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EVENING PUBLIC LEDGER PHILADELPHIA, WEDNESDAY, JULY 23, 1919
17
wswsm
PRENCH WANT LARGE INDEMNITY
FROM GERMANS, BUT FEAR TO LET
THEM EARN IT, SA YS VANDERLIP
and on-half billions
rourup, a large area
Country, Burdened With
Huge Debt, Pictured as
Facing Dwindling Man
power Money Needed
Immediate Necessity Seen
in Providing Income for
Budget That Foots More
Tlmn $23,000,000,000
By TOAN-K A. VANDERLIP
France thrills one with admiration
that there wnj In the world a nation
of such kuperb valor, but one slghst If he
studies the prcucnt position of that gal
lant nation.
France never stopped to count the
prlco In courage and manhood that
she must pay to defend heisrlf from
the Hun. There was never any reckon
ing as to what the future had In store.
And no more did France count the
financial cost. Indeed, I think the
French mind grows bewildered when the
unit of a billion Is reached. They call it
a milliard, and after you have an
nexed nine ciphers to a figure the
French mind no longer follows. It got
to be all the same when the debt of
France piled up to a hundred mtlltnrds
and then two hundred, and when en
gagements were made that will take It
far beyond that figure.
With some capacity for adding two
and two, the first thing that struck mc
In France wbr the disparity between
budget requirements and anything that
taxation has yet yielded. I talked with
ministers, legislators and bankers', but
none of them shared my nnxlety. All
of them. In the month of February, still
felt confident that the national financial
position was to be made right b7 the
When the Hun came France never stopped for
nu lustant to count the cost In human lives or
in francs. There was no reckoning on the
future.
"Indeed," writes Mr. Vnnderllp, "I think
the French mind grows bewildered when the
unit of billions Is reached."
Quite aside from military losses the French sta-
France Is facing a dwindling man power,
tktlcs show eight hundred thousand more deaths
than births during the war period.
Today France owes billions to Oreat Britain
and Fnited States. Her outside Income is woe
fully decreased. She hns $210,000,000 lu In
terest to meet yearly.
There is plenty of latent bolshevUm in
France. But the thousands of small land own
ers of Frnncc are the sheet anchor that Is hold
ing the republic fast to Its Ideals.
payment of Indemnity. They were hazy
on how that Indemnity was to be paid,
in just whnt form the payments were
to be made. But of one thing they were
very certain: It would be n deadly dan
ger to France If Herman Industry were
allowed to recover before French indus
try was on its feet, and France in the
future be flooded with fiermnn goods.
A Dutch banker in talking with mc
one day threw up his hands in despair
over the French mind. "They wnnt to
milk the cow and cut its throat at the
same time," he said.
Dwindling Man Power
France had n visible nspert of having
been bled white. Men far nlong in the
forties could be seen in soldier uniform,
and everywhere there seemed an nctual
shortage of human power. It is sad to
remember that during the war the
population of France, quite nside from
all military losses, showed a decrease of
SOO.000 S00.000 more deaths than
births.
But In trying to get some estimate of
the future of France I wanted, so far
as possible, to get the awful picture of
the battlefront out of my mind, and re
member that south of that terrible scilr
still lies unharmed one of the most
beautiful countries In nil the world. The
devastating hand of war has only
blighted, after all, n comparatively
small area, even though that aren held
an important proportion of the total of
all French Industry.
Facts must be looked In the face, al
though perhaps less than any other na
tion involved in the war has Frnnce
been disposed to look facts In the face.
It must be remembered that her pre
war debt wns about ?1(!0 per capita:
that the balancing of her pre-war budget
was difficult, and that no recent gov
ernment had felt strong enough to carry
out the pressing nnd necessary funding
of her floating debt. Today her bonded
debt is about X20,000.000,000. or nbout
$(i."0 per capita: there nre .Vi,00O.O00.
000 francs of short term unfunded
obligations. The government owes the
Hank of Trance 20,000,000.000.
Tho Immediate Problem
Her immediate necessity is to provide
income for a budget tnat roots over
twenty-three billions. Her Income from
taxation before the war was over three
(1013), and. of
In which Uxes
were gathered then can contribute noth
ing to the national treasury for several
ears. Her new territory will, perhaps,
compensate this loss. The estimated
national wealth of France before the
war was four hundred billion francs.
