The Washington herald., 1919-02-13
FRENCH BONDS
PROVE POPULAR
Holland Draws Contrast
Between Issues and U. S.
Liberty Loans.

The other day bonds which were
.ssued while the war was raging by
three Of the cities OF France, Bor-
deaux, Lyons and Marsailles. COM
manded in this market as high a
price as lO2. When one looked at
these quotations and then turned his
sye to those which reported the mar
ket price for the various issues Of
Liberty bonds, he discovered that ap-
parently the credit of the French
cities Is considerably better than that
OF the United States. at least as re-
nected by bonds. The bonds OF the
French cities command 2 per cent
above par. The Liberty bonds were
from 4 to per cent below par.
There is. however. no real impair
ment of the credit OF the United
States. Nobody doubts the ability or
the country to redeem the bonds at
par when they become due. Many do
doubt, however. the ability of the Sec
retary of the Treasury, Mr.. Glass, to
hoat the fifth issue of Liberty bonds
successfully unless extra pressure is
put upon the banks or unless the rate
OF interest nominated in the bonds be
as much as per cent.
The excellent quotations for the
bonds OF the French cities have caus-
ed the comment to be made that as
soon as possible the United States
viii be undertaking to aid our allies
in the liquidation of the 5000 0OO, 900
or even SlO,OoO, 10000 for which the
Treasury Department now holds the
demand notes Of our ally govern
ments. and which as soon as peace
Is ratified will be converted into
bonds, by the purchase of securities
issued not by the government of Eu-
rope but by municipalities. public
utilities, railroads and other corpora
tons.
One OF tho leading bankers of Chi
caSo who is now in Europe represent
ing American banking interests said
before he sailed few days ago that
American banks are sure to buy and
ultimately private investors will be
glad to buy these securities issued
by public utilities of our allies. This
banker in fact stated that he would
80 to Europe prepared to enter into
negotiations which when completed
viii place in the American market
millions OF the securities which rep
resent foreGn public utilities.
The proposition has recently been
made that agreement be entered into
whereby the national obligations of all
the allies issued since the war be con-
tinued for a long term of years: in
fact, such agreement as would repre-
sent the kind OF moratorium which
was established when the war began.
This proposition. however, is not
looked upon with favor. at least in
the financial district. any more than
" as the suggestion which was made
by George G. WiCkersham. formerly
Attorney General i'm the Cabinet of
President Taft. that the United states
send a reCCiPted dill to the allies who
have been securing credit or borrow
InC money i'm this country.
Moro and more the impression
tends towards real conviction that
tho only way by which the payment
of the great obligations to the
United States cap be in considerable
part met is by the investment OF
American money in securities of
foreign governments or foreign peo-
pies Nevertheless difficulties will
arise il that principle be adopted.
n II Americans buy in large amounts,
say from a billion and half to two
billions OF European securities each
year. there would follow inevita BILE
competition between these socuri-|
tics and those issued in the United
States. The tendency might be to
lower the market price OF our own
securities. However il highly ap-
proved European securities arc
brought to the United States for
sale and II the terms are attractive
they will undoubtedly command A
ready sale. even though there might
he thereby created serious compe-
tition with American securities.
These are considerations which
foreshadow financing probabilities
OF the future which in their way
may exceed the amount OF the
financing which has characterized
the United States since the war be-
gan, and especially since this coun-
try became one of the belligerents.
Some Of the ablest leaders say that
the outlook OF future financing is
such as to suggest conditions which
almost staEEer the imagination.
There is no doubt, however. that the
United States will remain for some
years the best and the most con-
yenient money market and in that
sense will retain its present pres
tige as the real money power Of the
world. although there is good un-
dorstanding of the zeal with which
leaders in Great Britain are pre-
pairing for regaininE the prestige
Of that country as the leader in the
worlds international trade.
Farmers md wheat.
Although the taxpayers Of the Unit
cd States will he called upon to pay
the difference between the price Of
wheat at S2I6 q busheI which the gov
Crnment guaranteed and the market
price-a difference which may amount
to n very large sum-nevertheIess
those who have good understanding
Of this subject realize that the gov
ernment cannot. without forfeiting
good faith. do anything but nav the
American farmers so26 for the wheat
that was raised in 1919.
The reason for this is that when the
government guarantee Of that price
was made known to the farmers they
set to work in good faith to cultivate
and harvest all the wheat that was
possible. They did secure a crop
which. while not the greatest. was
ono of the greatest. BY so doing they
have hEhtened the hand Of Mr.. Hoov-
or. and those who are to be occupied
with feeding those of our allies who
are desperately in need Of food. So
are desperately in need OF food. So
its word to the farmer that he should
be paid by the government 1925 a
bushel, now. as he has kept his end
os the bargain. the government can
not. without dishOnOr, repudiate its
own contract.
on the other hand. there does pre-
vail e belief that the American farm
ars are not paving a fair share Of
the taxes OF the country. Certain
iEures that are given apparently for