Evening star., 1931-12-11
Everybody's
Business
Thousands of Dollars Worth
of Foreign Bonds Are
Now Held BY American
Public.
BY DIR. MAX WINKLER.
Special Dispatch to The Star

Special Dispatch to The Star.
NEW YORK, December 1l-Amer-
| 1cas debtors should derive some en-
couragement from President Hoover's
remarks in his message to Congress
dealing with foreign affairs. Asking for
! ADOPTION OF his one-year moratorium
proposal, the President points out that
II may be necessary in some cases to
make still further adjustments. Other
wise the message was rather general.
containing no direct reference to the
various problems Of interallied debts
and reparationS.
already announced his opposition. The
Senator Is probably under a misappre-
hension Ii he think the move will help
the bankers.
Foreign bonds were sold, but are not
owned by the bankers 1t is the hun
| dreds OF thousands of investors through
out the country who, enticed by high
! yields and all sorts of alluring state
ments, purchased and now own these
bonds.
; Railroad Earnings.
American railroads are expected to
earn only about 2 per cent on their
property investment during 1881, the
lowest figure recorded. This may, in
part, account for the disastrous shrink
age in the price of railway securities.
The decline in prices however. seems
to have gone too far. In 1890 the re-
turn ON property investment was 3.O3
per cent, while the high price for 25
representative carriers last year stood
, at 1876. The corresponding 1891 figure
should be about 80
Even on the basis Of last years low
quotation of 25 representative railroad
shares OF 7420. the figure this wear
should be about 40. 1t Is, therefore
obvious that the hysteria, like every
thing else, is being greatly exaggerated.
Those who purchased railway stocks in
the early nineties reaped substantial
profits. History may repeat itself.
Illinois Central.
Although the Illinois Central is ex-
pected to fall short of earning its fixed
charges this year, no difficulties are an
ticipated in meeting interest payments.
Proceeds derived from the sale of $40
| 100000 worth of bonds last Nav are
deemed sufficient to take care of the
roads cash requirements throughout
the present depression, providing, of
course, the volume of traffic does not
fall materially lower.
Electric Bond and Share,
return of substantially more than
10 per cent on the preferred issues Of
Electric Bond and Share Is entirely
unwarranted by earnings. Net profits
for the first 10 months of this year,
available for preferred dividends,
amounted to more than 367 times re-
quirements. Although the figure is ma
terially below the showing reported in
the corresponding period last year 1t
Is nevertheless sufficiently impressive.
Legislative Proposals.
There is not going to be any lack
OF work in the House of Representa-
tives at Washington. The Seventy
second Congress will have plenty to
do, even though little, If anything, may
be achieved. More than 5000 bills are
to come up for consideration. Many
are designed to meet economic prob
lens Of the day-that is, to solve once
and for all the prevailing crisis
Apparently, there are still men left
who believe in miracles, or, better still,
who are convinced that among their
constituents there will be found many
who believe that the men they have
sent to Washington can perform
miracles.
British Experts.
The rejoicing in certain circles over
the outlook for British foreign trade
following the abandonment Of the gold
standard apparently was premature.
Exports last month show only an in.
significant gain in the number of
pounds, as compared with October,
although the amount in gold is con-
siderably smaller, due to the lower
value Of exchange. This proves once
again the futility of expecting sus-
tanned improvement in the field of
economics as a result of artificial
measures
Sees Payment Suspensions.
Suspension of payments on public as
well as private debts by a number of
debtor countries is predicted by Sir
Arthur Salter, British economist and
former head of the financial division of
the League of Nations. Sir Arthur.
however, has a remedy. Creditor coun-
tries should act promptly to use their
public resources as basis of new
foreign lending.
The only question which one should
like the Britisher to answer is how to
dispose of such loans after they are
underwritten. With governmental
issues already outstanding selling at
purely nominal figures, even the idea
of new series of loans is very remote
indeed A decided change in sentiment
IS required. Perhaps the Basic confer
cn-e will provide it.