The L'Anse sentinel. (L'Anse, L.S., Mich.) 18??-current, 1913-11-08
ID. HILL IN WARNING
RAILWAY BUILDER ASSERTS
COUNTRY rs WATERLoG6ED
WITH BONDS.
FINANCIAL DISTRESS IS SEEN
Tells Financlers and Men Of Com
n,erce In Chicago Tha. orer-issu-
aace of Securities Ia Fatal De-
bauch--Not Bounded by Value.

Chicago. Nov. flames j. Hill, the
dean OF the nations railroad builders,
on Thursday night told 900 fnanciers
and men OF commerce that credit had
been abused"-that the country Is
waterlogged with bonds" and that III
the present abuse OF credit continues
an abyss OF possible suffering and
financial distress opens before us.
Mr.. Hill delivered his warning in an
address at the annual banquet OF the
investment Bankers Association of
America at the Congress hotel. At the
same gathering Frank A. Vanderlip,
president OF the National City bank of
New York deserving danger from an
othor source, declared that the pass
age or the Glass Owen bill in its pres
Ont form would start the country on
the road to fiat money" possibility,
he said. that contains elements OF q
national disaster"
Mr.. Hill characterized the oyerissu.
ance OF securities as financial de-
bauch. but spared the railroads In his
arraignment. The liquidating value OF
railroad property. he asserted. lis so
far in excess OF its capitalization that
the margin OF safety is plainly In
view" II was on industrial promo
tions and on the extravaganza OF
states and cities that lie laid the bur-
den of his censure.
Formerly, he said, the limit of a
bond issue was the value OF the prop.
erty as an asset for immediate con-
version by forced sale at any time into
cash. In days OF soberer financing,
an Industrial concern was capitalized
at somewhere near the actual amount
OF cash put into the business.
Capital stocks, he said. might legiti-
nately to some extent represent good
will and earning power, but finding
bonds would sell where stocks would
not. the promoter began Issuing
bonds that, so far as security went.
were only stocks.
The attitude OF the investment
bankers toward the Glass-Owen cur
rency bill was treated in a report OF
the monetary commission, which rec
commended changes along the lines
approved by the American Bankers
association. Salient features OF the
report were:
Twelve federal reserve banks are
too many: the number should be re.
duced to not more than five.
The proposition that the govern
mcnt should issue the currency of the
nation Is violation Of q fundamental
principle OF finance and economy.
Any currency issue should be the OBJ
legation OF the banks.
The provision that notes shall be
redeemed in gold or lawful money
should be amended by striking out
the words "or lawful money"
G.. w. McNear chairman of the COM
1nittee on municipal bonds, read the
report OF the committee, which con-
toined the following recommendation
1T Is the opinion Of your committee
that there should be united effort on
tho part uf the municipal dealers of
this association to bring about legis-
lation In many o; the states enforc-
ing by penalty or otherwise levying,
collection and maintenance of sinking
funds, The recent default of the city
OF htchison, Kan, emphasizes this
matter.
I'VE commend the recent action of
the legislature Of the state of Massa-
chusetts, which we understand provid-
ed that in the future all municipal
bonds be issued in serial form"