The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1917-07-23
HOLLAND LETTER
+. The Biggest Daily
Financial Nsws Feature Of
the Counhy's Best Newspapers.

No other inference can reasonably
be drawn from the recent meeting
Of the Governors OF Federal Reserve
Banks and others VINO aided IN sell
lnE the Liberty Loan bonds than that
they sathered in this city in the mid
ole OF last week with fairly good
information respecting the genera;
purpose Of the Secretary OF the Treas
ury, Mr.. McAdoo. in relation to the
next loan. -he reasons are excellent
for anferring that Mr.. McAdoo has
been either directly or Indirectly IN
Informal conferences with some OF the
men upon whom he must rely IL he f.
s[ecessfully to sell the bonds Of the
second loan. II he was in conference
nth them he must have intimated 10
them that he you'd be glad to know
what their views are respecting that
."an. As. for inFtance. he may have
asked the bankers to suggest to him
whether in their opinion the next loan
should be for thee billions or for
two billions. and. Furthermore, wheth.
er the rate OF interest should be fixed
at per cent or 31-2 per cent. He
may have asked them II in their view
the best ttme to offer the loan would
be in the late autumn after the farm.
ers have received the money for their
crops.
Whatever may have been the rela-
lion OF the secretary with respect to
ne forthcoming loan maintained by
him with the men upon whom he must
rely for selling the bonds. these con.
ferences. IL they may he so desiRnat-
ed. have been in the nature of con-
ndential exchange of views.
Very likely Secretary McAdoo took
heed OF the example OF some OF his
predecessors when important financing
by the government was under consid-
GRAFTON. When Gen. Grant was Presi-
dent he was much concerned over the
contemplated legislation by Congress
which the Ablest bankers said would,
II adopted. lead to dangerous imitation,
and an overwhelming issue Of ire
deemabie paper money. President
Grant. therefore, came to New York
ana met, in conference at the Union
League Club, almost all Of the men
who were influential and Of authori-
tative experience in the banking world
at that time. He asked many ques-
lions and obtained the answers which
he sought. But not by any word OF
his own or even by any expression OF
his countenance did he suggest to
those who were with him at that time
what his own opinion was. They dis
covered afterwards what that opinion
was when he formulated Il in the form
of veto Of the so-called imitation bill
Some Of them were convinced that this
opinion was based upon some Of the
answers 20 the questions President
Grant put.
Many tiiNes Salmon p. Chase, when
Secretary OF the Treasury. was in
conference with leading bankers seek
ing to obtain their views and intimat-
Ing In a general way why ne was anx-
ious 10 obtain these views upon i'm
portant government financing, but he
was not accustomed TO impart de-
tailed information until he had made
up his mind what he would DO. That
also was the custom of John Sherman
when he was Secretary Of the Treas
ury. And after he returned to the
United States Senate he confessed
that these conferences were of the
utmost value to him. although at them
he sought information instead Of CIV
ing it
So also Secretary McAdoo may have
obtained valuable information, espe-
cially from governors Of Federal re-
serve banks, without imparting to
them any view excepting the single
one that 1t is inevitable that he ofIer
new loan some time in the au-
tumn.
The governors OF a number Of the
Federal reserve banks and others who
Of Nn l.,
liberty bonds are presumed to have in
general way outlined a plan for
such perfect organization as will ma Ike
ii far more easy to sell the bonds OF
the second loan than was the case
when the first loan was being offered
to the people by hundreds and even
thousands OF voluntary solicitors. Yet
these bankers and the men Of finance
who are possessed OF capital but who
are not bankers must have realized
as they took part in this discussion
the other day that there are some
situation. some of which must be
eliminated If the new loan is to be
speedily marketed. One Of the re-
suits OF these factors is to be seen in
the comparative stagnation in the Sc
the depreciation of market quotations
for the stocks of great steel indus
tries.
Business men and bankers are all in
the air respecting the effect of the
war tax legislation when that is
adopted, and the effect of price fixing
methods when established by the
President through his subordinates.
Nobody can tell what effect the sur
tax upon excess profits may be. 1t
may amount to so much as materially
to affect incomes. and II this should
prove to be the ca Sc the government
would find when the next income tax
10 paid that there is a considerable
falling of as compared with the great
receipts that fioated into the tax col
lector's Office in June on account of
incomes. Should the government i'm
pose very heavy excess profit taxes
upon the American corporations that
have been earning great profits il
would nevertheless be compelled TO