The sun. [volume] (New York [N.Y.]) 1833-1916, 1913-06-03

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pers have shown sccptlcism over the
much rumored 5000 900 900 French war
loan and cables have announced that
France would finance her needs with
short term obligations.
W Indication of Goid iIORrdiUg.
Despite the reported heavy boarding
nf gold abroad which has continued over
period Of nearly eight months 1t ,s
curious that there Is no evidence Of II
IN tho reports of the principal state
hanks OF Europe. For instance. COM
piation made as recently a. May 29 or
The gold and silver holdings 10 the
banks of England. France, Geymany,
Russia Austria Hungary. spain, Italy,
the Netherlands. Belgium. sweden,
Switzerland and Norway combined give
no Indications OF gold wShdrawals
Whatever. on that date the combined
holdings were; Gold. 1882 ,9l1,9S3: silver.
.96 6G633iO These totals compare with
total holdings in the same institutions
on May 20. 1912. uf gold. t5OS.'26.S21.
silver. tiOS.?07 $40. While silver hold
ings decreased some fl2,oOOOO0 within
the wear gold holdings expanded
t2i.000000. The aggregate holdings or
gold and silver combined In Virtually all
tho great state banks Of Europe is tl2.-
900 600 in excess Of the preceding year
There may he some other explanation
of the phenomena. but the figures do
not indicate excessive gold boarding on
Tho part Of Europe. lf so II does NOT
show Itself in the state banks. rms
suggests what Is now the accepted
theory IN financial circles in accounting
for tho unsatisfactory investment mar
ket that available. supplies of capital are
insufficient to provide FOR all the financ.
ing that borrowing governments. munic-
ipalitics States. colonies aud corpora
lions have undertaken.
Worldwi idr credit strain.
A. a result financial centres are suf-
ferng from credit strain of world
wide application. capital supplies fa!l-
ing the cNpectant. borrowers in many
instances have drawn upon credit. such
~ the cas-. with the undersubscrihcd
London iiotationS. Failing to sell the
issues the unhappy Underwriters are
forced to negotiate loans to carry them
in the London market o' elsewhere.
Something Of the same nature has re-
~iltcd here Railway corporations. un-
able to sell bonds freely or upon sat
isfactory income basis have resorted
to short term loans OF ;hesc. $685.
900. 900 are at present outsta nding. They
constitute obligations which must be
repaid or funded later on, and the
awkward feature about them is that
they may come due al an unpropitious
time for negotiating loans or arranging
for permanent financing This was IL
lustrated by the recent insolvency of the
ST. Louis and San Francisco IA way,
which could do neither
In nothing in recent months has the
strain on capital in the American mar
ket manifested itself more strikingiy
ihan in municipal borrowing. State.
county. and city bonds and those OF
other municipal subdiV Vrons are Sc
curity supported 10y the taxing power
of their respective communities. They
are sold after public announcement to
the highest bidder. They are non spec
ulative and appeal solely to investors
The price and interest basis at which
they are marketed furnishes the best
indext the country has Of the worth of
investment capital
Failure Of Municipal Vonds.
In March the municipal bond ISSUES
which failed Of sale exceeded 10y s3-
100000 tbe amount Of ISSUES sold Fail
ures OF municipal bond sales were Of
repeated occurrence In April and MAY
also.
Many issues We're Withdrawn entirely
and readvert.sed AT a higher Interest
rate In order to tempt BUYERS Some
were abandoned. In instances the un-
successful securities We're among the
hest in the land They included States
Ike louisiana California. Missouri and
Idaho cities like San Francisco. Port
land, ore. Toledo. cincinnati Cjeve-
land and Akron. ohio: plttsburg. Pat
erson y. J., Nashville. Tenn and
Reading Pa. An important, community
like Cook county. Illinois in which
chicago is situated. also failed There
We're very many smaller communities
which failed to market heir issues and
the aggregate of unsold municipal
bonds in the last three months must
run up well toward 10000 00U
New York city was fortunate in View
~ the situation in being able to sell its
$4,000. 900 Az per cent bonds, even
though the interest rate was the high
est and the pric" the lowest obtained
for a city issue in very many years.
When the loan was first announced It's
failure was freely predicted by bankers
who realized the investment situation
ana were aware Of the inordna.c bor-
rowing propensities OF the city. Its