The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-14
Keenest Financiers
Foresee After War
Conditions and Snap
Up Amply Secured
Tax Free Issues
By AGNES c. LAUT.

L \ out the senior member of great
American bond house was in Europe. Up
to the time of the war the house had been
VIGOROUSLY conservative, if one may use
the word NOTORIOUS" in connection with
firm that handled only ancient and hon.
orable and moss grown estates and never
touched any security that was forty sec
ond cousin to a speculative venture.
While the bond house was a very old
one the senior member Of it was still
very young and very live man, and what
he heard and observed among the Cont
mental bankers gave him acute and unac-
cOuntabe concern. The most astute Con-
tinental bankers, especially the Germans,
were selling Americans Sc
curities of every variety-as fast as they
could feed them out to the public without
creating panic. They were selling on
descending scale.
1he bond house man hurried back to
America He consulted his steady clients
and he, too, began selling. You remem-
Der the unexplained decline in parktt
values for about year before the war.
Stocks went down and he continued TO
sell. Bonds as good as Government secur-
tiles went down and he continued to sell.
He unIoaded about $50,000,OO worth for
his clients and put the money away. This
was before June of 1914.
''But what are you going TO do with T.
twitted a relative.
'Put it in strong box, turn the key
and sit On the lid"
'But why?'
81 don't know-that's why. It's be-
cause / don't know that l am turning
paper into gold. When there is strong
unaertone below and storm signals show
above and / don't know why, am going
to play safe If we have the gold, then
when We do know why, we can act to ad
vantage and act quick"
"But what explanation have you given
your clientsf"
"None! The little fellows, the widows
and orphans we will carry on our books
at the same rate of interest their secur-
titles were bearing. The big fellows /
have told frankly / don't know why and
until / do know why we purpose turning
securities into gold or Government paper"
Learned Why in August, 1914.
By August, 1914, that bond house and
its clients knew why Cotton went to +
cents. Wheat could not be sold at g.
cents, for the railroads would not receive
it. The Stock Exchange closed. Bonds
were not sellable at any price.
Stocks standing for values as good as
gold were being privately exchanged at a
third and tenth of their values. People
caught by the situation had to have money
and they sold at discount that was fixed
partly by their own fears, partly by their
own desperation and the rest by the plain
fact that money had gone off the market.
Then the Young member of the old
house did another unaccountabe thing
About the time j. p. Morgan and c. NJ
Schwab went to Europe without any an
nouhcement beyond the fact of their sail
ing, he took his fifty million dollar strong
Observation-Disclosures of hiding and
he went quietly on the market and he be-
gan to buy, not on a margin, of course.
He didn't need TO buy on a margin.
He was buying at a wothirds discount
of real value, and he was buying for cash
BY the time the Stock Exchange opened
and the general public began to come back
with whoop, he was loaded with securi-
ties and his clients had already risen up
in their places and were calling him
blessed.
Then this old head on young shoulders
did another unaccountable thing. BY the
time the whole American investing pub
lie was plumb locoed, frantic. crazy over
war stocks. when some values had gone up
600, 1000, 1000 per cent, he was back in
the market selling what he had bought
and putting the cash back into the strong
box in the form OF gold or Government
" r.