The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-01-21

great deal has ben said and writ
ten recently about the financial world
leadership OF the United States. But
In considering the subject we have
been more disposed to think OF our
great accumulation of god, our I'M
equalIed trade balance, and our CO.
lossal government financing than TO
contemplate the responsibilities which
such leadership imposes upon us.
Now, however. when we are facing
the biggest and most important flnan-
cial problem in our history--that
OF providing ample funds for the gov
eminent, and at the same time sup
plying the monetary needs OF essen
tiai private business--we are begin
ming to understand that world leader
ship means tho blazing OF a new trail
The situation is unique in our an
mats we have no presidents of our
own to guide us 1t is true that Eng
land and France have lighted part Of
the way for us, but neither of those
countries will. or can, equal our inan-
cial efforts. SO 1t becomes necessary
for us to set up many new milestones
along the road to victory.
Enormous Funds Required.
The total OF expenditures to the
'NC7p VI tttS AtSttii ySdEg EHuIDk y utlt
30, 1918, Is estimated in the annual
report of the secretary of the treas
ury, at the huge sum of slS,775,9I9,-
$50. And the export discloses that in
addition to $3.666.233,S50 from liberty
bonds already authorized. but yet to
be issued. s663,200,000 expected from
war savings certificates, and about
$4,000, 600, 900 from war taxes, con-
gress will be compelled to devise
means for collecting $3.50 600, 900 be-
fore July /.
In addition, during the present year
nearly $4,000, 000,0 900 worth or raft
road, Industrial. public utility. and
municipal securities will mature IN
the United States. Most of these VII.
have TO be refunded
And besides these two heavy finan-
cial burdens, capital must be forth
coming for necessary enterprises and
for the required expansion of estab-
lished industries.
In 1914, ii was estimated, corporate
and municipal borrowings aggregate 1
approdma tely g. 400, 600 900; in 1915.
50, 500. 900. 900. and in 1916, $1,000
100000. The total for 1917 was also
very large, and that for the present
year will be commensurate with war
created circumstances.
corporations
Existing conditions in the security
market have made ii evident for some
time that there must be cooperation
on the part OF the government IL tho
situation is TO be met without serious
disturbance to business. In order that
the government may float successful
~ its war loans and realize the
amount OF taxes II is counting upon
IT, is most important that support and
reinsurance he given which will in.
sptre public confidence and deter the
slaughter OF securities. with the con-
sequent falling Of market prices.
This situatio.t was doubtless reco =
nized in the recent action OF the gov
eminent in taking over the railroads,
This presidents statement assuring in
vestors that their interests would be
protected gave an immediate stimu.
lus to the market, which demonstrate
ed graphically the need OF confidence.
Assurance that railroad obligations
and needs will be- met and fair re .
turn provided upon railroad invest
nents, II 1t Is not unlimited by con-
r ss, will do much toward stabtliz-
ing the market.
| Economies which may be secured
through co-ordinated cooperation
ard the elimination Of all forms OF
anty Of the government possible with
out the appropriation Of funds from
the public treasury. and further en-
able the railroads to render a larger
measure Of service than under pre-
| vious conditions OF enforced compe-
jtitio1 and inefficient regulation.
Eut there yet remain many other
branches OF business which must be
reckoned with. and perhaps some de
+ gree OF support provided for. The
| passing of dividends, falling security
/ prices and financial difficulties ONLY
serve to produce a situa ton which
would threaten the governments own
financial program. 1t Is highly int
portant that solvent corporations
earning fair returns. should be en-
/ abled to protect their bondholders
and stockholders, and. not be threa,.
aned With disaster by money market
conditions.
Need for Caution.
While there must be and will be
material elimination of competition
for money, as well as curtailment o!
! non essential bond and security is
sues, the utmost caution must be ex.
ercised. It is situation which, i'm
properly handled, might easily jeop.
ardize the prosperity. II not the sol.
vency, of many private busin ssses
both great and small, whose earnings
must be relied upon to float the wal
loans and TO keep the country eco.
/ nomicaliy sound.
Each issue of liberty bonds has oc.
caeioned a readjustment In inves.
ment securities which are not tax ex.
empt. Furthermore, the fnancia
needs OF the government for war pur-
poses are diverting current invest
ment funds from the farmers, rail.
roads and municipalities, which were
largely supplied with capital that IL
now being put at the disposal of the
government, and rightly so. But, I
the extent that money, which In peac
times would have gone to help tha
farmers, the railroads. corporations
and municipalities OF the country. IL
applied to the purchase of liberty
bonds, 1t must cease to help in these
other channels.
ETnars~fs,,, NaaYa