
is departing from Great Britain in |
of unprecedented size. This |
testimony comes from SO many sources !
which are considered good that in this |
city 1t is believed to be justified. |
if Mr.. Kahn's intimations |
be correct that American capital is !
departing to Germany because of pre- /
xyr.f i11rr sT1f
testified that British capital is depart |
ing from Great Britain for like rea-
son are not mistaken, then the world /
is having an unusual object lesson |
which teaches the real timidity of cap |
ital; or, as Mr.. Kahn says. the ability |
to run away faster than any other /
sprtnting thing
Not So Very Tfrnid.
Yet, after all, recent Developments
show that American capital is not so |
very tiInid. Constructive propositions
requiring very heavy investment of
money are undoubtedly holding back.
but this is probably due quite as much
to the uncertainty of the promoters
of large undertakings respecting the
course of business as it is to any abil-
Ity to tempt capital in large amounts
AS, for instance, if the Lake Shore
one year notes for twelve million dol
lars which last week were negotiated
in Paris for the purpose of taking IN
notes sold in Paris a year ago had
been offered in the United States the
belief is general that they would have
been quickly snapped up. And since
the first of the year there has been
no difficulty about marketing large
blocks of securities. Apparently there
is less disposition on the part of bust
ness men to seek great capital than |
here is unwillingness on the part of
great capital to make investment in
safe propositions The trouble here is
not with the money market, speaking
generally but with that timidity of
business men themselves. And. if it
be true as Mr. Kahn says. that cap
tai is one of the most timid things in
he world il is also certain that CANT