Tf the present wealth of France were
to be calculated In n depreciated cur
rency It might, without any Increase
over the true value before the war,
reach a figure very much higher than
four hundred billion. Conceivably the
currency might depreciate so that the
measure of the wealth would be so great
In francs thnt with n debt of, say two
hundred and fifty billion francs. It would
be only one-third or one-fourth of the
total national wealth Instead of, as it
now appears tn be, five-eighths or
three-fourths of the total national
wealth. However, it muKt be remem
bered that Inability to collect taxes from
certain districts is equivalent to nn In
crease In the total debt. To comment
on what these figures mean would be
brutal.
French Foreign Loans
Before the war Franre was helped to
meet that trade balance by a huge In
come from foreign securities owned by
her people. These foreign securities in
cluded an Investment of twenty billion
francs In Russian Government bonds;
five billion francs In Russian indus
tries; five billion franrs In Turkish
cbllgntlons nnd a substantial amount
In fireek nnd Balkan securities. Here
was at least a billion nnd a half francs
coming in nnntmlly in the form of in
terest payments nnd it was this income
that balanced her international account.
For a time the government took up from
French Investors the dishonored Rus
sian coupons, but it has announced that
It can do thnt no longer.
Desperate Cause
The depletion of her income from
outside the nation is only half the
story, however. Before the war French
investors held nil the obligations of
their own government. Today France
owes England 434,400,000 and Amer
ica S2.S02.477.000. At the moderate
rate of ii per cent she needs new ex
ports amounting to .5245,000,000 in
value to meet that Interest engagement
alone. AVIth her outside income de
creased by n billion and a half francs,
with a new obligation of $240,000,000
to meet the Interest on her foreign In
debtedness, and with her capacity for
merchandise export cruelly depleted,
the problem of balancing her Interna
tional account Is one that calls for
the wisest financial minds that ever en
gaged themselves with a desperate
cause.
By the time I returned to Paris after
visiting Switzerland, Italy and Spain,
I found considerable change In the at
mosphere. Men In authority wero be
ginning to realize something of the In
exorable logic of the figures and to
wonder what was to be done. With pa
thetic unanimity their mind turned to
ward America's assuming part of
France's debt. It was not usually put
so directly as that, hut one could not
talk to an important Frenchman for
five mlnu'es that he did not bring for
ward a plan, logical in construction,
plausibln in appearance, but always
leading tip to America dividing with the
Allies the war burden.
Taxes Not Increased
Frnnce has not raised taxes as Eng
land and America have. The politicians
fear the antipathy of the Frencfi to
ward Increased taxes. Probably nnj
government that attempts seriously to
raise taxes will fail. The gap Is so great
between present Income and the budget
demands that It would need n truly he
roic finnnce minister who will propose
a tax scheme that will clove that gap.
The great anchor at France, so far
as Its Internal political safety is con
cerned, lies in the fact that there are six
million landowners, and thnt the whole
nation is made up of small Investors. In
some of the industrial centers, such as
Lyons and St. Ktlenne there is plenty
of latent bolshevism. There is, of
i nurse, nn active socialist party, but
France would not seem good soil in
which to propagate the ideals of Bol
shevik communism.
(Tomorrow
"The
Mr. Vanderllp will discuss
Syndicalist Terror."
COTTON GOES LOWER
AFTER GOOD START
Realizing Sales Bring Reaction
in Prices Oats Weaken
Following Strength
LONDON METAL MARKET
Chicago, July 2.'!. Considerable re
alizing occurred in the corn marhet to
day, nnd after the market had displayed
strength In the forenoon prices reacted
materially from the top.
At first there wns general buying by
commission houses on a further jump
In hogs to $23.3.1, n new top mark :
continued dry wer.ther in the belt nnd
fears of rising temperatures. December
made n new high record.
