The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1916-08-22
Domestic Industry at High
est Level and Expected to
Continue Several Years
DANGER OF OVER
INITIATION is PASSED
All Brancehs of Industries Are Show
ing Unprecedented Earnings and
Railroads Are Sharing in
General Prosperity
By HOLLAND

BY HOLLAND
New York, August 21.-(Special.) -Abou
Especial. about IL months age
Henry p. Dawson Of j. P. Morgan & Co
and Frank A. vanderlip, president of the
National City bank, predicted the advent
of unusually great prosperity in the
United States provided certain contingen-
cies were satisfactorily met Neither OF
these authorities went so far as to fix q
date for the revival of domestic prosper
ity. Both were of the opinion that it
would not be made evident until at least
IL months had passed.
Mr.. Dawson at the time he ventured
this prediction, intimated that the only
danger that might Turk in the situation
was initiation and Misrepresentation. That,
also, was the monition given by Mr..
Vanderlip in one of his addresses.
Today both of these authorities, each
in his own way, Is so acting as to make
it unnecessary to say that the era of do
nestle prosperity is now here. Mr.. Davi-
son was the spokesman who announced
the terms upon which the new loan made
by Great Britain in the United States
was negotiated. That loan of itself will
greatly stimulate domestic industry
through the payment to American farm
ers and manufacturers of commodities
bought in the United States by England.
Mr. Vanderlip has made it event that
he believes prosperity is at hand because
he is establishing branch banking insti-
buttons in other parts of the world.
These, it is known, will greatly facili-
tate domestic industry and not by any
stimulus occasioned by war orders.
All of the authorities in the financial
district are now convinced that domestic
industry Is at a high level, perhaps the
highest ever known, and that 1T will con-
tinue for several years. This feature OF
this prosperity which is spoken of with
qualification is discovered in the fact that
while from one point of view it reflects
initiation, nevertheless it is not the kind OF
initiation which causes apprehension Tor
it is occasioned by so-called legitimate
business demands.
The orders which all of the steel indus
tries of the United States are now receiv-
ing represent initiation in the sense that
these orders are so large as to entail SUD-
stantially the capacity of the various
steel industries. Europe has placed IN
the United States since July l orders for
SbSSSANAAo $500 -
estimate, 100000 tons. Domestic indus
tries have also been putting in large Or
ders, since these need steel in order to
execute contracts which they have ac-
copied. In fact, so heavy have been the
demands, both domestic and foreign, that
some of the corporations have been COM
PEELED to decline further orders since they
have not the capacity for any further
manufacturing until some months have
passed.
THE NATIONS EARNINGS
The public at large has little apprecia-
ton of the magnitude of the earnings
which American industries are now gain
ing. 1t is however, known that the rail-
road companies of the United States are
making unprecedented earnings. Almost
all of these railroad corporations will
utilize their surplus earnings in improve
n:ent of property. The New Haven Rail
road company has been earning a. an
rate, and these gains have
come very OPPORTUNITY, since the COM
pany needs millions in order to make i'm
provements
one comment which the new British
loan has caused is based upon the belief
that Great Britain does not expect that
the European war will end until at least
q year and possibly two years have pass
ed This assumption, however, may be
not clearly proving that Great
Britain expects the war to continue for
two years longer or for the life of the
notes Great Britain has given as evil
dences of the loans she has obtained in
the United States of two hundred and
fifty million dollars.
A year ago, one of the leading inter-
national financiers, when speaking of the
resources of Great Britain, said that
probably for a year the English finan-
ciers would exclusively utilize American
securities as the basis for their financial
But if the war were to
continue longer, he thought it inevitable
that Great Britain would utilize other Sc
curities representing loans made by Brit
ISL investors to other nations or to pub
lie works in other nations. That predic-
ton has been justified. In Mr.. David
sons statement, which set forth some of
the details of the latest of the British
leans, reference was made to the securi-
ties which Great Britain will deposit
with trust institution of New York for
the purpose of protecting the loan.
two hundred millions out Of
the total amount Of three hundred MIL
liens are to be the securities not of the
United States which British investors
have held. What proportionate part each
OF these national securities bears to the
known. But it will be discovered that
Great Britain has reached almost to the
uttermost parts of the earth in order to
provide collateral security upon which
this loan is based.
q However the gross amount of three
hundred millions is only a very small
part of the aggregate of
foreign securities which are held in Great
Britain. Mr.. Davidson said a year ago
that the capital wealth of Great Britain
by securities was so great as
to stagger his imagination, although he
is familiar with large figures.
GOLD TO MEET LOAN
II is spoken of as curious feature of
this piece of international financing that
the managers of the syndicate which has
the loan, ]. P. Morgan G.
Co. have received in almost exactly
three months nearly two hundred and
twenty -four millions in gold. most of it
from Great Britain. On the very day
that the new loan was announced by Mr.
Davidson, ]. P. Morgan & Co. received
from London nearly ten millions in gold.
The total gold consigned to his firm
since May ~ is almost large enough in
amount to provide the means by which
the two-hundred and fifty million dollar
loan would pass to the credit Of Great
Britain. Indirectly these great consign-