The Birmingham age-herald., 1914-09-15

$1b0. .0o0, 900 if necessary, which will faclli- tate the liquidation of the indebtedness abroad of American merchants, manufac- turers and importers, all of these being commercial obligations as distinguished from any which may have arisen on ac- count of the sale of American securities by Great Britain and the continent of Europe. This plan is national in It's scope When put in operation it will be the first time that national banks as a whole have allied themselves as a init for the purpose of relieving an extraordi- nary situation. The best opinion in imam cial districts seems to be that the sub scribers to this gold pool will not in al probability, be called upsn for tha full amount of their subscriptions The fact that such subscription fund does exist and ma vat any moment be utilized is sure to infuse credit Into the American commercial condition
 A Great Syndicate
 There remains the necessity not only Of taking care of American securities which were sold in large amounts in the sum mer, but also such action will make 1t practicable to open the securities markets without endangering them by the throw ing into them of American securities of fered for sale abroad.
 A plan of this kind can be perfected presumably, or at least best compassed' through the creation of an underwriting syndicate. Cooperation with that syn dicate cannot, of course. be expected from the government. The national banks which may properly yield some part oi their gold reserves to the relief of com- mercial situation, cannot be expected to join 1 nestablshing a great fund whereby American securities that have recently been sold can be taken care of.
 The intimation has been made by some of those who have knowledge of the de tails of the recent conference between representative of the 12 reserve districts that in an informal way the estimate was reached that about $l3o, ,0o0.oo0 represent the sale of American securities abroad under the recent stress of war. The ques- tion now is whether it is practicable or expedient to organize an underwriting syndicate which will be rpepared to ac- cept thees American securities, lifting the burden of carrying these from the indi- viduals who since the close of the stock exchange have been compelled, In one way or another. to take care of them. A good many factors enter into proposi- tion of that kind. some of them rather complicated. It is commonly thought by the bankers that so far as the amount needed is cocnerned there would be no difficulty in organizing an underwritns, syndicate large enough to accept and carry these securities. But there are other considerations which 1t is necessary carefully to work out before the plan is formulated. One of these is the protec- ton of the securities market against further offerings of American securities by those who live abroad. The plan com monly suggested is this: If an underwrit- ing syndicate is organized so that the burden of caring for the s13o,000,o GOO of American securities is lifted from indi- viduals then the governors of the stock exchange may find 1t practicable to open the exchange after having adopted rule by which traders will be forbidden from dealing in any securities for foreign &C., count. In other words, they would be pro- hibited from buying or selling American securities held abroad. A rule of that kind. it is presumed. would give ample protection against the renewed dumping of American securities upon our market.
 We have no unified bank and therefore no central authority which is able to mo- biliZe and centralize reserves In the place of that the banks, with the ap- proval of the federal reserve board are voluntarily to mobilize and centralize some portion of their reserves. This will make it possible for the early liquida- ton of the obligations now outsta nc nc in New York city, and in the next place to liuuidate the obligations of American manufacturers. merchants and importers and should there be perfected a plan whereby American securities already sold can be taken care of any further offerings of American securities by England snd the continent of Europe made of nc avail. then the situation in many re- spects will be cleared of embarrassment and there will be revival temporarily at least, of unprecedented magnitude ot exports of American commodities