New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-05-03
OVER 9 BILLIONS
IN WAR LOANS
National City Bank Finds
Conditions Ripe for Spec
ulative Movement.

The National City Bank. in its May
letter on financial conditions, points
out that war loans made by the bel
ligerent European nations 10 date
reach the enormous total of s9,613, AGO.
600, divided as follows: Great Britain,
s2,525, 100000; France, s1,s02, 400, 900;
Russia, s1,065, 100000; Germany, 3d.
491 ,000, 900, and Austria Hungary, $780,
100000. This new financing, it is empha-
sized, has been forthcoming from cur
rent savings, sales of securities In
foreign markets and the pyramiding
of credit, meaning by the latter the
pledging of private or corporate credit
as a basis for government credit
Figures are shown giving the rela-
lively small increase in gold holdings
of the principal banks of the leading
European countries, compared with the
increase in deposits and circulation.
The latter have increased nearly 100
per cent, while the former have in
creased about 26 per cent. The let
ter adds:
"In ordinary times such an inflated
condition of the central institutions,
with easy and cheap money in the
open markets, would be full OF posi-
bilties Of mischief. 1t is an axiom
that available funds will inevitably
find their way into use, and, aside from
the fact of war, the stage is now set
for a gigantic play Of credit and prices
with the usual safeguards wanting.
VIII the demands of the war upon
credit and industry prevent the read
iustment that would otherwise occur
under like conditions?
ain this country there has been stir
enough on the Stock Exchange to sug-
gest the inception of such a specula-
tive movement. 1t usually begins with
stocks. The London stock market has
been so dead, however, that on March
10 now and lower list of minimum
prices was promulgated and the mar
ket quickly dropped to most Of .hem.
Since then, on the strength OF the
New York market, a little more life
has been manifested there, but moth
ing like a speculative fever has ap-
peared.
"The great danger from an expansion
of credit is a disturbance of prices and
values, but the war is a depressing in
fuence, which goes far toward suppress
sing speculative adventures. II is hard
for the European public to see visions
Of prosperity under present conditions.
The absorption of Europe in the war
and the complete employment of all its
productive and constructive resources
in the war. make practically impossible
such an expansion Of industry as usu-
ally characterizes period Of credit
expansion and speculative prices. In
this sense the war may be said to be
conservative influence.
The continuous outpouring OF govern
ment securities, together with all the
uncertainties of the future, tends 10
keep down the price Of standard securl-
ties. and that influence reaches out to
every class Of investments. But, 1t may
be asked, if the currencies depreclate,
do not prices rise by that very fact, and
will not this make all values specu-
lative? Have not commodity prices
risen already? Commodity prices have
risen, but there are too many other
influences, such as disorganized trade,
scarcity Of shipping, scarcity of labor,
etc. to allow of saying that the cur
rencies are deprecated in domestic
transactions by reason Of redundancy.
Measured by it's value in exchange
transactions, the currency of the United
States was deprecated" during several
months last fall, but il was not re-
dundant or deprecated in domestic
trade"