The Washington herald., 1917-05-31
HOLLAND LETTER
The Biggest Daily
Financial News Feature
of the Counhy's Best Newspapers.

+, None OF those who are able to form
good Judgment respecting the floating
/ OF the liberty loan OF s2,000OO0 900. now
has any doubt that 1t will be fully sub
scribed, very likely oversubscribed, ana
that 1t will prove to be popular loan.
At one time there was some apprehen-
sion lest the loan be to some extent
ignored by the American people.
Those who are recognized as leaders In
the world Of finance were persuaded
that the loan would be fully subscribed.
confident that the banks and bankers
of the United States would make II
good, whatever the action OF the Amer
lean people might be. ]. p. Morgan,
however, Is quoted by his friends as
having never entertained the slightest
doubt about the willingness of the Amer
lean people to make this popular loan:
that is to say, to accept their fair share
OF the Offering, as soon as they under
stood 1t.
The attitude of the American peopIe
at first toward this loan was Somewhat
similar to that of many of the AmerI-
can bankers toward the first great
financing proposition which was made to
the United States on behalf of Eng
land and France. That involved the es-
tablishment here of a credit Of Sbo0.-
100000. although England and France
were at frst disposed to ask for as
much as a billion. The peculiar fea-
ture Of this proposition, which caused
many of the bankers of the United
States to hesitate about partIcipattnS
1t It's financing. was the desire that the
loan he made upon the basis of the re
sources and credit OF the two nations,
Great Britain and France-thAt IA to saw
without any collateral security. II re-
quired only few words, put clearly and
with characteristic laconIc precision
from j. p. Morgan, to persuade the
bankers that the security was nerfeot
For the resources OF Great Britain and
france We're stupendous, and Mr.. Nor
gan had personal knowledge OF the mag
nitude RI the financial strength Of Great
Britain. and that no matter how long
the war lasted, or how heavy the drain
upon those resources might be, Great
Britain possessed them in abundance
Mr.. BsIfOur's Parting Message.
Later credits established in the UnItes
states were based upon collateral secur-
ny. but that was due chiefly to the be-
het that the operation would be cheaper,
oeth Tor Great Britain and for Franco
II loans were based upon collateral Sc
curity.
The United States government can offer
no other security for the payment of
principle and interest Of the liberty loan
than that which Is based upon its re-
cources and tbs credit The people
who are now beginning to subscribe
many millions TO the liberty loan.
have no question about this security
Their hesitation has been due entirely
TO lack OF experience, a condition of mind
which Is somewhat similar to that which
characterized the American bankers or
many OF them when Mr.. Morgan under
TOOK on behalf Of Great Britain and
France, to furnish a credit of $500 OoO.-
600 to those two nations who acted in
joint capacity at that time
The crops which will be harvested this
summer will indirectly at least furnish
the government with the means by which
IN addition to taxation, the interest upon
the liberty loan can be met and a sub
stantal sinking fund for its uuuida-
ton can he provided. II is observed that
there Is no longer serious apprehension
that the harvest Of this year will be in
adequate for the needs OF the American
peole, to say nothing of necessities OF
the allies. All the indications provided
weather conditions be favorable, are now
regarded as pointing to crops that will be
abundant, except that there may re some
shortage in wheat. Some Of the authori-
ties are now apprehensive lest there be
an overproduction OF food products
Some persons fear that there will be ex-
cessive production of potatoes But the
best judgment Is that II the crops which
are harvested are for the most part of
a kind and quality which will enable
them to be kept over winter, then there
Is no danger of over production.
The Only Security.
The parting message to the American
people, which was delivered by Mr.. Bal
four at the close of the last week was
commonly spoken OF in the financial dis
trict as having been very timely IL
served to increase the confidence that
began to be restored a few days ago
and that is reflected in the action Of
the securities market For what par
ticularly impressed leaders in the
financial district in Mr.. Balfour's mes
sage, was the fact that he took issue
with those who have bean impatient, as
serting that the government and the
people have not yet awakened to the
meaning of the war. and that VIC were
making haste too slowly or not at all.
Instead of that. Mr.. Balfour, who is
known to be thoroughly informed re-
specting our progress in the way Of pre-
paraticn, spoke with satisfaction of II
and apparently with some amazementI
that We have been able to do so much
in five weeks time. If that is his view
then II is believed to be the correct
view. justifying confidence that in due
time order, system, and thorough or
ganization will have been evolved out of
the inevitable chaos which prevailed just
after we Joined the allies in the war with
Germany.
Lending to the Government.
Not only are the people lending money
to the government. taking as evidence of
that debt liberty bonds. but some OF the
financial institutions and the great cor
porations are lending their leaders to the
government, not grudgingly, but willing
ly. An example of this was furnished
yesterday by the action Of the directors
Of the Lincoln National Bank. one of the
large New York banks. Its president,
Charles Elliot Warren. as member Of
the National Guard, was called upon for
duty. Instead of grudgingly granting
him leave of absence, the directors gave
him indefinite leave on full salary, say
ing, as they did so, that they were proud
Of the opportunity in this way to serve
the government in til time OF crisis.
Other financial institutions have gladly
lent their leading executive officers to the
government at this time.
That some of the devices perfected by
highly competent inventors with intent
to match and overmatch the submarines
have merit is made evident by the fact
that these Inventors have had no diff