South Bend news-times. (South Bend, Ind.) 1913-1938, 1916-08-21

tect nor allow. compensation for in
creased costs OF operation. while
railroad labor is free 10 force its
claims upon railroads 20 "a degree
that threatens bankruptcy for the
corporation and unheard-of incon-
venience and damage TO public in
terest one side has responsible
ties and restraints which il cannot
escape; the other has neither and
is disposed TO WELD its power reck-
lessly
Big Loan Important.
The formal announcement of a
loan Of $25O,O0o. 600 20 the United
Kingdom is an important financial
development from two viewpoints.
OF the $500, 100000 or securities
that are 70 constitute the collateral
for this large tranaction, one-third
or approximately 500. 900. re-
presents high-grade American
bonds and investment stocks that
have been accumulated by the Bri-
fish treasury in pursuance OF its
mobilization plan. These securi-
q
from probability Of sale during the
two-year period that the new notes
viii run: they will no longer con-
stitute a threat 10 the general stock
exchange price level The loans
second influence, 10 which reference
has already been made in these
advices, contemplates the favoring
results TO the market that are not
unlikely TO accrue from the efforts
Of the large financial interests who
as underwriters have such a prac-
teal incentive TO make it a success.
The elOrts Of such interests Under
these circumstances are very apt to
by encouraging and promote "A fav-
orable speculative and investment
atmosphere in the general market
for securities.
The remainder OF the $500. OOO.-
600 collateral i'm the new British
issue viii consist in round mum bers
OF 500, 600, 900 Of Canadian govern
ment and Canadian railway bonds,
and an additional 500. 1000 900 will
take the form Of bonds and other
obligations Of Argentina, Chile, Nor
way, Sweden, Switzerland, Denmark
and Holland. Aside from the SINH
lar class of securities contained in
the collateral for the more recent
1OO.O0O,00O French loan. the dis
tribution of bonds of foreign gov
ernments and OF bonds representing
foreign activities. is a new and i'm
portant development for American
investors. 1t is. however. merely a
beginning that means a further ac-
tive broadening of New York as "A
world market for finance. other
loans are 10 be raised in our own
country by the entente allies Their
mum Der and volume will be limited
only by the duration Of the destruc-
tive conflict and by the final volume
Of the supply available Of American
capital. A clear indication Of this
Is contained in the revision of the
British chancellor's mobilization
plan. AS modified, the English
treasury is 10 receive on deposit for
period of five years a new list
embracing securities. S3,OOO.OOO.-
600 in value, the list composing ev-
enty high-grade foreign bonds. in
Guiding among others those that are
TO constitute part OF the collatral
for the new loan that has just been
arranged here. Thus il is obvious
that the British government has
ample collateral readily available TO
seek additional financial accomoda-
tin in America.
Must Look Out.
Henceforward, financially speak
ing, we must look out and not in.
and accustom ourselves to larger
transactions than have hitherto
been the rule. To us the $3.50. OOO.-
600 loan appears to be a matter Of
very considerable Importance, yet
Is small compared with Great Bri-
tian's total borrowings which. since
the war, have reached nearly SIS
600. 600 600 The loan recently
granted in New York would only
pay Britian's war expenses for
about eight days. Instead Of think
ing in millions, we are obliged to
think in billions.
Following the recent rapid rise in
a few shares some reaction resulting
from proft-taking may oc~=r but
the general undertone is coed and
based upon general Industrial pros
perity. which seems quite adequate
10 Offset a poor harvest. The gen
eral results in crop yield. not value.
are expected TO be about 10 per cent
below last year. and vet in spite of
this drawback the railroads are an
ticipating "a car famine owing TO the
tremendous pressure of Industrial
traffic. With big exports ahead, ac-
tive business east of the Mississippi
easy money everywhere and gener-
ally sound business conditions there
Is little to interfere with stock ex-
change activity. The labor situation
Is still regarded as serious. and
much viii depend upon the outcome
Of the presidents efforts to prevent
"a railroad strike