The Birmingham age-herald., 1921-03-17

meoiately after the resumption of specie payments in 1879 there came a squirt Of prosperity which was especially notice- It was due in great measure to the ease with which funds were borrowed in Eu- rope. It lasted for four or five years, and then came the collapse which was sometimes called the Grant and Ward panic Almost all of our railroad financ- ing was made possible by the willing ness of Europe to lend money. James J. Hill said some years later, "All these railroad undertakings were banking propositions" He knew that to be a fact because he was able to obtain need ed funds through his Canadian associa- tions. The Northern Pacific bankrupt- cies revealed the enormity of the borrow ings in Europe based upon the securities issued by this railroad company.
 In little over a generations time the situation has changed. The war changed the attitude of the United States from that of the greatest national borrower Tn the world to that of the greatest lender | Tn the world. We absorbed much the I greater part of our debt to Europe, at least that part of it which was backed by railroad and industrial securities. After the Civil war the United States De ban to develop some part of our natura. resources and greatly to expand our railroad systems by means of money which was secured by the marketing of securities in London and upon the con- tinent of Europe
 1 Now reverse action is certainly to be observed as soon as the tangled diffi- culties which have ben raised by the l reparation problems are untangled as they will be- When that is done then European governments and foreign in- dustrial corporations will turn to the l United States as we did more than generation ago to Europe. They will offer for sale in this country securi- ties behind which stand unquestionec values, and these offerings will be made in the hope and presumably the certainty that they will be accepted in the United States. In fact. already foreign govern ment loans have been easily floated in the markets here. These bear the guar antee of France, of Belgium and of Dem mark. They are unaffected by any fluc- tuations in foreign exchange because they were issued in dollar denominations
 WHAT EUROPE WILL DO
 One of the best authorities in the finan- cial district when speaking of the out look said this morning that after Euro pean nations are re-established on a firm footing, and there is no doubt that they will be since the instinct of self-preser- vation will make this inevitable, and when the fear of national bankruptcy na~ passed away, then European securities will be issued in such tempting form as to make them popular not only with American banking institutions, but also with the individual investor
 Many times the statement has been made by those who speak with author ity that we cannot expect that the stu 4 pendous trade balance in favor of the United States will be liquidated and nor nal conditions restored by the payment of all or any considerable part of this debt in gold, Some gold will find it's way here and it will be somewhat re- luctantly accepted because we have no need of it. We cannot look for a con siderable liquidation of this debt through the marketing in this country of foreign made commodities. But the way is open for giving substantial aid to Europe through the purchase of highly approved securities. It may be that we shall ad- vance so far in transactions of this kind as to be able to point by and by to the fact that our own investment in foreign securities matches or approximates the tremendous investment England has , made in securities of that kind. This Is an investment which is regarded as the ultimate bulwark for the protection oi the finances and the trade of Grea1 Britain.
 THE 1920 TRADE
 Sometimes desparing words are heart when the record of our foreign trade IT 1920 is under discussion. This is not be- cause this trade was not very large ol because the visible trade balance was one billion less than the visible trade balance of the preceding two or three years. The anxieties are due. as con. fessed, to the falling away from th, : record of previous years of our aggre gate international trade.
 l It would be incredible, however. if re. port were made that our internationa trade in 1920 did not dec'ine as compared with trade the year previous. but in creased; incrediable because the trad of the entire world fel off in 1920 IT speaking of this one Of the authoritie says in exp!eration that the interna tional situation continues to overshadov domestic trade and industry: There ar, no signs yet of quickening trade in Flu rope or in Asia. In fact some stagna l tion is reported from everywhere. would be the most ignorant interpreta tion of this condition, however, to attrib ute it to overproduction. It is due wholly to disorganization of the worlds indus trial system. and this has made it in
 CITY LICENSES DELINQUENT