The Birmingham age-herald., 1913-06-07
.F|NANC|ERS HAVE
GREAT CONFIDENCE
IN NATION FUTURE
Bakers Recent Words Only
Reflection of Those of ].
p. Morgan Last Winter
COUNTRY PASSING
WAITING PERIOD
Money Is Harder to Secure for Large
Enterprises Because Men With
Capital Are Awaiting
Readjustment
Nv HOLLAND

New York, June 6.-(Special. )-George
F. Baker, who followed Mr.. Morgan as q
witness before the Pujo committee, was
quoted in dispatches from Chicago a day
or two ago as having spoken as any mar
of intelligence would do If his confidence
in the prosperity of the United States was
very strong. Mr.. Baker does not often
speak for publication when he is at his
home in this city. So 1t has been assumed
that his recent sojourn in Chicago and
the close personal touch with those who
are directing very important affairs in
the Mississippi valley served so greatly to
strengthen his own profound belief in the
healthfulness that characterizes almost
every kind of business in the United States
as to justify him In speaking briefly but
enphatically for publication.
Mr.. Bakers views are similar to those
which J. Pierpont Morgan heM at TIE
time of his departure from the United
States for Egypt, in January. One of Mr..
MOI gans personal friends met him, either
in Egypt or on the way back from Egypt
to Rome. and began conversation with
him to the end that he might find out
what Mr.. Morgan's view of existing fnan-
cial and business conditions in the United
States was. This conversation he report
ed to some of his friends soon after his
return to this city.
He asked MIR. Morgan if he thought the
depressing financial situation, especially in
the securities market was to be long con-
tinued. In reply, Mr. Morgan said that
= oil fn ho horne in min "a
until human nature changes men are cer-
tain to trade, to barter, even to speculate
and to take up very large plans for the
development of natural resources. That
being the truth, this factor must not be
overlooked i'll considering business condi-
tions. 1t is certain, Mr.. Morgan thought
to compel renewed business and financial
activity. Furthermore, the harvesting of
phenomenal crops such as have been gar
nered for the past six or seven years In
the United States and are likely to be gar
nered even in larger amounts in the COM
ing years will inevitably lead to a recur-
Ierce of financial, commercial and busi-
ness activity. Mr. Morgan said, further
more that it seems to be forgotten that
there are always intermitten periods oi
depression coming in between times of
great prosperity. This he thought was
very healthfu
The present slaekening is only tempor-
ary a halting to catch breath and to -e-
gain energy so that there may be strength
10 go on with renewed vigor. Mr.. Nor
gan also spoke with intense enthusiasm,
although in few words, of the heathful
growth NOT only materially, but morally
ard intellectually, which is to characterize
the United States.
These were probably the last words
spoken by Mr.. Morgan to any friend in
which he expressed his never changing
confidence in the permanence of American
institutions and the healthfulntss of our
material growth.
What Mr.. Baker is reported to have
said at Chicago sounds ike an echo Of
what Mr.. Morgan said to lis friend three
thousand miles away only few weeks
before his death.
A MOnitiOn Justified
Only a few days ago Vice President Tai
bert of the National City bank spoke to
the Bankers club at Detroit and his words
of monition were so carefully needed that
Detroit bankers sent private communica-
tions to their friends in New York il
which they told of he profound impress
sion Mr.. Talbert's address had made. He
intimated that the present is good time
to prepare for emergencies. He set forth
briefly the reason why 1t seemed to him
that the present is no time to attempt to
finance very large lines of securities or to
initiate great undertakings. There was
q clear intimation that und erwritIng sym
dicates would do well If they would refuse
their aid In the marketing of large blocks
of securities. Mr.. Talberts view was tina.
the worlds working capital at this time
needs reI lehishment, since ii is not large
enough to meet the demands of nations
ana of corporations that seek great funds.
Sooner probably than Mr.. 'talbert ak
pected, there came justification of his
monitions. One Las been furnished 5y
New York state rhe Empire State, the
possessor of stupendous resources, is COM
PEELED to go into the market and barter as
IL has never done. at least since war
days, so that it may obtain as small an
amount for the state as s2IO00,00o. The
state is going TO offer its short time notes
Tor discount or for sale at auction. 1t is
compelled to offer n much as AZ per cent
interest and possibly per cent must be
offered il the money is to be found for
these notes.
This is extraordinary. almost unprece-
dented. in financing. Yet it perfectly re-
fleets world wide f.iancial conditions.
Patient inquiry has demonstrated that the
state of New York cannot at this time sell
a bond bearing per cent interest and
with life of so years at par The stare
cannot under the law sell its obligations
at less than par Therefore in order to
tempt money from those who are able to
invest the state must offer much as AZ
rer cent AMI may he compelled to agree TO
Z per cent There could not be better
demonstration that Mr.. Talbert's moni-
ticns were we'll founded than this nctiol
soon to be taken by New York state.
In Other Markets
From Europe there has come within a
few days after this Detroit address visible
demonstration of the conditions which JUS
titled Mr.. Talbert in speaking as he did.
The financial markets of the world are
always clogged with securities which have
been put out by nations, by railroad COM
panies and by CORPORATIONS with intent to
secure new capital. Only a few days ago
there was a note of glee that the new
chinese loan of s125,000. 900 should have
heen oyersubscrbed. But this very over
suhscriution was Of Itself characteristic
of disturbed financial conditions and the
marketing of the loan seems to have ag-
eravated the financial pressure. China
could not have obtained funds upon this
security unless It had been willing TO
shave only So cents on the dollar and also
have been willing TO pay per cent inter-
est That was the bait which tempted
-. u,ho bad money to invest