Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-05-16
GREAT THRIFT ERA
+ SEEN BY BROKERS
American Investors, Greatly
Increased Since War, Look
| ing Toward Europe.
BY DAVID LAWRENCE.

tendency toward thrift which is re-
Elected in the reports of bankers from
All parts of the country. They tel
more of the development OF the small
investor and of the progress which
investment education has made in the
last few years. ana the increase IN the
army of investors has made the In
NeStment bankers Associations fee
an even greater responsibility than
ever before as to the duty of its mem
bers to protect the public against
fraudulent securities. Listening IL
the discussions one is impressed by
the seriousness with which the mat
ter OF ethics in the tloatations of Sc.
curitieS is regarded.
The general trend of opinion among
The bankers interviewed is that there
Is Il reserve oil credit and borrowing
power in the United States which has
hardly been scratched.
Confidence Is Keynote.
Plans for the financing of railroads
and public utilities and for the mar.
keting of real estate mortgage bonds
and securities generally are being
made with confidence that the people
viii absorb good offerings as rapidly
as they are put out.
There is of course, general salts
of the country and feeling that be
cause OF this the market for good
securities will grow TO unprecedented
proportion in the next few years.
Despite the fact the United States
has not become a political partner
Of Europe since the war, interesting
comments were made here on the eX-
tent to which the American inves-
tors are becoming the economic part
nerS OF foreign peoples, not only in
The Financing OF government loans
nut in the rehabilitation of foreign
industries and in the development of
European trade and industry general
Iy. AS an evidence of the belief that
foreign loans will become increasingly
important to the investment banker.
The board of governors approved an
appropriation OF $4,000 to conduct re-
searches in foreign finance in coop
GRAFTON with New York University.
Federal Attitude Disapproved.
Some informal comment was heard
as to the attitude of the Federal Gov
eminent toward foreign loans. 1t is
no exaggeration to say that the policy
of the Department of State in inter
posing objections to loans of a pro-
ductive commercial character IS re-
garded as unwarranted interference
in private business. This feeling will
apparently grow more pronounced
now that the Federal Government
has arranged settlements with prac-
tically all the European countries who
borrowed money during the war. The
bankers were quite willing to defer
to the wishes of the Washington Gov
eminent so long as by so doing they
were assisting in the patriotic task
of bringing the United States Gov
eminent into agreement with foreign
governments, but now that this is
concluded they feel that governmental
consideration of the wisdom of private
loans is not in keeping with the
principle of governmental abstention
from private business. 1t is argued
that the commodity Of credit Is as
much an article of import and export
as any material that goes into the
manufacturing side of industry and
that there has never been public ap-
prevail of embargoes in time of peace.
So as the war emergency comes to
an end with the making OF the last
agreement on war debts the Washing
ton Government will be asked TO lit
the ban on private loans. This VIII
not be done formally, but in individual
cases. 1t has become more or less
acute as the British bankers have
stepped in and made loans. which
have been forbidden to American
bankers by the authorities at WASH
ington. So long as no agreement
exists between nations to interrupt
the flow of capital in speclhc cases
the American bankers think 1t is ask
ing too much of them to impose the
restraints that exist today.
Members Talk Foreign Finance.
Although the subject of European
finances did not come up in any for
nal talks. there was a good deal OF
conversation among the members
themselves as to what is going to hap
pnn to the Dawes plan as the time ap.
breaches for the decision of the all
important question of transfers. Ihe
general feeling seems to be that the
Dawes plan was an excellent concep-
ton, in fact. a splendid device to get
the subject of German reparations on
a business rather than a political ba-
sis Out Of this sentiment there Is be-
ginning to crystalline a belief that re-
vision of the Dawes plan, also from
business viewpoint. will become in
valuable The thought seems to be
fairly general that the export of too
much German capital to pay repara-
tons will not sit we'll with the business
world and that considerations of in
ternational exchange at the proper
time will demand lesser payments from
Germany than have been stipulated.
Notwithstanding the hints which
have come from Washington officials
that the transfer problem may have
its effect on private loans. the belief
appears TO be held that as Germany
gets back on her feet there will be
little or no restraint placed on her OPP
portunity to borrow money in America
for productive purposes. The under
living confidence expressed by bank
ers with whom the writer discussed
the question IS that whatever else
may happen to governmental loans,
there is an assurance OF absolute falth
on the part of European countries in
meeting their payments on private
loans. This is due not only to the
fact that the amount of the private
loans is a relatively small item COM
nared to the Indebtedness of govern
Ynents to each other, but because the
era of government lending has ceased
and nations have become wholly de-
Dendent on the commercial status Oh
their credit for future borrowings.
1t is not conceived that any foreign
ueople would risk its permanent
credit by default in any particular on
private loans.
That's why the bankers are looking
forward to even greater opportunl-
ries in the future to assist foreign
governments in their financing.
Copyright. 1922
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