New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-11-29
REVIEW OF THE
FINANCIAL WEEK
To Introduce Our People
to Investing Funds in
Foreign Fields.
UNITED STATES AS
A WORLD BANKER
COnsols' Low Price Emphasizes
LOndOn's Present Handicap
Railroad Financing.

On the same day that Paul VI. War
burg, Of the Federal Reserve Board,
declared that we were approaching with
rapid stride a position of world bank
ers. there was announced the formation
of a great American corporation 20
bring our people into the field Of for
eign investment, TO which they have as
vet been strange. Strong financial in
terests who appreciate the temporary
nature Of so much Of our present for
eign trade desire to use is profits end
prestige to strengthen the purchasing
power Of other nations. Then these
customers in other lands will be en-
nblcd 20 use to their advantage the sur
Plus goods we wish TO send them.
If we can so apply the gain which
has come to us through the cataclysm
that is overturning SO great part OF
the civilized world, our help IN re-
habilitation will most powerfully work
10 our own good. The immense IN
usual business we ere doing at hign
prices for the warning powers and the
gold that has come to US at time
when through reorganization OF our
banking system our need for gold has
been reduced have natural tendency
TO make ls lavish In unwise and unpro-
ductive fashion of our new resources.
As we resist this temptation and build
up our business on foundation thar
will endure after the war, we shall be
able the better 20 retain the interna-
tional strength thrust upon US.
The new corporation for promoting
our interests abroad is backed by men
who have already, in their several Ines
done great things in our domestic and
foreign affairs. Guided by them we
NAV avoid much of the unwise invest
ment that is so apt to accompany the
first venturing Of a nations capital into
unknown foreign fields. We have nov
the unusual advantage that the great
European powers are DESTROYS Of reaI
ling on the securities that represent
their foreign investments. Such stocks
and bonds have records that make it
possible to apply to their prospects the
test of former experience.
Our Government Must Aid.
How we'll our. individual investors
can accustom themselves to risklng
their savings outside our borders re-
mains to be worked out. II New York
is permanently to take its place be-
side London and Paris as Leading
centre we must develop in months as
they have in years. Persistent efort
NV the German government aided that
nation 10 make a wonderfully quick
expansion of its foreign trade. Our
own authorities must do their part 10
help our growth along international
lines. In the past American enterprises
abroad have lacked adequate protection
by our Federal authorities and have
been ham ered by distrust of large
business projects at home.
The greet financial powers Of Europe,
concentrating their strength on war,
have for me time voluntarily given up
effort to nold their position IN world
finance. Dealings in the London mar
ket last week in consols, no longer pro-
tected by minimum price restrictions
showed TIE strain on British credit.
With the slew war loan a ~ per cent
bills i G fting terms Of the next gov,
eminent Arowing, the drop in the Ola
2i5 per securities even 10 as 10"
as 81 vi be expected.
Natiol war must expect 10 see
for a WI their credit lowered, and
this pre~ war is making all former
expenditures seem Insignificant. when
the conflict broke out consols were sell
ing at 69i9. A few months before the
price had been IS and the recent mini
mum was SO. Consols have not sold so
low as they did last week for nearly
100 years, though it is true they have
only in recent years paid pr instead
+ of 8 per cent. In France the former
war loan is issued at a price that yields
around 5al per cent TO those who pay
+ for the new bonds at once in full.
Sterling exchange, the principal
measure Of the strength of our inter
national position, was held fairly steady
/ last week at around 4.70 in the pound
/ for sight drafts on London. Since so
much of our foreign business IS done
on the basis Of payment in sterling,
/ stability Ct exchange IS necessary TO
remove an undue element of risk from
ordinary business aft II is Of much
more importance TO have the move
ments Of sterling kept within narrow
limits than TO raise il nearer to metallic
parity Of 1866 for the sake OF help
ing maintain London's prestige.
Sterling at Discount Elsewhere.
II is true that financing trade with
this country is a great problem for
British authorities, but the other neu-
trail nations also find that claims pay
able in London cannot be sold at any
where near the customary price. re-
cent con pilation in London showed
sterling ST. a discount OF 2 per cent in
Switzerland, about . in scandinavian
cities and in Holland.
Formal announcement MADE IN Parlia-
ment las week that American securi-
tics were being obtained by the gov
eminent .howed one step being taken
Inv Britis. authorities toward meeting
nsvr,ents here. Gold comes 90 us
steadil. ~ the mail ships arrive from
~ 9n- Public opinion, Of course,
rbecfT a. thing Ike tree movement
az gold. f1t still the Chancellor Of the
Excheou, as able 10 say, as he dld last
week. tina paper currency issued Dy the
british gostrnment is eXchangeable az
the Bank Of England for gold. Guarded
intinations in cable dispatches sug-
gest that London will make freer use
Of the gold supplies OF her A hes,
which as yet have scarcely oeeh
touched.
The outpouring Of goods from this
arfsns