The Washington herald., 1917-10-16
BANKERS WORD
STEADIES LOAN
Holland Says Morgan and
Vanderlip Have Aided
Nation.

J. p. Morgan's brief statement TO
the liberty loan committee ana
Frank A vanderlip's words Of
monftion and also encouragement
which a considerable company Of
bankers and so-called captains Of
Industry heard. were the two most
important communications intended
for the public that were made in
the closing days Of last week. Both
of these communications were made
upon the same day. They have oc-
casioned q great deal Of comment,
and in the case OF Mr.. Vanderlip's
warning. perhaps little perplex-
ity.
Mr.. Morgan so seldom speaks for
the public ear that he Is frequently
spoken of as exemplifying in his
own business career the policy
adopted by his father. The senior
Morgan rarely spoke unless there
were emergencies that justified the
saying of few words by him, and
he never made any utterance that
could not be comprised in a brief
paragraph.
The present head of the firm OF
J. p. Morgan & Co. felt justified at
the time the Anglo-French loan Of
s500.000,0 900 was under consideration
in saying a few words which were
directly solely to the hearing of
bankers OF the United States. For
the banks were expected so to CO.
operate and. within the limits of
this great loan, so to coordinate
that IL would be possible for them
to underwrite IL. although 1t was
the largest loan at that time ever
contemplated by the Federal gov
eminent or by American bankers,
and although there was no security
behind it except the resources and
good faith OF France and England.
Cause of Hesitation.
There seemed to be. for time, a
little hesitation on the part of ban1-
e.s due partially to the fact that
there was no collateral security be-
hind the loan and partially to the
fact that American bankers, as a
whole. were unfamiliar with a prop
osition OF that kind. They have learn
ed very much since that time. Nj.
Morgan. in q few words, stated 70
the bankers that in his opinion the
loan was not only an expedienf one
for the United States to make, but
was also absolutely safe. The primal
pal and interest would be paid ac-
eording to the terms. for the stipend
Gus resources of Great Britain ard
France were pledged by the faith and
word Of those two nations to meet
the obligations as they became due.
That brief statement by Mr.. Morgan
was sufficient. The American bankers
underworld this first of the great loans
and paved the way for that larger at
titude toward foreign loans which Con
sress and the Federal government
have assumed.
MorKan's Confidence.
That there was last week some anx-
iety lest the new offering Of liberty
bonds should not be subscribed in full
within the time limit, was probably
the reason why Mr.. Morgan thought
it an opportune moment to express
his opinion in respect to this loan, to
the liberty loan committee. In fact,
he stated that there was some feeling
Of pessimism, caused by the declining
securities market. He was sure that
this feeling was not justified, no mat
ter what the course of the securities
market may be. The quotations for
securities. depreciating as they seem
to be from day to day. nevertheless
should be without any influence so
far as subscriptions to the second lib
erty loan is concerned. Mr.. Morgan
declared that the loan is to be a sue
cess, although to attain the full sub
scriptions much hard work remains
TO be done. One sentence in his state
Tnent sounds exactly as though 1t was
his father who had made Il, for Mr.
Morgan said that What the security
market does within the next month or
two will be Of small Importance n
year from now,' whereas, on the other
hand, whether the war Is won or
lost Is a matter Of supreme impor-
lance"
Il was said by a member Of the
liberty loan committee that no work,
however. great, which is done by any
individual member Of the New York
liberty loan committee or any other
committee will be so influential in per-
suading the great body Of the Amer
lean people to subscribe, most OF them
in small individual amounts. to the
second liberty loan as will be these
few words which Mr.. Morgan spoke
to the bankers and others who are
members Of the liberty loan committee.
yanderlip's Warning.
Upon several occasions in the past
Frank s. vanderlip has felt justified
in sounding note of warning in the
hope that the bankers. leadt s of in
dustry and the American public might
head 1t. His first important message
OF this kind was delivered at a meet
ing in Wilmington. Del. When he
then spoke there seemed to be evil
dence that prosperity was permanent
and no one excepting a few experts
discovered any symptoms Of financial
or business trouble. Mr.. Vanderlip,
however. strongly advised every one
who was engaged in business or in
dustry and especially the banks, i'm
mediately to begin to trim sails, to
conserve their interests and to look
cautiously into the future. His mont
ton was justified by events which &C.
Cured a few months later.
Now, coming from Washington
where he has been in Intimate touch
with the government and especially
the Treasury Department. he made
certain detailed statements which
supplemented. from one point of view,
the brief statement made by Mr.. Nor
gan at almost the very moment Mr..
vanderlip was speaking. He asserted
that within a short time after the
Second Liberty Loan Is foated. an
other offer must be made and then an
other and so on until by June the
Treasury Department will have float
cd $4,000, 900 in bonds. Mr.. Wander
lip almost echoes the words spoken by
Mr.. Morgan for he says that he be-
lievesL confidently that as great an