On the upturn commission houses hnd
nrrlcr tn cell finrl InnilpH lin lncfll in-
in 2h terests who later liquidated because of
weakness in onts. me ouiiook ior nry
" YorU, July 23 Cnblf adilcm rwned
I th New Vnrk Metal Exchanar thin mnrn
Itik quoted prices In I.nndon a.a fnlloua: Tin
Spot I2SS (!, a loss of 13a futures 254
in off 1 ,V nnd strait, JSflft 10a. a drop
cm i.f. aiee ..pm, inn innd lutureit
inn Mindnrd copper spot, 10:
drop of (2: future. 104 flu a Inn of ft
spot ill o. up u. tutu il'stw "Tr I weather stimulated support on the set
2 Lcvt-spot. 23 in. unchanited fu- back. Some authorities insisted thnt
nrVoV.Mu?.V f'ftr-TS. '" ""' th crop could go another ten days
without rain unless the weather get! tot'
hot. g.
Oats weakened after a stronger start.
The initial upturn was due tn continued
dry weather, but hedging pressure wa
quite prolonged and realizing salei
were heavy. Offerings from the counj
try to arrive were liberal, and thera
were reports that the government w
offering 1,500,000 bushels of oats for
Fale In and around New Tork. Theta
oats were bought originally nt consldl
ernbly less than present prices, Scai
board operators also tried to resell, 3
It was reported that elevators wer
accumulating oats against a prospective
falling oil in receipts, when the move
ment In wheat picks up, as cars arf
scarce in many districts. The eastern
demand Is poor and export conditions
are none too promising,
leading- futures ranged aa follow:
Corn (new delivery) Tt
Open Hlah Low Cioae cloac
Sept .. 1 9SW 1.MJ4 1.B4H l.H 1.94
Dec. 1 MK 1 tV? 1 (11H 1 SAW 1 fiSfl
Oata
T 5Jr 5?f T.!' SO St
Dee. . r.i- M
1'orK
Sept.
Pt. ..I
I.ard
Sept . ...14 90
Oct. . . S4 S5
niba
July . .5S.75
Sept ...2S.n2
Ulrt.
.11 PS R2 10
35 00
34 ST
20.00
2S SI
82
M 91
84.80
S4 Aft
28 75
28.R2
82 83
52.00 81 7
34 SO
34. B7
29 97
29.52
S4.4T n
84. BO 4
28.0 1
28.37 J
NEW ISSUE
We are advised by counsel that this stock is exempt from
the Pennsylvania Personal Property Tax.
$2,000,000
Congoleum Company, Inc.
Seven Per Cent. Cumulative First Preferred Stock
(Shares of $100 par value)
Preferred both as to assets and dividends.
Redeemable at 107 and accrued dividends.
Dividends Exempt from the Normal Federal Income Tax
The foUotving information is summarized from a letter by Mr. Frank B. Foster,
President of the Company:
CAPITALIZATION
Authorized
and Outstanding
First Mortgage 7 Serial Gold Notes $1,000,000
7 Cumulative First Preferred Stock 2,000,000
8 Second Preferred Stock 1,000,000
Common Stock (no par value) 30,000 shares
Business The company manufactures printed floor-coverings protected by patents in the
United States and principal manufacturing countries of the world. Its production today is
probably larger than that of any other manufacturer of printed floor covering in the United
States.
Property Congoleum Company, Inc., has succeeded to all the property and assets of the
Congoleum Company heretofore owned and operated by The Barrett Company. The
Barrett Company retains a very substantial interest in this business. The manufacturing
plant near Philadelphia, Pennsylvania, consists of twenty-eight brick and steel buildings of
substantial construction, supplied with the most modern equipment Property includes twenty-six
acres of land and affords ample opportunity for further enlargement.
Asset- Net assets are equal to $212 for each share of First Preferred Stock, and even
with Patents, Trade Marks and Good-will which are considered very valuable, entirely elim
inated, there are net tangible assets' equal to $162 per share.
Earnings Average annual net profits for three years, after making provision for interest
on outstanding notes, are equal to more than twice the annual dividend requirement on the
First Preferred Stock, and for the year 1918 more than four rimes this amount. v
Sinking Fund Company w;ll set aside each year, beginning December 1, 1921, $50,000
out of surplus profits after First Preferred Stock dividends for redemption of this stock
Larger sums may be set aside as conditions warrant. Other safeguards for the protection of
this stock have been provided for.
