The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-09-04
AMERICAN SECURITIES ABROAD.
A Proposal TO Refund Them by Popular
Suhscr Inf ion.

subscription.
To THE EDITOR OF THE SUN--Str: In
recent letter ! suggested that as one
way of solving the problem presented by
the European held American securities
that overhang our markets the bankers
OF Boston. New York, Chicago. Philadel-
phia. San Francisco, Atlanta, New
Orleans and other cities should get to-
gether and choose from among themselves
body OF men to act as board OF trus-
tees, this board to offer. in pieces OF 500.
interest bearing certificates In fund
OF s200.O0O.0O0. 100000 900 or $1,000
O00,O 600 to the people OF the whole country.
the fund when subscribed to be used to
buy the European shares at n price at
which the dividends upon them should
Yield per cent. or better. the securities
to be held until more normal times and
sold gradually at normal prices. the re-
sultant profits to be divided among the
certificate holders.
one OF the criticisms that have been
made upon the plan Is that It's carrying
out would necessltate the shipping OF gold
II probably would. but the value OF gold
lies In using II and not In boarding II.
The rate OF exchange would be obviously
one Of the factors that would enter Into
| the making OF the prices at which the
foreign securities should be purchased. and
II must be remembered the gold shipped
modities which Europe must buy of US.
Nor IL IL impossible that means might
be devised by which European bankers
would agree to take acceptances against
cash deposited In New York.
The problem for us In TO find the best
way out of the situation which confronts
us As matters stand now our exchanges
and banks are menaced by securities held
bv Europeans which will be pressed for
sale the moment opportunity offers.
Under ordinary processes, when THIS time
comes. to the foreign offerings will be
added another avalanche Of SHARES In the
hands OF weak or timid holders of shares
held by banks as collateral and OF short
sales by the thousand of shares II
would be much AZ the British soldier
| described the attack by the Germans.
shares would pour on the market like
peas from sack Prices would melt
| like tailow dip in molten iron. and
financial panic with all 1t means would be
| In fun swing.
The plan proposed Is to meet the condi.
| tons by cooperation and united strength.
under central control. instead OF meeting
| II In the ordinary way by depending on
/ individual attempts at support and ikdi-
| vidual buyings by bargain hunters who
| come into the market when panic prices
prevail. The plan is nothing more than
| putting into practice on large scale
| the plan often adopted to prevent the
breaking of the market by the throwing
| upon II In a short period OF an unusual
amount of stock. In an instance that
| comes to mind an estate held $4,000
/ shares Of "A certain security. The shares
had TO be sold. To nave sold them in
one block in the open exchange would
| have cut the going price In half.
| syndicate was organized OF stockholders
In the company, negotiations were opened
with the estate and the $4,000 shares
were bought at price under the market
but at better price than could have been
| obtained II they had been thrown upon
| II. Inside OF year or two the syndicate
gradually disposed OF the stock at prices
| which Melted a good profit 10 the partici-
pants. The European holders OF our Sc
curities are in much the position of the
estate, and there are thousands OF Ameri-
| cans who would go into n syndicate to
prevent threatened panic and to secure
future profit.
| What foreign held securities should be
bought and at what prices? These Ques-
lions would have to be left to the board
| OF trustees to determine. The securities
offered are not offered because Of i'm
pairment OF the properties against which
they are issued, but because Of the secur-
| lty holders pressing need for money. The
conditions that give Mise 10 their necessity
are not of Americas making. When Sc
! curities bid for money, prices of course
will rule far lower than when money bids
for securities.
II the plan proposed should be adopted
II ought to he possible, after determining
what securities TO buy. To offer to Euro
pean holders TO take their shares at n
given price. The purchases would not he
stock exchange transactions but would be
like that cited between the estate and the
syndicate. The foreign holders would get
more than they would II their securities
IN ordinary the cloud
over our markets would be dispelled and
trust certificate holders would make an
eventual profit.
Why cannot the plan that has proved
wise and practicable on n small scale be
proved wise and practicable on large
scale? JOHN CUTLER.
NEWTON, Mass, September 3.