The Washington herald., 1919-03-05
EUROPE TO GET
BACK SECURITIES
Disclosures Mean Release to
Banks Of Big Sums Of
Money.

new financial movements that are OF
magnitude or that point to the read
justment OF International financial
conditions which were established
|durtng the war. These all forecast
movement. in the aggregate esor-
nous, which will be under way in the
course OF the next six or eight
months
They also mean the release to the
banks of large amounts Of money.
day or two ago there began a return
movement to Europe of securities
which were sent here by Europe IN
order to protect loans which were
made in this country, chiefly with
banking and financial institutions.
When this Federal government
granted credits and made loans to
foreign nations they received from
England and France and Belgium, in
acknowled gment of these loans, notes,
payable upon demand. That was the
only visible security which our gov
ernment has for the repayment or
these loans.
1t is the expectation OF those in
authority that in course of time
these demand notes will be exchanged
for longtime bonds. Very likely ne
gotiations Of this kind are among the
responsibilities which are upon
Thomas W. Lamont. who is now in
Europe at the request of President
Wilson. nominally TO act as a finan-
cial adviser really, no doubt, to act
as the agent or the negotiator on the
part Of the United States in certain
Z very large transactions.
Ten Billion in Bonds.
When these demand notes have
been converted into longtime bonds
the United States treasury will have
in its possession an aggregate or
$40. O.0O0. 10000, represented by bonds, to
bear an agreed upon rate Of interest,
and that have a long life before ma
turity comes
However. there are at present no
transactions involving any change rH
the financial relations Of the Treasury
Department and the nations OF Eu-
rope which have been borrowing bill
lions from the United States.
On the other hand, the American
bankers who have loaned many hun
dred millions TO Europe are begin
ming now TO realize upon these trans
actions. For instance. France mas
borrowed a large amount OF money in
the United States at one time or an
other. the loans being represented by
shOTt-time notes, and behind them
being collateral security. Some OF
these issues of notes are now matur-
ing.
An issue Of the short-time notes o.,
Great Britain matUred on February
and these have been for the most part
converted in the United States as
permanent investment.
Z Recently there has been visible evI-
dence of the return to France of a
vast amount Of securities which
France sent to the United States anu
which were used as collateral to pro-
tect loans made ~ this country. For
many persons saw the packing OF Sc
curities In boxes and the hauling Of
them through Wall Street.
send Them Back.
One Of tie trust institutions OF
New York, which carried in its
vaults for one or two years securities
which were placed in the United
States for the purpose of protecting
loans, is now sending them back.
The loans have been paid. although
there are other and very large loans
which remain to Sc paid. not includ-
ing those which have been made Dy
the Treasury Department and au-
thOrized by Congress. When these
are paid, other collateral securities
will be packed in irUu-bOund boxes
and sent across the sea.
As many as twenty boxes of good
size were required to pack and scnd
back to France a few days ago Sc
Curities which are no longer needed
because loans had been paid. If it
were gold that was thus packed care
full guards would be placed over the
? boxes. the boxes would be sent to the
steamships under guard, and would
be placed in steamship vaults and
watch would be kept over them until
delivered to the authorized persons
abroad.
Moreover. the gold would be 50
packed as to prevent abrasion. Ex-
Cessive care is not necessary when
securities are packed. From time TO
time many boxes containing gilt-edge
securities will he sent back to France
or to England. thus indicating that
the loans which these securities were
pledged to protect have been paid.
Opportunity is furnished by the re-
turn Of securities to France or to
England 10 gain some idea of the
magnitude Of the resources Of these
two nations and OF the manner in
which. before the war began, they
invested their yearly incomes. Eng
lands yearly income was reiuvested
to Great extent in securities issued
by the people or the nations of South
America or OF the English colonies
Or Of the far east.
One Large Investment.
One block Of 90. .OO0. coo bonds issued
by the National Railroad of Austria
LA was taken up by Great Britain
and constitutes one item in her large
investments. Canada. until the war,
for time made financing of this kind
; impossible. sent large blocks or bonds
to london, because Canada's i'm
proyements of all kinds were chiefly
financed i'm London.
When it became necessary for
France to borrow large amounts in
the United States, not only from the
Federal sSernment. but from Ameri-
the magnitude of French investments
in gilt-edge securities.
The people OF France possess hun
dreds Of millions OF these securities
and the French government courte-
ously, but peremptorily borrowed
these securities and sent many of
them to the United States as pledges
for loans. They consisted in part of
bonds issued by municipalities by
French industrial corporations. for
French people do not need to he
taught the lessons OF thrift and have
IN i'm