The Birmingham age-herald., 1917-07-20

that compared with the big features | which British authorities permitted hinb confidentially to read. They satisfieo Mir. Davson that not by reason of anyl
 financial weakness could Evsgiers5.be de- l feated in the war. MT. Morrow was in-
 clined to think that as England and
 France, from time to time approached
 the United States seeking new advances of cash or its equivalent credit, they
 would back their promises to pay with
 collateral security which as a whole rep-
 resented their loans before the European
 war to other nations and also to some
 of the peoples of the earth who vera
 seeking to build railroads, develop mines
 or exploit various resources. But what- l ever the security as a. whole might be, | MT. Morrow was persuaded that there
 would be infused into each block of I bonds large sprinkling of American
 securities.
 | Some months later there came offi- !, cial information which disclosed the name and amount of certain American securities which Great Britain had taken over either by borrowing from her in- vesting citizen or by some other con- venient form of trusteeship. Apparently Great Britain has exhausted, although perhaps not completely, her resources of this kind The man of high financial au- thority who read musngly and very l thoughtfully MT. Hepburn's statement | was at last persuaded that if the great bulk of American securities heretofore held abroad are now, as MT. Hepburn said, absorbed by the United States, no small part of this absorption is repre- sented by collateral security for Ameri-,
 can advances of credit or cash. Great Britain and France have tho right to exchange collateral security that is to say. they may substitute other approved securities for American se-
 curities, but if this should be done will these countries sell these securities to the United States or will the owners from whom Great Britain borrowed them sell them here? The presumption is that before the war ends almost all of these American securities will have been pur- chased by American capitalists or inves- tors. If that be done the United Sites
 will all the more easily maintain the AK eminent position which we of sudden | and unexpectedly have secured.
 some Of those who should know where's
 of they speak say that a very large amount of the common stock of the United States Steel corporation is now
 carried by brokers for their clients and
 of course upon margins. It would be or interest to know how much of the com-y
 mo-. of this corporation, if any,N
 now constitutes part us. tkses collateT1ss
 security put up by Great Britain as q
 basis for loans obtained in the United
 States.
 The fact that there were some quo-
 tations for the bonds of the liberty loan
 a few days ago at a point slightly be-
 low par is spoken of in the financial dis-
 trict as no reflection upon the credit of
 the United States. Nor is it likely that any of these transactions represent so-
 called short selling-that Is to say, specu-
 latfve transactions. Presumably t&ney were all actual sales. If the new loan
 should be issued at the rate of 4 per cont interest the liberty loan bonds would not
 be likely to sell below par, but probably at premium. In any event, transac- tions of this kind do not affect the credit
 of the United States.