New-York tribune., 1918-12-12

The plan laid before the Invest
ment Bankers Association yester-
day for the creation of an organlza-
tion to facilitate the hotation Of
foreign securities in this market is
well conceived, and it is to be hoped
that no time will be lost in working
out the details and putting it into
effect. The trade balance with Eu-
rope is at present running in this
country's favor at the rate of
nearly $500, 100000 month, and
while it is practically certain that
this must soon be materially reduced,
it is equally sure that the value of
the excess of exports will remain
far larger than it was before the
war. Perhaps it will average, as
Mr. Lamont estimates in his report,
$1,000,000,000, for some years, but
the chances are that it will be even
heavier than that in the next lus-
trum. Taking into account interest
on the moneys we have loaned to
Europe, the total balance to be set
tied each year will reach $780,
100000, or 100000, 1000. Obvi-
ously, that is more than can be paid
in gold, which we would not take
even if it were available, and the
bulk Of it must, therefore, be liqui-
dated through the fotation of the
securities Of the debtor countries in
this market.
Temporarily, the difficulty may be
bridged by direct loans from the
American government to the gov
ernments with which we are now as
sociated in the war, as has been the
case since the United States became
combatant: but such assistance
can hardly be continued indefinitely,
and eventually the debtors must
|, make their appeals for funds
through our investment markets.
Meanwhile, vast educational cam
paign must be launched-the mar
ket must be created in advance or
the attempt to obtain the necessary
funds here will fail. In any event
such a campaign must be under
taken sooner or later if the educa-
tional work of the Liberty Loan
campaigns is to be saved.
In this connection a suggestion
by Francis 81. Sisson is deserving of
serious consideration and might
we'll be studied by the Investment
Bankers committee with the idea of
adapting it to the problem in hand.
Briefly, Mr.. Sisson believes that, in
order to inculcate the investment
habit among the millions who have
become investors for the first time
during the war loan campaigns, two
things are essentials; first, the Gre
alton Of standardized investment
paying a good rate of return and
commanding the utmost confidence,
and, second, continuous, nation
wide, educational advertising, cost
ing millions Of dollars a year. With
out such campaign little headway
could be made, and the advertising,
he holds, would not be profitable
unless it were concentrated year in
and year out on particular type of
security. The idea, therefore, would
be to form a company with very
large capital, controlled, perhaps, by
the investment bankers of the coun-
try and under the close supervision
of Federal authorities, which would
buy securities wholesale and, using
them as security, sell it's own debent-
ures or collateral trust obligations
in large and small denominations,
making them, through the adver-
tising campaign, household word
among investors throughout the
country. In varied forms this has
been the practice in other countries
for years, and it has been so sue
cessful that, although this is the
richest of all nations, with far the
largest per capita income, the num-
ber of bondholders was relatively
insignificant compared with the
numbers in other countries before