The Birmingham age-herald., 1917-05-06

ing that our war financing sounds very much worse than it really Is. as far as the financial position or credit or our country is concerned. According to the official figures just compiled this country now has a gold supply of sS,- 0SS, ,0O0, 900. That gold, which. under our new banking law. can be used as the basis for $1S,00O, ,000. 900 bank loans, is over half of the worlds total supply of the yellow metal. Gold forms the basis of all credit.
 At the present time the gold supply of Germany is 2 per cent below normal |; Italy, per cent; Russia. 14 per cent; Great Britain, 35 per cent; Austria, 49 per cent Turkey. 50 per cent. On the contrary, the gold supply of the United States is 49 per cent above normal
 But the wealth of the United States is not measured by it's gold holdings alone. According to the fastest avail able figures. the national wealth of Italy is given at $3s s,000.G00 900, Russia at S60. 900, ,00O, 900: France, s65,000, ,OO0,- 900: Germany, $SO.000, 100000; England, $9O. 900, 000, 900. Our present wealth can be conservatfvely stated at S22700o,- 100000.
 That figure, s227, ,ooo oOO,Ooo, com pares with England's wealth of S90,- 00O. GOO. 900 against which there Is now
 
 900, ,000, 900.
 Certainly. by contrast our national debt of SS,00O, 100000 looks small. But the facts are, our national debt is not going to be increased by $7,000, 100000 Of the s7, 900 900, GOO war loan author ized by Congress, s5.o00.0o0, 900 will De in long-t term bonds and S2,000,0Oo,V ,V0o in short-term notes, which will De paid off from war tax collections That tue ha 000 0(10 lon sy-fn bonds and of that sum $3,000 00o,o eco will be loaned to the allies.
 Thus a summary shows that with bonded debt of only s1,023,000,00 against England's $19.00e, 100000; with gold holdings of $3,0SS, 900 over half of the whole worlds gold supply, which can be used as the basis or $lS.- 0O0, 900, 900 bank loan expansions; and with our national wealth at $22T,000, : GOO .O0o. against $90. 900 100000 for Eng land. the next richest country In the world, our country proposes to in crease it's actXal indebtedness by $2,- OOo, 900 ,00O When 1t is added that the money to be loaned to the allies. as well as that to be raised for our own war needs, is to be spent in this coun- try, all real cause for apprehension disappears.
 England brought out her last war loan, 3D,UUO,UuV.UUV III T cDi uai NY 'tAO end of this month, May. all of the pub lie subscriptions will be paid for in full If England. after nearly three years of debt increasing. now can do that certainly this country will ex- perience no difficulty in adjusting it. self to the forthcoming note and bond issues.
 As for the bond market effect of the government financing, that adjustment fl,h day diplomatic relations with Ger many were severed. This week there
 was marked evidence that the prior lien railway issues. the first always to show any change, had at least reached bottom and had again turned upward
 Opposed at first to the low interest rate of 31a per cent fixed for the gov,
 ernment bonds. Wall street is gradual ly coming around to the belief that Secretary McAdoos judgment on that point was good. In commenting this
 week on that phase of the subject ths | National City bank says:
 "Although the interest rate of 3 A per cent will seem low to many peo- l pie, it is a return free of taxation i and if it was higher it would serious l ly affect the capital value of other sc curities, and perhaps disturb savings l banks deposits, II IS not ueSlraple tlld l people shall attempt to shift other in | vestments on a large scale. as such 2 l course would unsettle values withou1
 making more capital available.' | From the stock market point or view, many shrewd observers reached i the conclusion this week that the l stocks and bonds market read1ustment l had been completed, and that it was about time to begin discounting thu | huge expenditures to be made in thi:
 country by our government and the allies Beyond question there Is . | large short interest in the stock mar l ket, But many bears are not sleeping well O nights through fear that the l short interest is too large for comfol If peace should come overnight ol l course there would he another com plete readjustment of security values 1 Despite the encouraging cables from Berlin, however. it must be admitted l that nothing has been said by either | the British or French commissioners | to indicate that peace was anywhere within sight. R. l.. B. |