The Washington times., 1922-10-07
FINANCE.
AND
RUsiNEss. M
BY B. G. FORBES.

his fortune by buying French bonds
when the streets OF Paris were run
ming with blood. wouldn't he. If he
were alive today. buy German
bonds at their present extremely
low prices in foreign money!"
A reader asks that question.
don't know what Rothschild
would do. l know that all along /
have been sounding warnings against
buying German marks. These warn
ings were started when the mark
was worth many times what 1t Is
now quoted.
s for Geran bondsmetapincmfwyp
AS for German bonds, l haven't
thought Of putting any Of my money
into them. Maybe that's because
I'm rather a conservative sort OF fel'
low-at least in investment matters.
Even were l a speculator. wouldn't
touch German marks. and very
much doubt whether l would care to
put any of my savings into German
government bonds.
I rather believe, however, that
there are wonderful opportunities In
the way Of acquiring an interest in
certain German enterprises. AS
matter Of fact, know that some
ken.minded Americans have been
putting money into German prop
critics. But they Investigated before
they invested. They went into these
things with their eyes open. They
knew what they were doing. They
looked things over on the spot.
For the ordinary person. with a
few thousand dollars to invest. 1t
would be safer to buy something at
home: something less speculative,
something he could get full informa.
ton about.
The extraordinarily dislocated
state OF the world today affords
enterprising rich men infinite op-
portunities for the exercise of their
financial ingenuity. There are un-
questionably unprecedented bar
gains" lying loose in many coun-
tries at this moment. But only those
fit to spot them and to seize them
are In a position to profit thereby.
They are not within reach of you
or me. II we are wise, we shall try
to play safe.
Higher wages are more likely
than lower wages.
Look In your wallet. and II you
are foolish enough to carry around
any considerable sum you will prob.
probably find one or two yellow.
backs" that Is, gold certificates.
Until now these had been completely
out OF circulation for several years.
The banks grabbed hold OF every one
which came their way. These "ycl.
low-backs" count the same as gold in
bank reserves. This pumping OF
them into circulation means that the
banks are anxious to reduce their
stocks of gold.
The theory is that the accumula-
tion Of such mountains OF gold re-
serves in this country Is a direct in.
citement Of secondary initiation"
1t is worth noting that this week 8
combined statement OF the twelve
Federal reserve banks shows a de.
: crease of l per cent in the total
reserves carried. Decreases will
probab now become common.
Yet, Is this policy farsighted? Ad-
mittedly our gold reserve is at the
moment unhealthily large. But
looking some distance ahead would
1t not be well for our banks to avoid
going out Of their way to throw out
Bolu neeulessly?
Isn't the time coming when
there will be a perfectly legitimate
expansion in the monetary needs Of
our own business world? And is
II not entirely conceivable that
things will by and by 80 change
abroad that bankers and investors
In this country will feel warranted
in investing extensively in for
eign securities?
When that day comes. it would
tend to minimize interference with
prosperity here were the dema nds
met without causing undue tighten
ing OF our own money market by
the severe cutting down OF our
bank reserves.
One is reminded Of John D.
Rockefeller's retort when a visitor
assured Mr.. Rockefeller that he
would be warm enough in the auto
mobile without putting on the pa
per vest Mr.. Rockefeller had pro-
cured for him. Said Mr.. Rookie
feller: Take 1t; take II. A surplus
never hurts"
Undoubtedly, Eugene Meyer, r.,
would make stronger governor
Of the Federal Reserve Board than
w. p. G.. Harding. But the prin-
ciple involved Is far more import
ant than personalities. II Governor
Harding be not reelected. II will
be because OF political wire.pulling
And the Federal Reserve Board is
about the last body in the United
States which should become the
football of the politicians.
The curious thing is that the
Federal Reserve Board, and partic-
ularly Governor Harding, are being
trounced, not for doing something
they did do which they ought not
TO have done, but for doing some
thing which they were right in
doing.
The Federal Reserve Board was
blameworthy for having allowed the
initiation to run riot so long as
they did. But that isn't what they
are now being condemned for. They
are being condemned for having in.
stituted measures to bring about
deflation. Sound banking deman nded
that they do this. OF course, Il
hurt. But 70 does the operating
knife of the physician hurt even
when II may be saving a life.
President Harding's protrscted de-
lay in naming a governor for the
Federal Reserve Board IL becoming
inexcusahle