The Washington herald., 1917-08-09
HOLLAND LETTER
The Biggest Daily
Financial News Feature Il
The Couatry's Best Newspaper,

VI GIL al iiiiollCC WOuiQ 90 W6ll 10 00Y
no heed to the reports that come
from Germany or Austria, but IN
stead should closely scrutinize the
course Of the securities market. Not
yet has the securities market or the
money market revealed the slightest
indication of disposition to discount
the coming OF peace, and yet In the
opinion Of this veteran observer, II
the reasons were fairly good for ex-
peeting an early cessation of hostili-
ties. this would be reflected In tho
action of the securities market. That
market rarely. II ever, fails to dis
count the future.
In the early summer of 1914 the Sc
curities market did discount the prob
ability Of war before the summer
ended. It acted upon Information
brought to II by men of finance or Of
large industries who In the early
summer visited Europe. It also re-
sponded to confidential communica-
tions which were received from the
great banking or financial authorities
Of France. For It was In France
rather than in England that the frst
apprehension of the outbreak of the
war was felt.
Percival Farquhar was perhaps the
first to discover in the disposition of
French bankers apprehension lest
war should come before the end of
the summer. He had been able to
obtain large loans in France with
which to porynote certain important
propositions he had under way in
South America. But when in the
late spring or early summer of 1914
he again approached the French
- ovalr L..
they were of no disposition to ad-
vance funds, being apprehensive that
war clouds were gathering and that
France might be involved in war
within few weeks.
So, too, Newman Erb when In
France in the early summer of 1914,
seeking funds with which to carry on
his large railroad undertakings in the
West, was amazed to learn that the
French bankers were no longer lend
ing any money, being apprehensive
that war was probable, IL not in
evitable, within a few weeks. Conf
Dental communications received from
France were sufficient In addition
to the experience of Mr.. Erb, Mr..
Farquhar and others, to justify the
securities market in taking such action
as could be interpreted only as dis
counting the coming of the war in
Europe.
If in the course OF the next three or
four months it be observed that the
securities market is changing from a
condition of stagnation or quiet to
activity and especially IL 1t be OBJ
served that railroad securities are
commanding higher prices, then in the
opinion OF the observer above referred
10, 1t may be reasonably assumed that
the securities market is beginning to
discount the coming of peace. OIL
course peace may come very sudden
ly in case Germany backs down COM
pletely and meets fairly the demand
or the allies for such guarantee of
permanent peace as will be regarded
as certain IL any human affairs can be.
Presumably the Secretary of the
Treasury has found himself in full ac-
cord with managers of the reserve
banks of the United States, especially
of those banks situated in the great
agricultural districts, respecting the
expedient time for taking subscrip-
tions to the contemplated second
loan. That it is known will be for
three billion dollars. Reserve bank
managers have for some time made
informal suggestions that the second
loan b placed upon the market in the
late autumn, for at that time the
farmers will be receiving the money
for their crops and the presumption
is that they will receive this year a
larger amount by many millions than
was ever before paid to them for
their harvests.
The first liberty loan was in the
market at the time the farmers
were planting or just beginning to
cultivate their crops and the won
der is that SO many of them SUBJ
scribed to the loan.
In addition, the government is to
have the advantage consequent upon
the experience which the float
ing of the first liberty loan made
possible. The farmers have a better
understanding not ony of the mean
ing of the oan, but of its advantages
as an investment than they had in
the spring of this year. The organi-
zation which will aid the govern
ment in making a market for the
loan will be highly perfected. The
solicitors who go forth to sell the
bonds will be better qualified than
they were in June of this year for
that work and they will have need |
of less pleading or arguing than |
was the case when the first liberty |
loan was marketed.
The impression commonly held is |
that the second loan will be more |
easily marketed than was the first |
whether the rate of interest be fix |
ed at 1-2 per cent or a 4 per cent. |
There seems to be less anxiety in |
the financial district respecting con-
ditions in Russia than prevails among |
military men or among some of the |
statesmen. Russian credit remains |
fairly good and those who have made |
advances to Russia have little or no
apprehension about the payment OF |
principal or interest. Moreover, Rus
sia is having no difficulty in making
heavy purchases in the United States,
especially railroad equipment and
there was no hesitation among the
shoe manufacturers about accepting an
order from Russia a day or two ago
for 100000 pairs of shoes.
A day or two ago a statement was
prepared at Washington with intent |
to show the amount which the Ameri- |
can banks subscribed for themselves /
and their customers to the $1,000. 900, 900
liberty loan. 1t was much greater
than half the entire amount and 1t /
suggests the manner in which the
American banks have met since the
beginning of the war every appeal
that has been made to them to assist |
in great financing. Although this as
sistance reckoned in dollars amounts
to billions, nevertheless the banking
resources Of the country have so
greatly increased sthat it was possible
for the Comptroller of the Currency,
John Skelton Williams, to report on
the third anniversary of the European
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0PHELIA'S SLATE.
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