The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1915-01-07

profit. but more in case conditions were
unfavorable. There was agreement also
that all over 2 per cent should be paid to
the city in the form of rebate. This
Comptroller Prendergast announced was
approximately $4,000.
This appears upon superficial reading to
be detail of large financing operation
of interest only to bankers and men of
finance. But there is really deeper mean
ing in this statement. The fact that the
syndicate was able to secure small
profit. per cent, upon a transaction in
volving the export of SS0,00O0OO in gold to
Canada and that the city of New ork
received a rebate of approximately $780,
900 is one which tells a striking story of
war conditions. The farmers and the man.
ufscturers of the United States made it
possible for the syndicate to gain 2 per
cent upon it's venture and for New York
city to receive nearly 100000 in the form
of rebate.
When the New York banks by voluntary
action subscribed. each one its proper
tional part, to a syndicate which was to
unoerwrite an issue of $100 100000 of lew
York city loan and agreed to give p, each
one its proportionate part, of the gross
sum of $S00O0,O00 in gold. no one could
tell how long the immediate effect of the
outbreak of the European war upon Amer
lean conditions would last The ablest
minds confessed themselves to be in a
fog. The danger appeared to be gravely
suggestive of financial cataclysm. Com
MERGE was for a time blocked. New York
owed $S0,000,000 to creditors across the
sea, principally in London, and this entire
debt must be paid during the fall or New
Works hnx 10
and the city would have been temporarily
in bankruptcy. What the New York syn
dictate did to relieve this situation was
the first step taken toward the normal
conditions which have now been estab-
lished. The syndicate, however, did MT
know what the cost of providing exchange
would be. 1t might be very great. If it
were great then the syndicate stood to
lose not only its profit, but some portion
Of the principle of the sum.
Amout a month after this syndicate was
formed and the first export of the gold
to Ottawa was made there was observed
a change in our foreign trade situation.
An enormous demand came from belliger-
ent and neutral nations for food commod-
tiles and for material suitable for war
supplies and equipment. This demand
steadily increased until at last it was
reflected, according to the estimate of
Charles M. Schwab. in 100000 of or
ders placed in the United States for these
commodities by belligerent and neutral
nations. OF course, these enormous ship
ments began to provide exchange in plen-
ty, and late in the fall the syndicate was
able to procure exchange at such a price
as made it possible not only to contem-
plate the gaining of the small profit of
2 per cent. but also the payment of a
rebate to New York city which now Is to
be about $450,000.
&I.s> o. L.
of the United States directly supplied the
means by which this syndicate could come
out whole gain the small profit of per
cent and pay over a large sum to New
York city. 1t was a great risk which the
syndicate took when It underworld New
York city loan of s1o0,O00000. That the
risk was escaped and the transaction
was successful are something for which
both the bankers and farmers and man
ufacturers. of the United States should
receive reasonable tribute from the peo-
pie.
Herman Frasch's Estate
The late Herman Frasch who died at an
age when many of the leaders of Amer
lean industries were in their prime and
were beginning to achieve greatly. only
81, was reported in a dispatch from
France to have left an estate valued at
S., 000, 900. Mr.. Frasch however, left more
than that, for he not only made his name
one of the great traditions of American
industry, having created a world-domi-
mating industry, but he also created large
fortunes for other men, The Manufac-
turers' Record of Baltimore calls atten-
ton to the fact that perhaps the chief
achievement of Mr.. Frasch was his DEM
| onstration of the advantage of mind over
muscle
| In this city there are some closely asso-
ciated with the Vanderbilt family who
will not think so much of this achieve
ment as they will of the fact that upon
an Investment of $150,0OO made with his
eyes closed, simply taking blind chance,
the late II. Mckay Twombley realized be-
fore his death that he had made an in
/ vestment which, relatively speaking. was
by far the most profitable he mad ever
mace, although he was long associated
with the Vanderbilts in their railroad and
business undertakings. Chauncey NJ. De-
pew, who was of intimate personal asso-
citation with Mr.. Twombley, is reported to
have said that the income upon this small
| investment has been for some years ap.
l - Aofhf MA