The Birmingham age-herald., 1915-06-19

stock or the International Harvester company was in the hands of persons who are not of American citizenship. Investi- gation made it possible for the Wall Street Journal to show that only little over per cent of the stock of this corporatio was held abroad. The greater part of the securities which are held by citizens who live beyond the sea are railroad securi ties although there is a large amount oi foreign money invested In American req estate. There are millions of English money invested upon the security of bono and mortgage in New Yoork city req properties.
 It may be comparatively easy for Eng. land and France to get control of Amer ican railroad securities while it may bt very difficult to utilize English invest ments in American real properties SC that these funds may be employed ir paying for commodities which England is buying In such stupendous amounts 1T the United States.
 A great deal of interesting but in formal discussion is now going on every day based upon the proposition upor which the bankers of France are now understood to be engaged-namely, the swapping of American securities held 1T France for the securities behind which stands the republic of France. Should this be done, it would be without any precedent, at least so far as the United States is concerned. It Is spoken of as an excellent test of the high credit whicf American securities now possess in France that there seems to be some reluctance about exchanging these securities fol bonds issued by France herself or guar anteed by the republic of France. There will be great difficulty in getting at the American securities which are held 1T the French banks and upon which they have issued certificates that have beer sold to the French peasantry in issues o1 small denominations many not more thar the equivalent of $5 In any event thf aggregate of American securities held 1T France is not believed to compare 1T amount With the holdings of English m vestors perhaps not in amount with thu holdings of the Dutch investors. for Hol land has always been a. good market fol Americans who wanted to borrow fund! on the strength of American securities to enter. 4 s-l
 It May Have to be Done
 The strange and really anomalous situ ation in which the United States is now placed is set forth by the fact that while we owe to citizens across the sea al least s3OOO, GOO, 900, and possibly as mucf as S5, GOO 900, 900, nevertheless the three gov ernments which compose tine a ire en- gazing in highly artificial financing, some of it original and all of it Illustrating the marvellous growth in recent years In the utilization of credit so that they can pay their bills in the United States. It would appear to be the simplest kind of fnan' cial transaction. as was said by leading banker this morning, if France and Eng land were to make use of the great credit those nations possess in the form of Amer ican securities with which to meet pay ments on account of commodities these na- tions have bought in the United States The difficulty lies In the fact that wha' we owe Europe is represented by obliga' tions that have long time of life while on the other hand, what England, France and Russia owe us is represented by con tracts which call for immediate payment upon delivery of commodities.
 Ultimately, no doubt, at least in the opinion of well informed internationa flnanciers considerable part of Europe obligations to us will be paid by the re. turn of American securities When this is done it would be proper to speak ol the United States as 8 great creditor ma ton, but it is observed that bankers arc not willing now to say that we do stand in that relation to the world, for they have constantly in mind the fact that iron g, GOO 00O. 900 to $500O, 000.00O of European money is invested in American properties
 Almost Sea Change
 Another feature of the situation which has caused good deal of comment with in q few days is the revelation of thu fact that we were unduly or unnecessarily frightened last summer, the fright lasting from six weeks to two months Those who had opportunity to observe the gov ernors of the stock exchange and leadint bankers of New York who entered the offices of J. P. Morgan & Co., so thai they might exchange views respecting thu advisability of closing the stock exchange had good reason to infer that the chie1 argument advanced in favor of shutting the door of the exchange was the appre hension which almost all of these men o influence felt that Europe would immedi ately begin to dump American securities and do it so swiftly and in such amounts as to cause panic and complete demor alization in the money markets of the United States as well as wholesale depre- citation in the price of securities. These men looked to the precedents, not realiz Ing that an entirely different situation had been of a sudden developed. By vol untary action, sort of moratorium was adopted which would. it was believed re. move danger of that kind. Nearly five months passed before the governors opened the doors of the exchange. and the voluntary moratorium ended. only opening 1t half way at first there stil being apprehension that Europe would dump American securities upon us Now it is discovered that it is going to be with a great deal of difficulty that the control of American securities in any large amount Is obtained by England and France, and although there has been constant selling of securities this has been, relatively speaking, in small amounts The great minds in the world of international finance are now occupied with the most difficult as well as the most stupendous problem that has ever been offered for solution.