The Birmingham age-herald., 1918-10-29
WILL SELL BONDS
 TO FOREIGN LANDS
By HOLLAND

New York. October 2S-fSpecial) )-lt was the belief of the late Frederick D. Tappan that when 8 money famine pre- vais with attendant panic, the best way to relieve the situation is to create a large money pool and then offer the funds upon the floor of the stock ex- change, not restricting the price for he was persuaded that the flow of money in large amounts would speedily tenc to bring the price down to normal fig ures because supply would be in excess of demand. MT. Tappan demonstrated the acuracy of this view upon several oc- casions, for he came to the rescue in panic emergencies having raised a money pool, and then offered these funds in the open market. Speedily the price re- acted to normal figures.
 At one time when money panic pre- vailed and some of the governors of the stock exchange for that reason called upon J. Pierpont Morgan to explain to him the dangerous and desperate situa- ton, Mir. Morgan said no more than this: "Go back to the exchange and let an ncuncement be made that immediately large amount of money will be offered and let that be marketed at whatever price it will fetch. The effect will soon be perceived in a reduction Of bids Tor money until in little while 1t will com mand no more than the normal price.
 It was exactly as MT. Morgan said would be the fact. Making use of the tele- phone he secured in little while from various banks contributions to money pool the aggregate amount of which was large. That money was at oncs offered in the exchange and speedily there fol-
 lowed a rapid decline in quotations until
 before the end of the business day money
 was at normal market rates.
 It may be that some reference was
 made to these earlier experiences at the
 meeting of the so-called New York bank
 CTS money committee which undoubt-
 edly had under consideration the pre-
 vailing and strong impulse toward specu-
 lation and investment If the conditions
 which were associated with money dif-
 faculties in the days of MT. Tappan anu
 Mr. Morgan are somewhat similar to
 those which justified the bankers money
 committee in holding an all-day session,
 then it may have been suggested py
 some of the bankers that the expedlent
 way to overcome any difficulties which
 might arise from such movements m lne
 exchange as have resulted Tn lvV,V"'
 share transa ctions day would pc ps
 following the precedent set by MT. MOT
 gan and Mir Tappan. or, in other words.
 to permit call loan traNsactions to fad"
 just themselves to the situation, not
 being affected by arbitrary artificial re-
 striction.
 AND INVESTMENT
 It Is one of the interesting features
 associated with the floating or the Iourtii
 Liberty Loan for s6,000,0000OO that there
 then began speculative impulse and
 also good deal of puying by the pup
 lie of securities This, too, III spite or the fact that 1t was necessary for sup scrjbers to the Liberty Loan who bought upon the installment plan speediiv to pay in 10 per cent. this being an lnlual payment, Some days may pass oeiore there is accurate information respecting the amount in the aggregate of these
 payments Many persons paid the initial installment when they bought the oonus but how many did this the country ma! not know until several days pass. oh the assumption that the New Iork ois- trict subscribed for the full amount ..
 the quota O; s1,S00. 000,0 900. there shouio have been paid as an initial instaliment s1so. 900 GOO on october 24. In the entire United States it was necessary to re- ceive on the day fixed on the initial pay ment $500, ,000, 900. So far as the reiatioh | of the member banks to the 1ederai Ie- serve banks are concerned they were apie to meet the initial payment and more !, than meet it by turning in treasury cer- | tificates of indebtedness. But subscrio- CTS were obliged to make cash payment. What occasioned the speculative ini- pulse was in part the continuing VIC tories of the allied armies in Belgium and France, in part the conNiction that actual warfare will cease within SIX
 or eight months; in part, also, the vast amount of money which is held on de- posit in the banks by the people of the United States, and also the belief that prevailing prices for securities are low. Steady investment in foreign governmeus bonds has been in progress, as, Tor ln- stance, the Anglo-French bonds, the French republic 51a per cent bonds. the
 bonds of Bordeaux, Lyons. Marseilies and Paris and United Kingdom 5is per cent bonds, as well as Canadian bonds, are finding enlarged markets for investment purposes in this country.
 But there is an interesting, even curf- ous. reverse point of view. for while for eign bonds are being more and more ab- sorbed by the American people, on the other hand people in European countries are now buying for cash, and therefore for investment, American securities in very large volume. Probably the fact that the enormous volume of exports Tn the month of September was of the money value of approximately S500, ,00O. .0U and the aggregate money value of our exports for nine months was in round numbers s4.50o, 100000, had little influence in stimulating the speculating tendency Our total exports for the current year are likely to be of the money value of | s6, ,000, ,0O0, GOO. The effect of this enormous trade will be felt later on and is likely l to stimulate further interest in securl- ties speculation and investment.
 Other parts of the United States than the New York district, especially tho midwest and to some extent the far
 west, have been in receipt of enormous
 amounts of money which represent paS-