New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-04
Saturday, November 8. 1917.

has assumed monopoly Of the in
yestment markets, TO the practical
exclusion of all other borrowers, so
that corporations and municipalities
are faring thinly at best and starv-
ing at worst. 1t is proper that they
mould do without funds except
where funds are required for war
work. But as things now stand the
borrower who should be literally
supplied and the one who should be
barred from the capital markets are
On the same footing in the sense that
neither can make application for
fresh capital with any assurance
that the response will be satisfac-
tory. Indeed, the chances Of success
fully floating any new corporate is
sue are decidedly discouraging at the
moment and there is not much like
rhood that conditions will improve
az the war goes on. Moreover, the
price which the corporate borrower
must bid for funds is ruincus. for tn
ysstnent money has risen in price
almost If not quite as much q, COM
noditie.. The municipality Is In
rather better favor In this respect,
beeause Il can offer tax exemption
as a special attraction, but even
municipalities can find market for
only a limited amount of new securi-
ties. That is not likely to work great
hardship, but it is different in the
case of corporations in the war
class. Their needs are urgent and
must be supplied without delay. 1t
Is not enough to give them priority
over borrowers engaged in non-es-
sential work, for it is OF little use
10 have first chance to borrow in
market that has almost vanished and
cannot or will not furnish all the
funds required. To give them prior
ity may relieve the situation little.
II will not solve the problem. But
how is the problem to be solved!
There are several possible solutions
and each one should be given care
full consideration by the proper
authorities, and at once The one
most commonly advocated is that
sponsored by Mortimer L. Schin IN
an address before the American
Academy Of Political and Social Sci
epce, when he said;
Az long as governmental offerings
90 limited in amount and issued
only a. in:requent intervals there
m.v be room for the utilization o.
.orre Of the national resources for
other financial requirements, but as
SOM As one government loan fol-
lor. another in quick succession
and for large amounts the financial
exhaustion is apt 70 be such as 70
,,.vent the successful placing OF
other securities. Il may be said
ia. other borrowers can tempt
money out Of The pockets OF the
ueopl. by I'll. sttractiveness OF the
terms they offer, but even II this
+. po,sible IL should not be permit
led in the interest Of the country at
large. The truest democracy lies IN
~. .ubordination Of the individual
% N. common good, and the needs
% the nation must be paramount.
But how, then, are corporation; ana
our political subdivisions 70 hnanee
hose needs, such as refunding ana
absolutely necessary additions, bet
t.rnents and improvements which
are imperative and cannot be post
pon.d. # they are unable or not
permitted 20 sell their own securi-
ties?
I. seems 20 ne that there Is but
en-. logical ansver 70 this question
Th. national Treasury may have 70
provide funds for this purpose. just
a. 1, Is financing the needs % our
allies in this country. Our allies
must have the goods which we and
y. only can supply, and our gov
eminent 10 furnishing them with the
credit with which 70 make payment
rot only because that lie the prinei-
raj contribution which we can make
a. ~. present time 10 the battle
against autocrscy and brutality, but
even more 90 because no such sum
a, they need could be found IN the
;rys,tnent market OF this country
and what could be provided would
,. a. such prohibitive cost as 70
in..rf.r. seriously with the fnsn-
elal stability Of everything else.
III. same holds true OF our own
Internal needs, and IL Is very sp-
parent that heavy taxation and gov
.rnnsnt borrowing has had It's sf-
feet already upon the ability Of
our corporate enterprises 10 raise
money. Look a. the basis upon
shieh prime railroad, industrial
ard public service bonds are SELL
ing. hgpr. the cos. Of recent cor
porsts financing and there can
hardly be any doub. that the END
Is almost a. hand II not already
fsschsf.