The Birmingham age-herald., 1914-10-16
WI Ha55 10 | MItRtSI HI|M Htkt Eminent British Financier Is Making Trip to America for Unknown Purpose MAY GIVE IMPETUS
 TO FOREIGN TRADE Adjustment of Foreign Exchange Con- ditions Regarded As Most Inn portant In Resumption of
 Business
Ky HOLLAND

New York October 15--(Special )--As
 Sir George Paish of London Is the au- thorized financial adviser of the British treasury, the report that he had sailed from England for the United States led
 to the belief that his visit was to be off
 cial and probably is occasioned by the de-
 sire of the British government. the Bank of England and the financial authorities of London to cooperate with the Ameri- can bankers so that as speedily as pos-
 sible normal or fairly normal international financial conditions can be established.
 It may be that there had been intima- tions in London that some in the United States who are attempting to restore good I financial conditions have felt that London was not cooperating with this country as l completely as was hoped. A good deal of criticism of that kind has been heard
 although it does not come from financial
 leaders. It appears to have originated with some of those who have found that notwithstanding the establishment of a
 gold fund of slo0.0oO0oO for the purpose of
 relieving the markets and enabling Amer
 jeans to pay existing obligations. some of these debtors have been unable to secure the assistance of exchange which they have sought.
 The committee which has the direction of this gold fund has heard these criti- cisms and believes that they are unjus- tified. Their answer to the criticisms has
 been that it could not reasonably be ex-
 pected that relief would be immediately
 furnished by the formation of the gold l ofa1l ft,x lAt- f.,x, ..f
 Sl00 100000 had not been secured Further
 more, there were many tentative details
 to be worked out before the operation of l funds could speedily and satisfactorily l be effected The criticism that London
 and the Bank of England have not cor
 dially co-operated with the American | bankers for the relief of the situation
 probably reflects this local complaint. I Sir George Paish. the governors of the
 Bank of England, the British treasury
 and our own financial leaders have good knowledge of some factors of the situa- ton of which the public has as yet re- ceived no information. Some of the fiuan- ! cial news is-to use a metaphor-as care l fully censored as is the war news sent 1 from Europe, or as are the reports which tell of the recent heavy buying of Amer 1 ioan commodities by representatives of Great Britain, France, Russia, Italy and
 Japan.
 i Real Cooperation
 That there has been real cooperation
 of spirit and, as far as possible, in fact, between the American bankers and the 1 financial authorities of London, Is not to I be questioned. The visit of Sir George
 Paish to the United States at this time demonstrates this spirit of cooperation. Undoubtedly his visit, so far as it's off cial character Is concerned, has reference "a aGf n h lig1 .H A. T can have no special reference to the un- derwritlng of the fund of $100, 0OO, 900, sS2. | oo0,o00 of which are to be in gold, by the
 banks of New York city for the purpose or enabling the government of the city to I pay the existing indebtedness of Europe
 on account of New York city excheouer | bills marketed in Europe some time ago.
 For that transaction is an accomplished
 fact The subscription is made up. Some
 or the gold needed has been sent to Ot- 1 iowa and exchange has already been
 drawn against 1t, so that the first of New
 fork city obligations is promptly paid. The Gold Fund
 The gold fund, however. is. so far as
 It's operation Is concerned. still incom- piete. But there is no doubt that, should
 It be necessary, the s100. 900 in gold will De sent to Ottawa or, possibly, to such other place as Sir George Paish shall
 decignate so that exchange may be drawn
 against 1t. thereby enabling American oeptors to buy the negotiable instru-
 ments with which they can pay their debts.
 An Economists Point of View
 In the late spring. when none but those
 who are in the highest authority in the
 courts Of Europe and that of Great Brit
 am, had any inkling of the imminence of
 war, Sir George Paish estimated that
 the total indebtedness of the United States
 70 foreign nations was approximately $6,- | Vu'Vo The publication of this estimate | astonisned many persons in the United | states although the figure did not cause any astonishment to those who have had opportunity for learning the character and i extent of our borrowings in Europe
 There was, however. a misapprehension
 Of the meaning behind Sir Georges esti- mate. He did not intend to be understood | as saying that the United States is a debtor to the world upon obligations for which immediate payment could be de- manded. The existing obligations to the | continent of Europe and to Great Britain
 that is to say. those upon which ma l turity has been reached, are not very
 large When the committees which, as a | whole. represented the 12 federal reserve districts of the United States met on Sep /, tember 4, the federal reserve board at 1 Washington in conference a rough esti- | mate was made of the aggregate amount of the indebtedness in other lands by the United States which had then matured or was about to mature. The estimate ran l from $50. 900 to S200000.0 900. This repre- sented American debts which were due
 abroad. Some in this city thought the
 estimate of $2o0,000,000 was too large. Pre-
 sumably President J. B. Forgan of the
 First National bank of Chicago suspected
 the estimate might have been too large.
 for when he proposed the formation of an
 underwriting syndicate of all the Amer ican national banks by which gold fund could be secured he fixed the amount of 1 the subscription at l50000,O00 This was | subsequently reduced to $1O0 ,O00 O0O and 1t represents the belief of the banker sand of the federal reserve board that fund of this size would be sufficient to pro- , vide American debtors with the means by which they can meet their obligations. 1 What Sir George Paish had in mind when he made his estimate was the az gregate amount of American bmorrow- | ings, represented by securities. Some of these securities have years to run, and ate debt obligations through an enforced sale of them in the securities market A few months earlier, Sir George. who l Is esteemed one of the ablest and best informed of all of those in Great Britain or on the continent of Europe who are associated with financial matters, point ed out that notwithstanding the heavy
 borrowings of capital on the continent and in Great Britain by the United States l our natural resources are so many and so varied, and besides are so marvelously rich. that in the development of them