The Birmingham age-herald., 1915-12-02
UNITED STATESHAS ABSORBED A GREAT MASS 0F SECURITIES English Wealth in Form of Billions Held in Foreign
 Securities WARBURG'S FIGURES PROVE OF INTEREST Believes It of Great Interest to Get Suitable Accumulation of Gold
 to Meet Our Future
 Developments
By HOLLAND


 estimate which has often been made of late fixes the amount of American securi- ties heretofore held by investors who are citizens of other lands which will have been absorbed by the United States by January 1 at somewhat in excess of l q, ,eo0, ,Oo0000, the estimate being based upon tho par value of the securities. Inquiry among those in the financial district who should have some information upon the | matter shows that this is not regarded as 1 an excessive estimate.
 1 At the close of President Mckinley S I first administration and at a time when we were receiving from Europe about i $i50, coo in gold in few weeks, the re- port was widely circulated and commonly believed that we had at that time ab- s,.rbed about s100, ,00OO0o par value of se- clrities that had been held abroad for in vestment
 Those who arc competent to speak say that the best that can be done at this time is to guess at the amount of securi- ties We have absorbed But no one doubts that in the phenomenal move ments of international finance and trade W HlSii ldfc DcCA III pTOSTtSS IOT Iu months very large amount of American securities has changed hands and passed into the possession of citizens of the United States or institutions of this coun- try.
 Tn the spring one of those who is in close association with the vast market of which the house of J. F. Morgan & Co. is the agent for Great Britain and France in the United States was of the opinion that before the war ended it might be found convenient by Great Britain to utilize some portion of the fonds held by her citizens and nstitu- tions for securing a loan or to serve as a basis of credit
 But" he said there should be a large mixture of American stocks and bonds in any bundle of collateral securi- ties' He was of the opinion that if the war continued for the length of time Lcrd Kitchener deems probable we will have taken over much the greater part of American securities held abroad for investment.
 In the fall and winter of last year sev- cra1 estimates were made public whic l purported to fix the aggregate amount of | indebtedness owed by American railroad lsaId industilai opg anizatiens abroad. Some of them put the figure as high as $6,000,- . 0G00, some estimated the amount at about $4,000, ,000, 900. Whatever the amount was, it was necessary that these securi- ties be absorbed by the United States if we are to become in fact a creditor nation in the sense that Great Britain before the war was the worlds chief CT editor nation. So rapid and prodigious have been the movements of commerce and finance that it is spoken of as not a matter for astonishment that we should have already absorbed Sl,000,G00O0O and are likely to be in position to absorb much the greater part of these securi- ties.
 One of the leading authorities not only in practical international financing, but also on the theoretical side, sta ted in the spring that England had still literally thousands of millions invested in the se- curities of other countries. Her citizens
 and her banks and other institutions have invested very large sums in the bonds is-
 sued by some of her colonial posses sions. England advanced $000, ,0oG, ,000 ap- proximately, to one of her colonies to use for the construction of a state system of railroads. The security for this loan was bonds which were mortgage lien Upon the railroads. These bonds are still held in England. This was referred to 1 as an example of the possessions of Great Britain in negotiable securities. A rather offhand estimate was made by this authority of the aggregate wealth of England. He thought that ehs might possibly be as much as $150, 600 000, GOO. His was an overestimate, since the chancel- Tor of the exechequer now estimates the wealth of Great Britain at about $130, 0O0,-
 000 GOO. The best authorities in the United States estimates the wealth of Great Brit ain at about $130, 900 0O0,000 The best au- thorites in the United States estimate, rather roughly it is true that that ag- gregate wealth of the United States is ap- proximately $200, 0,000,000, GOO.
 The address delivered by Paul Warburg of the federal reserve board in North Ce rolina few days ago suggests that he was well informed upon matters apper- taining to the nationtl wealth of England and her annual income as well as the like figures which tell of the financial strength of the United States.
 MT. Warburg was informed, partially at least, upon these matters before he re- signed from places which gave large emoluments to him to take position upon the federal reserve board at small sal ary. In the address he asserts that the largest imitation of circulation and credit which the old world has ever had has taken place there since the war began And this will make it all the more neces-
 
 ended to make desperate attempts to get gold in large amounts as a basis, safe and sure. for such credit as these na- tons will need in recuperating. Some of ttese attempts will reach for American gold. Nevertheless, the United States, in his opinicn, must continue to accumu- late gold in large amounts. The federal reserve banks now have $30O. 000O0 in gold and this is not held in proportionate parts by independent banks, but chiefly by the banks of the federal reserve sys- tenn. Therefore it can be utilized to sus- tain credit.
 MT. Warburg asserts that our credit structure today represents about $18500,- COG and this, he says. is of staggering size But it is apparent to him that after the war is ended the United States will be called upon to aid in the financ- ing of other countries. That we have the means for increasing the currency through the utilization of commercial paper, Mir. Warburg admits but he is in sistent upon the point that. after all, our safety, especially when times of great commercial and industrial expansion are with us depends upon an adequate supply of gold. This statement is interpreted by men of finance in this city as mean ing that so far as it is within its power the federal reserve system will attempt to increase our store of gold, believing meet the demands for credit which tho great prosperity now beginning will make. Yet it is also said that the wealth of Great Britain and the wealth of tho
 United States, widely conserved and utii-
 ized, should be sufficient to meet any ex-
 agencies which may be occasioned by the war in Europe and the upbuilding which