The Washington herald., 1918-08-30
U, S. WORLDS
MONEYCENTER
America Likely to Retain
Position Now Held
Says Holland.

e1A " aAD1L8s J41S e@NNA AA1 AN~-Ac-
ment from the service as a member
OF the Federal Reserve Board at
Washington. was quoted as having
said that II there are no mistakes and
In addition to that there be wise man
agement and direction of our fnan-
cial activities he could see no reason
why the United States would not be
able 70 maintain, after the war Is
ended. the position this country now
holds as the money and exchange
center Of the world.
Although Mr.. Warburg did not say
So yet between the lines It was pos
siole to read a thought which he may
hereafter find It worth while to put
into words. For It Is believed to be
clear that he Is of the opinion that
anything in the way Of restrictive
legislation which would AFFECT the
great securities market. would be
likely TO be OF no benefit to the pub
lie. whereas on the other hand. 1t
would tend to impair q condition
which the securities market in the
United States has attained as the re-
suit Of evolution and many years Of
experience.
Fear m to Restriction
There does prevail some apprehen-
sion that legislators at Washington
or at State capitals may attempt to
secure certain restrictive legislation
Affecting the freedom which now
eharacterizes the securities market
Some OF those who have had expert
ence and have shared In the activities
OF the securities market Of which the
stock exchange Is the center say that
their experience. in some instances
beginning with the panic Of 1857, con-
vinces them that the United States
now possesses one OF the most i'm
portant assets OF the nation through
the wonderful machinery which Is
now IN daily operation on the New
York Stock Exchange. The chief rea-
son for regarding this as an asset
which now and hereafter will be OF
great service not only to the govern
ment but to the people, is the fact
that we now have a liquid market
subject to very few limitations. II is
a market in which freedom OF action.
controlled, OF course. by wise rules
which experience has shown to be
necessary, Is the fundamental prin-
ciple.
Those who have read and studied
the history of securities markets do
not hesitate to say that it has taken
even centuries to perfect a liquid
market such as the United States
now possesses. strictly impersonal as
to the ownership or identity of those
who buy and sell. Venetians know
nothing Of a market of this kind, nor
did those who followed the Venetians,
especially the Dutch. The London
securities market Is not liquid, as is
that Of the United States In the
United States the growth has been
- kWNk - l. ~
or seventy years, until now this mar
ket Is regarded as the most perfect
liquid market. strictly imperssnaL to
be found anywhere in the world.
An illustration by comparison may
perhaps give q better understanding
OF what Is meant by liquid market.
Real estate and almost all naanufac-
t1red articles require elaborate and
expensive systems Of distribution.
Often several weeks, even months,
must pass before a piece Of real es-
tate Is marketed. For a transaction
of that kind requires negotiation with
many uncertainties. and furthermore
the price finally established Is not a
great factor in determining the true
value Of the real estate. On the other
hand. the liquid market on the stock
exchange Is always instantly avail
aDA0- 70 Always QuONdllOH
which means practical cash for the
seller. Neither the seller nor the buy
er Is necessarily aware of the others
Identity.
( The action Of J. P. Morgan & Co. in
accepting as security for call loans
based upon Federal bank discount
terms, banking acceptances, is an ex-
ample Of the tendency to increase, IL
that were possible, the liquid charac-
ter Of the stock exchange, at the pres
ent worlds great market for handling
securities There may be other ad-
svantages similar in principle II not
IN kind to those which will follow
the leadership Of J. P. Morgan & Co.
in 50 acting. as sooner or later to set
free what in the aggregate is believed
10 be at least "a, 900. .0OO, COO of frozen as
sets- Acceptances and the utilization
Of them for stock exchange transac-
tions. it Is believed, will convert much
the greater part of these frozen assets
into liquid assets.
After the War Is Ended.
: There is no doubt among the leaders
OF the financial-d district, and 1t IS
believed there Is no doubt in the mind
Of Secretary Of the Treasury, Mr.. Nc
Adoo, that after the war Is over this
country can remain the great center
OF exchange for all nations. There
fore, 1t is the wiser part to protect
and guard our facilities wPish will
be appreciated and will be anable
by reason OF our liquid mas et to
handle satisfactorily and pi badly
permanently the securities OF the
world.
We are now handling q consider
able part OF these securities and the