New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-12-25


tious 10 the war this is lamentably
true. In the beginning It was the
opinion Of the State Department that
to buy war loans from the belllger-
cnts would be unneutral. wall
Street was so notified. That was
inconsistent, Of course, with a spirit
OF pure neutrality in trade. Neutral
traders ought to sell TO all corners
alike. and il the buyers have to Dor
row. or buy on credit, then credit
ought TO be extended TO all impair
TALLY. so long a. they arc equally
solvent. Nevertheless. it was the
opinion Of the State Department that
10 float war loans in the United
States would be politically unneutral'
and The first coincidence IS that the
political idea Of neutrality did not
approach the financial idea OF the
same thing until everybody began to
see that in order to accept the enor-
nous and extremely lucrative trade
that was offering in war merchan-
disc we should have to buy the loans
Of the belligerents. 1t happened that
only one set Of belligerents could buy
war merchandise; therefore, only
one set Of belligerents offered to sell
war loans in this country. The first
was the S5OO,OOO,OOO unsecured
Anglo-French loan, the placing Of
which was accompanied by a trade
propaganda. If we wished to sell
we should have to lend. That was
the theme. As other loans followed
we asked for security. Then both
England and France attached TO
their notes high grade stocks and
bonds I'D 10 100 per cent OF the
amount borrowed. like Stock Ex-
change borrowers pawning collateral
at a bank. Even so. they could not
nav fast enough. so they began to
send US gold and also to return to
US American shares and bonds which
they had bought many years before
for investment. Filling the demand
for war goods caused prices to rise,
then wages to rise, then prices to
rise again; the addition Of billion
dollars of gold to our money stock
and the bank credit created thereon
caused prices to rise still more, until
at length we found ourselves ap-
preaching rapidly the economic ex-
perience of country actually at
war. BY d singularly perverse coin
cidence it was not until our war
trade prosperity began to hurt, not
until the profits began to be eaten
Up by the rising cost Of doing busi-
ness. that the dangers of imitation
and of locking up the liquid re-
sources of the banks in the loans Of
belligerents we're clearly perceived.
Then for the first time the Federal
Reserve Board recommended caution
I'm a manner to remind the public OF
the risks entailed upon the material
interests of this country. The attitude
Of the board was sound; the warning
was fully justified. 1t is the coincl-
dence we are talking about. And now,
while the commercial and financial
authorities are discussing the
hazards Of the war trade and while
the controversy over restricting
credits TO our war customers is still
warm, the government turns sud
denly pacifst in hard earnest. re
minds the belligerents that they do
not know for sure what they are
fighting about, recommends to them
the uses of peace and speaks Of the
fact that the economic condition OF
neutrals is becoming almost unen-
durable. The chain Of coincidence is
complete. We present to Europe the
aspect Of people sympathetically
willing TO finance the war trade so
long as it pays, but quick TO forget
their phrases about the cause OF
democracy being at stake 50 soon as
their economic comfort begins to be
seriously touched. No wonder there
is a tone or bitterness in comment
on the other SIDE. The London cor
respondent of The Neto York Even
inc Post writes:
As Lombard Street sees It. the NJ
innate effect Of Mr. Wilson's message
isss We: impossible TO foresee.
Had the Allies methods Of finance
b.eun unsound. or had they failed 10
produce gold sufficient to meet all re-
cuirements. some excuse might have
been found on financial grounds. But
acceptance OF all war orders, with
consequent American prosperity. fol-
lowed az the Arst sign of strain by
what might almost be described as
blow. FIRST ct the international
credit situation and then al the hu-
name purposes FOR which the Allies
are fghting. iinpresses us "a very
remarkable occurrence.
We know better. We arc misrep-
resented by appearances. There is
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