General A wide market for the product of the Company has been developed and a con
tinued large business is anticipated. The management is in the hands of experienced and
progressive men, most of whom have been responsible for the development of the business-
$30,000,000
Government of Switzerland
tyi Gold Bonds
To be dated August 1, 1919
To mature August 1, 1929
JThlJ datalla rtUttitr to the ercanlritlon of tha Company and ImuiM of thla atonic hT bean ippror4 by
X. a. Cbaadla. Casnaal. Tha Company property haa bo en apprataod by Moaar. W. B. Ittehaxda A Co.. accountant
n nKlaaara.'cnd tha aecauata bava batn audited by Meaara. Arthur Tonnr & Co.. certified publlo aioountaota.
Price $95 per share and accrued dividend
Descriptive circular on request
A Be Leach & Co9 Inc.
Investment Securities
115 South Fourth Street, Philadelphia, Pa.
Interest payable February 1 and August 1.
Principal and Interest payable in United States gold coin, in New York City
at office of Lee, Higginson & Co., Fiscal Agents.
Coupon bonds in denomination of $1,000 and $500, registrable as to principal only.
These bonds are the direct obligation of the Swiss Confederation (Gov
ernment of Switzerland ) .
The general debt of Switzerland, including this issue, is approximately
$370,264,370. The population (1919 estimate) is 4,300,000, or a
per capita general debt of about $86.
In addition, the government has incurred or assumed a total debt of
about $357,037,820 to acquire 1758 miles of railroad, more than
one-half of the total mileage in Switzerland. In normal years the
railroads have shown a substantial profit considerably in excess of
the annual requirements for interest and sinking funds.
Switzerland is considered one of the wealthiest countries in Europe.
National wealth comprising both private and public properties was
officially estimated in 1913 at $4,400,000,000 or $1135 per capita
(1913 population). If allowance should be made for recapitalization
of wealth in accordance with present level of prices, this figure
should probably be over $6,000,000,000, showing a per capita wealth
of about $1400. Swiss capital invested abroad was estimated in 1913
at $1,250,000,000.
Switzerland, in addition to providing by taxation for 30 of her mobili
zation expenses, has decided by a direct referendum vote to extinguish
eventually through an income and capital tax the debt incurred to
maintain her neutrality, for which the greater part of the present
entire debt has been incurred.
The thriftiness of the Swiss people and their faithful adherence to their
obligations justify the high credit which the Confederation enjoys.
From 1890, the date of the earliest present outstanding loan until the
outbreak of the late war, Switzerland's external loans bore rates of
interest from 3 to 4 and sold on the London and Paris Stock
Exchanges at average prices to yield from 2.98 to 4.42. During
the ten-year period, 1904 to 1913, two issues listed in Paris sold at
average prices to yield 3.55. The average yield of seven represen
tative Swiss Government bonds quoted on the Paris Bourse as of June
30, 1919, was 5.32. The single issue quoted in London as of the
same date yielded 5.37.
Industry and agriculture in Switzerland have enjoyed a period of great
prosperity and have undergone considerable development during
recent years. Its important water power resources, estimated at
2,700,000 available horsepower, should result in continued growth
and expansion of the country's industries in the future.
The purpose of this loan is to provide funds to be applied to purchases of
commodities and payment of other obligations due by the Swiss
Government in the United States.
We offer the above bonds for subscription, subject to allotment and
opinion of counsel,
at 964, to yield over 6.
Subscriptions will be received at the offices of the undersigned. The right
is reserved to decline any subscription and to make allotments for smaller
amounts than applied for. The right is reserved to close these books at the dis
cretion of the undersigned. The amounts due on allotments will be payable in
New York, Boston or Chicago funds on August 1, 1919, against delivery of Lee,
Higginson -& Company's interim certificates, exchangeable for definitive bonds
when received.
Lee, Hisqinson & Go.
BOSTON NEW YORK CHICAGO
Guaranty Trust Company The National City Company
OF NEW YORK
Th atatamenta contained haraln. whll not rvarmtaed, ra based upon
lclomutton s3 advlc which -a btllev to b accural and ralUbU.
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