The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-10-22
BANKERS TO FLOAT
BELGIAN BOND LOAN
Investment Financiers Hold
Conference on Proposal
With King Albert.
IMPORTANT PAPERS READ
Years Municipal Securities
Sales Observation-Disclosures
Market Discussed.
IMPORTANT PAPERS READ
Special DespatcA to Tn suS.

Market Discussed.
Special DespdtcA to tbs suS.
ST. LOUIS, Oct. 21..-The visit OF the
King and Queen of the Belgians to st.
Louis to-day was an irresistible counter
attraction to the second days FIRST ses-
sion Of tho Investment Bankers Associa-
ton convention.
Bonds OF the Belgian overnment will
be offered to American investors, II was
decided to-day after conference be-
tween King Albert and q committee Of
investment bankers on the prospects Of
payment
One OF tho most important papers this
afternoon was n report based on an
analysis Of the railroad situation, made
by committee headed by Allen b.
Forbes, an invesment broker of New
York. 1t contained many recommended
tons concerning the future disposal OF
the roads, principally advocating their
early return to tie owners.
Two other reports covered legislation
and fraudulent advertising. Both were
prepared by committees headed by New
York brokers, Howard F. Beebe having
charge of the report on legislation and
William H. Maxwell. Jr.. of that on ad-
vertising.
On to-day's programme also was an
address by Edmund Perkins Of the Ma
tiond Drainage Congress on The In
lamation of Swamp and Overflow
Lands" The organization Of which Mr..
Perkins Is the head will hold its annual
convention here in November.
Paper by Thomas w. Lamont.
Another feature was q report on for
eign securities prepared by a committee
headed by Thomas w. Lamont. member
of the firm of ]. P. Morgan & Co. and
financial adviser to the American peace
delegation at Paris A report on pub
lie service securities was made, and there
was an address by John F. Gilchrist.
vice-president of the Commonwealth Edi-
son Company Of Chicago, on ''The Elec-
trio Industry"
The delegates attended a dinner at the
Missouri Athletic Association this eve
ming, after which they were entertained
with a smoker and vaudeville pro-
gramme.
Criticism Of the League of Nations
was offered by Homer B. Hubert, author
and traveller. who once served as politi-
cal adviser to the former Emperor Of
Corea in an address on THE Firing Line
hundred delegates to the convention, at
Sunset Hill County Club. His address
followed, dinner given at the club by
local investment bankers in honor OF the
visitors
Several reports were read to the dele
gates among them one prepared by the
associations real estate securities COM
mittee, criticising the methods and prac-
tees Of dealers Unreal estate mortgages
The methods of these dealers were
characterized as archaic and primitive
and detrimental to this class of invest
ment."
Making n Mortgage Market.
THE mortgage business, by reason
of certain fundamental defects in the
manner in which It has been conducted.
has lacked the recognition to which 1t
is entitled" the report stated. Lenders
either through excessive caution or mar
row policy have chung to short terms,
frequent commissions and renewal
charges. With more uniform standards
would come greater uniformity in prac-
tice, ready market, increased con-
fidence and more general acceptability of
a security which should be the best in
the world, having behind 1t the basis
of all security"
The report held that the existing
mortgage machinery is inadequateA to
meet the building development that is
certain to come throughout the United
States in the next few years. The COM
mittee regards the action of a number
of conservative bond houses in handling
mortgage issues upon specific properties
or upon a pool of mortgages as a step
forward in the mortgage business.
The real solution will come with the
establishment of mortgage banks with
the highest backing and material re-
sources these banks to issue their own
securities based upon a pool of mort
cages, and also, TO those who desire IT,
10 sell guaranteed or ungua ranteed
mortgages and certificates based upon
specific properties. Such companies could
deal with both farm and city mortgages
and by their standing and the volume
of their operations would gradually
create an acceptable market for mort
gage secupties.'
A survey of twenty-five cities made
by one member OF the committee and
outlined in the report showed that build
ing costs had advanced So per cent. in
the last few years and that building
material had Increased &c per cent in
price in the same period.
Big Increase in Bond Sales.
The volume of sales of State, city,
county and municipal bonds during the
last year almost doubled that of the
previous year. according to a report pre-
scented to the convention by the munich
pal securities committee.
In the period between October |, 1917,
and October /, 1913, bonds of this char
acter amounting TO 1855. 81 ,09S were
sold. while In a similar period ended
October 1, 1919, s564.6s3,453 worth OF
these securities was sold.
THE conclusion has been reached"
the report stated, that the greatest
need In tine handling of these securities
is the working out of plan that will
aid in bringing about the prompt pay
ment of interest and principal by COM
munities that are slow in forwarding
funds to the DESIGNATED place OF pay
ment Some OF these faults are casual
and some chronic. This brings about
delay and involves in many instancec
collection charges, causing justifable
irritation on the part of the innocent
holder, frequently prejudicing him
AGAINST the value OF the security"
The committees report held that legis-
lation limiting the authority of COM
munities TO create debt and creating an
unlimited tax to pay principal and in
terest on bonds OF this character should
be enacted in every State. In present
conditions in many localities, the report
stated, the communities can create I'M
limited debt but have limited authority
to raise taxes to pay for them.