The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-11-06
OUR FINANCIAL PROBLEM.
A Time for Prudent Improvement Of
Our Opportunities.

Our Opportunities.
To THE EDITOR OF THE suN---Sir: When
It was found that Stock Exchange loans
had increased according to the reports
made to the committee, was it true
that bank loans had increased by like
amount. or when certain patriotic Arms
In the Street restricted their loans at
the instance of the committee. did not
these firms find themselves with surplus
funds In hand which they had borrowed
from the banks and which in turn they
merely reloaned Mt the current rate of
10 per cent, thereby not increasing the
original loans from the banks?
Undoubtedly. none who has understood
the situation could dispute the need, a.
well as the des!rability. for restricting
speculation, but the manner in which
the attempt has been made to accomplish
this Is certainly open to objection and
Investigation looking to some improve
ment in the method.
When the war broke in 1914 there re-
manned but one open security market
of Importance In the world wherein in
vestments could be turned into cash. by
Europe, the need OF which they pru-
IDENTIFY foresaw. We took back from,
Europe In the spring OF 1914 millions OF
securities at fair prices, and when the
Stock Exchange, which had been wisely
closed. was reopened few months later
we took back millions more. These Sc
curities We have carried for nearly Ave
years. and now that the war is admit
tedly drawing to a close. Europe is again
Investing in sound American securities,
which II is purchasing in this market
to undreamed of advantage. The con-
dition is exactly as II we had said to
Europe in 1914, Don't worry, we will
hold your securities in safe keeping for
you, and give them back to you when
the war Is over. Meanwhile, you will
secure interest and dividends because
we will deduct these from the price at
which we return them TO you"
We have bought Liberty bonds and
paid taxes and conserved credit for Gov
eminent use until in the matter of cash
and credit, thanks to the education OF
the public in borrowing. the Federal
loans, and we stand to-day practically
strapped" periodically powerless to
help ourselves, while the wise investors
of Europe are avidly picking up the
acknowledged bargains in American in
ves;ment securities.
Liberty bonds instead OF being in the
possession of the buyers are lodged with
the banks, who have In turn lodged them
with the Federal Reserve banks The
credits involved, instead OF being at the
disposal OF the investor and merchant
which in many Instances would have been
| used directly OF indirectly for Govern
ment credit. are thus In reality, to nc
| inconsiderable extent, turned against the
Government. They do these things DIFF
| ferently In France. where the owners
| OF Government obligations are the actual
holders: In other words. France makes
! its bonds attractive to high and low
rich and poor, and coaxes money fol-
| their purchase from the traditional
, sugar bowl. money which otherwise
would remain hidden and useless.
Why have We not followed the exam.
| pie Of France In the Issue Of premium
| bonds? From time to time ] have seer
this nlap advocated hnt not adooted
| 7, annears 70 me that a premium draw.
ing hond would have given and would
s,III give the Liberty bond a wider dis.
trihution-there is'another loan COMING
and bv drawinp out the countrye hid.
den cash would have relieved the credit
situation probably to an extent that We
do not readily conceive.
! 7, brief as in snv commodity Of dali,
life whv not give the peopIe what the,
want? Advertising, for example, work,
In the distribution of things that peo
ME wan, or at least OF things for which
that TYNE OF market NAV be created
Advertising does not try To fo,st upor
the nubnc what II does not want. ant
ALL rooa business follows the lines O,
Ie.s. Resistance
| IIod wa y,ven tho nubI,c wha, th,,
wanted in the matter o, bonds the,