The Birmingham age-herald., 1914-08-31
Britain Has Six Billions
 Tn American Securities
Amount More Than Doubled Since 19OO-The Effect On Business.
By HOLLAND

New York, August 9a.-tSpecial. )-Since the close of the New York Stock ex- change an attempt has been made to get an estimate of the aggregate amount of American securities at par which. before the London Stock excnange closed. were held in Great Britain and on the conti- nent of Europe. An estimate of the total e-ne1can securities held abroad was made sometime ago by Sir George Paish, editor of the leading economic journal of Great Britain, and regarded as very high authority on financial conditions. Sir Georges estimate. set forth in the form of statistics, has always been found fair ly accurate He was quoted as having said that about $6.oooooo,ooo of American securities were early in the present year in the hands of European investors.
 Upon what this estimate was based was not explained. But it was noticed that those to whom inquiry was made in this city were inclined to think that the estimate was rather high.
 If it should be fairly accurate, then since 1900 Great Britain and the conti- nent of Europe have increased their hold ings of American securities by not less than ss,0oO.000 900. and very likely as much as s4o00, coo.
 Sales In 1899
 In 1S99 and continuing oyer into 1900, there were sold in Europe principally in London and through private and therefore unrecorded means. about $1. GOO of American securities estimated at par value. At that time the best authorities in this city estimated that just before this selling movement began Europe held ! about 5000 000,000 of American securities. That was the view taken by the late Fred erick D. Happen. He was in fairly good condition to give an estimate. He was chairman of the Clearing House associa- tion committee, whose duty it was to test the real value of the gold brought into the United States from Europe in 1888. The aggregate amount of this gold was s10o,0000o0. When 1t arrived at the clear ing house the average deposit being about N,000.000 a day, 1t was critically tested as to weight and fineness by the committee of which MT. Happen was chairman Upon the results of these tests were based the clearing house gold certifi- cates which Were to be paid out to the banks which had deposited the gold in the clearing house vaults.
 When this gold movement was nearly over MT. Happen spoke of it as extraordi- nary, really without precedent. because
 
 of trade balances notwithstanding the fact that London and the continent of Europe had been selling American se- curities. MT. Happen estimated that the total sales while this movement was un- der way were not far from Sl O00 GOO 000 Therefore the United States had not only absorbed one-third of it's estimated debt to Europe represented by securities in vestments, but had in addition imported about sl0o,000000 gold.
 A Great Market
 If. therefore. the estimate of Sir George Paish that at the beginning of the year 1914 Great Britain and the continent of Europe held about s6,0o0 100000 of Amer 1can securities, is correct. they must have purchased since the year 1900 from s3,o00.- OO0.0O0 to Si,000000,0o0 of these securities t In, view of the so-ealled "silenr' or t'rich mans panic of 1902 and the cur rency panic of 1907, it seems to many of whom inquiry is made almost incredl le that purchases of American securities could have been made abroad aggre- gating $4,000,000,000. Still, London and Germany and France may have taken advantage of our own appreciated mar ket in 1902 and bought securities in large amounts.
 The best authorities were of the opin- ion that the panic of 1884 was caused by the great expansion of railway con struction which led to the closing out in London and on the continent of E,u- rope of railway securities in enormous amounts. The undue expansion of credit thereby occasioned brought on the panic of 1884, although the immediate cause was the failure of the private banking house of Grant & Ward.
 The estimate commonly made in the securities market district of the aggre- gate amount of American securities which were sold in Europe immediately after the outbreak of the war, and which We're dumped upon the American mar ket, thereby justfying lrc closing of our own stock exchange was that the total did not exceed ab put SIPS, 600 600. There is always a tendency good judges said, to exaggerate figures in times like those of the present moment. For in- stance, 1t was commonly believed that one of the steamers which recently ar- rived from New York with a large amount of American securities which had been sold in the London and other Eu- ropean markets, brought . total of $40 ooo'oOo worth of these securities. But the fact was that the amount was much less than this, so that it was all the more easy to arrange privately for the liquidation of these securities.
 Holding Not Effected
 But in any event If Great Britain and the continent of Europe held early this year American securities at the par value of s6,000000,00o then the sale of $1Goo00,0000, or whereabouts, arter the war began, would not greatly affect these In fact, our own market could have easily cared for the sale aggre- eating $lo000O,00o provided the securities had not been dumped on the stock ex- change in single day or in two or three days.
 An illustration of this can be fur- nished by an incident tn the silent or rich mems panic of 1902. The late Commodore Van Santvoord was the owner of about s6,000,00o of St. Paul rail road stock. That stock commanded one day price far in excess of that which the commodore paid for it. He decided to sell 1t so that he could gain the profit, feeling certain that he could buy 1t back again after the panic was over But upon inquiry he found that it was not going to do for him to offer that stock in one lump. The effect of that would Have been instantly to deprecate Its market quotation. When he learned that the only available way was for him to break 1t up into sruall blocks and to let the sale run over several days he decided not to sell.
 Yet he estimated that had he taken 1-.- -~.-